In 1978, the Virginia Municipal League (VML) and the Virginia Association of Counties (VACo) created a Steering Committee to represent the interests of the localities in the Appalachian Power Company (APCo) service area in connection with the purchase of electric power from APCo. Since that time, the Steering Committee has worked to advance the best interests of localities and other public authority customers, negotiating contractual terms with APCo on behalf of its members and participating in rate-making proceedings involving APCo before the Virginia State Corporation Commission, all for the purpose of ensuring that APCo charges the localities rates that are just and reasonable.
The Steering Committee utilizes a shared cost and leadership structure. This enables the committee to maximize financial benefit to localities and other public authority customers in APCo’s service area by (a) providing experienced counsel and experts in the complex field of utility accounting who are able to challenge APCo’s contractual and other rate-making proposals, assumptions, and calculations where appropriate and work diligently to keep rates and tariffs paid by localities as low as possible, and (b) spreading the cost of these services among all localities in the service area. Without this structure, each locality would have to retain its own independent legal counsel and experts for these services at a much higher cost.
FINANCIAL BENEFITS TO LOCALITIES:
There are substantial financial benefits to public authority members arising from the Steering Committee’s representation in recent years. In addition to the highlights provided below, a detailed description of work performed by the Steering Committee and its legal counsel on behalf of public authorities in the APCo service area is documented here >.
CURRENT STEERING COMMITTEE ACTIVITIES ON BEHALF OF LOCALITIES:
Favorable Electricity Rates
After more than a year of negotiation, the committee finalized contract terms with APCo for public authority customers for the term Jan 1, 2021 (retroactive) – Dec 31, 2024. The committee and its legal counsel challenged numerous elements of APCo’s rate case before the State Corporation Commission which resulted in a number of beneficial rate structures in the contract for public authority customers including:
- A surcredit to all PA Customers that will reduce rates by $1.34 million, prorated to each PA customer based on usage. This surcredit will be applied to PA customers’ bills starting April 1, 2021 – Dec 31, 2021.
- A one-time $562,000 tax credit that APCo will remit to the PA Customers, also on a pro-rata basis, resulting from APCo’s reduction in federal income tax rates between Jan 2018 – March 2019.
- Successful intervention in opposition to APCo’s proposed request for a rate increase for all customer classes (including PAs). Because of the intervention mounted by the VML/VACo APCO Steering Committee and other ratepayer advocacy organizations, the SCC denied APCo’s request for a rate increase.
Legal/Technical Expertise and Experience
The Steering Committee retains expert legal and technical assistance to assist in negotiating rates/contracts with APCo and to support legal interventions in APCo’s efforts before the State Corporation Commission to increase rates or to recoup unreasonable expenditures from customers. For 35 years, the Steering Committee has negotiated fair and reasonable rates for the Public Authorities and has secured electric service agreements local governments can enter into with confidence.
In the last two years alone, the Steering Committee’s legal team has effectively represented the Public Authorities in ten cases before the State Corporation Commission to oppose unreasonable rate increases sought by APCo and APCo’s plans to add expensive, yet unnecessary, generating capacity.
Significant Value through Shared Legal Costs
The Steering Committee acts on behalf of all political subdivisions in the APCo service area, navigating the complex legal and regulatory structures and negotiating favorable rates, terms and conditions of their electrical service. Public Authority entities are invited to share the costs incurred by the Steering Committee on a pro rata basis. Without this joint effort, each entity would be required to negotiate with APCo on its own, retaining counsel and consultants independently at considerably higher cost.
Credibility with the SCC
Over the past 6 years, counsel for the Steering Committee has continued to build on their excellent reputations with the SCC. On multiple occasions, the Commissioners have complemented counsel on their performance in SCC proceedings and commented on the importance of the localities’ having legal counsel in rate cases and related proceedings before the SCC.
It is important for each locality and public authority to designate a contact person for matters pertaining to the Steering Committee. Please contact Sue Mellen at firstname.lastname@example.org to update your designated contact person
For more information about the VML/VACO Steering Committee, please contact:
Steering Committee Vice Chair
Town of Blacksburg
Virginia Municipal League, Chief of Staff
Dean A. Lynch
Virginia Association of Counties, Executive Director