CHARLESTON — Officials with two subsidiaries of Columbus-based American Electric Power answered questions under oath Tuesday as the three-member West Virginia Public Service Commission considers the company’s latest electric rate increase.

The PSC held an evidentiary hearing beginning Tuesday morning at its headquarters in downtown Charleston for the $250.5 million rate increase requested last November by Appalachian Power and Wheeling Power, subsidiaries of American Electric Power (AEP).

The companies are seeking to raise annual electric rates by approximately $250.5 million, impacting over 460,000 customers across their service area. The PSC had suspended the proposed rates until Aug. 28 to allow for a thorough examination of the request.

The purpose of Tuesday’s hearing was to gather evidence from all involved parties regarding the justification for this increase, which would translate to a 13.54 percent rise for the average residential customer.

During his testimony, Appalachian Power President and CEO Aaron Walker said that the two companies have not had a base electric rate increase since 2018, though an analysis presented by the PSC’s Consumer Advocate Division (CAD) suggested that residential customers’ rates have increased by approximately 72 percent since that last base rate case not counting the rate increase request under review.

“Would you agree that the company has had substantial rate increases between now and its last base rate case before you had the $250 million increase that you’ve asked for in this case,” asked CAD Director Robert Williams.

“I don’t think I’d say substantial. I don’t know what you mean by substantial,” Walker said.

For industrial customers on LCP/IP industrial tariff rates, the average rate could potentially reach $9.97 per kilowatt hour if all currently pending rate increases are approved. This would represent a 64.63 percent change in rates since March 2019 and would rank Appalachian Power/Wheeling Power’s industrial rates 39th among all U.S. states based on data from the U.S. Energy Information Agency.

“Can you see, Mr. Walker, how for industrial customers on LCP and IP, the constant drumbeat of rate increases after rate increase after rate increase, has become very difficult for them to absorb over the last five or six years,” asked Barry Naum, an attorney for the West Virginia Energy Users Group – representing major commercial and industrial electric customers.

“I’d say, in speaking with our customers, constant adjustments to rates can be a challenge, which is why we proposed the mechanisms that we proposed in this base case,” Walker said.

In March, Appalachian Power and Wheeling Power filed an application with the PSC to securitize certain assets in order to reduce the effect of the rate increase request on residential customers from a $23.74 monthly increase to a $6.72 increase. The West Virginia Legislature passed a bill in 2023 allowing for securitization, with Virginia passing a similar bill in March.

Securitization allows for the conversion of certain utility costs – such as generating assets, storm costs, fuels, capital expenditures, etc. – into bonds, which typically have lower interest rates, theoretically benefiting customer affordability. Walker said this was a win for customer affordability, but he would not provide specific details on how much shareholders would benefit.

“There’s a return associated with it; less than what they currently have. So, I wouldn’t say it’s a shareholder win,” Walker said.

Naum asked Walker a series of questions about the companies’ 2025 first quarter earning report.

“Moving to the next column, it indicates $54 billion of forecasted capital for the years 2025 to 2029,” Baum said. “Underneath that, it says no incremental equity is needed to fund this plan…So, AEP has sufficient capital already on hand to fund $54 billion of forecasted expenditures through 2029?”

“Yeah,” Walker said. “This doesn’t speak to the debt that we’ll incur to get it. It just says right now, we don’t believe we need to issue further stock.”

Naum pointed to reports showing a 12.3 percent increase in commercial-sector electric load over the first quarter of last year for AEP, and between 8 percent to 9 percent of annual retail load growth estimated for 2025 through 2027.

“Would you agree that for AEP as a total company, load growth is currently driving the success of AEP’s earnings and revenues,” Naum asked.

“That’s a tricky one…Yes. It’s a component of performance,” Walker said.

The PSC also heard from ratepayers Tuesday afternoon in a public hearing for the rate increase request. To date, the PSC has received 4,241 letters of protest opposing the rate increase request.