The Virginia government has entered a U.S. Supreme Court case on behalf of a West Virginia electric company's bid for higher rates.
The utility, Appalachian Power Co., also serves 330,000 customers in Virginia and periodically seeks rate increases in Richmond. Virginia State Corporation counsel Richard D. Rogers, who filed the "friend of the court" brief Feb. 2, insisted that the state's involvement in the West Virginia dispute would "in no way" prejudice the State Corporation Commission in Appalachian's favor the next time the utility wants a Virginia rate increase.
The high court could rule as early as Monday on the case, in which Appalachian wants a review of a lower court decision that denied the utility a $41 million rate increase in West Virginia.
Virginia entered the case out of concern that Virginia rate payers might suffer if Appalachian can't meet the demand for its power, Rogers said. "A lot of people came into our hearings in the last Appalachian (rate increase request) case and said Virginia rate players were subsidizing the West Virginia side," he added.
In his Supreme Court filing, Rogers noted that Appalachian said it needed the West Virginia increase in order to provide adequate service from its West Virginia power plants to both Virginia and West Virginia customers. "In this case, the interests of the citizens of the commonwealth (of Virginia) coincide with the interests of Appalachian," the brief said.
Rogers said Virginia only joined in asking the Supreme Court to review the decision and did not comment in its brief on the merits of Appalachian's rate increase request. He admitted, however, that "obviously, we think there might be a potential" that the West Virginia Public Utilities Commission (PUC) erred in denying the rate increase.
Appalachian argued in its petition to the high court that the West Virginia PUC violated interstate commerce laws when it ruled last may that the company was entitled to less than 49 per cent of its requested increase and in addition ought to refund $45 million in overcharges to its customers.
The money, Appalachian said, was needed to finance $1.2 billion in construction program between 1976 and 1980, without which its customers in Virginia and West Virginia "will face the strong likelihood of frequent and prolonged interruptions of electric utility service."
In opening the request for Supreme Court action, the West Virginia PUC argued that Appalachian "manipulated its financial data" to look worse than it actually is. The utility's credit rating is bad, the PUC said, because its management has run up too much long term debt and continues to worry potential investors by collecting revenues the PUC has already said it ought to refund.
"The company must live with the fruit that its (management) decisions bear," the PUC argued.
Appalachian already has filed another request for a further $85 million rate increase in West Virginia and hearings are underway. It requested a $43 million Virginia increase last year and was awarded $25.6 million in October, Rogers said. The increase went into effect in November for residents of the southern and southwestern parts of Virginia, and no further increase is pending at the moment.
"We went through a complete investigation here last year and the commission gave the company what it believed the company deserved," Rogers said.
Appalachian contended that without new construction its generating capacity will be only 1 percent above projected peak winter demand by next year. In the winter of 1980-81, the company told the Supreme Court, its capacity would be 15 percent short of expected demand.