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West Virginia Utility Proposes Rate Hike to Fund Internet Expansion

Appalachian Power filed a request with the West Virginia Public Service Commission to increase its broadband surcharge rates by $3.6 million in order to fund the expansion of broadband service to 13,000 unserved customers.

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(TNS) — Appalachian Power has proposed a rate hike to pay for expanding broadband infrastructure in Logan and Mingo counties.

The company filed a request Wednesday with the West Virginia Public Service Commission to increase its broadband surcharge rates by $3.6 million, effective March 1.

If approved, the move would bring a 48-cent monthly surcharge increase for any residential customer using 1,000 kilowatt-hours. The rate hike would apply to all Appalachian Power customers.

Appalachian Power says the project will expand broadband access to 13,000 unserved customers in Logan and Mingo counties. The company says the project is on track to be finished by December 2023.

The Public Service Commission approved the project at an estimated capital cost of $61.3 million and a first-year operations and maintenance cost of $1.2 million in June 2021, as Appalachian Power requested.

The commission's approval gave Appalachian Power the green light to invest $61.3 million in construction and installation of 361 miles of fiber. The company had entered into a lease with GigaBeam Networks LLC under which GigaBeam would lease some fiber strands.

GigaBeam Networks, a Bluefield, Virginia-based Internet service provider, will own, install and operate the last-mile infrastructure necessary to extend broadband services to customers in the project area.

"Installing fiber-optic cable gives us a robust communications platform for grid enhancements that improve service reliability, and also provides an opportunity to lease the excess middle-mile fiber to an Internet service provider for broadband," Appalachian Power president and chief operating officer Chris Beam said in a statement.

Appalachian Power proposed the project to the Public Service Commission in January 2021 after the West Virginia Legislature in 2020 passed House Bill 4619 establishing a broadband infrastructure expansion program.

Construction of the 361 miles of fiber optic cable began in July, with design, engineering and pole replacements finished earlier this year, according to Appalachian Power.

In its filing with the Public Service Commission this week, Appalachian Power reported that, while fewer poles needed to be replaced than expected, the company expects increases in costs for materials.

Appalachian Power, which provides electric service to 25 counties in West Virginia, has other rate increases pending before state utility regulators.

In April, Appalachian Power and fellow American Electric Power subsidiary Wheeling Power requested a $297 million increase in the rate that they charge for buying power or fuel to generate electricity, known as an Expanded Net Energy Cost rate. The proposal called for a nearly 12% increase in the monthly bill for a residential customer using 1,000 kilowatt-hours.

Appalachian Power also has proposed a combined net monthly increases of $0.02 and $0.49 in two separate surcharges for construction of solar and wind facilities in Virginia.

The average monthly residential bill for AEP's West Virginia customers escalated from $55.28 in 2006 to $155.66 in 2022 — a 182% increase.

©2022 The Charleston Gazette, Distributed by Tribune Content Agency, LLC.