Virginia regulators decide Allegheny Power does not need to absorb fuel, purchased-power costs

摘要

Allegheny Power won a victory last week when Virginia regulators ruled that the utility's obligations to absorb higher fuel and purchased power costs will end December 31. The Virginia State Corporation Commission disagreed with others, including its own staff, and decided the utility's obligations end when rate caps come off and Virginia utilities no longer have an obligation to service default customers. The decision paves the way for the SCC to decide whether Allegheny should be permitted to recover its fuel and purchased power costs from July 1 through June 30, 2009, said Andy Farmer, a SCC spokesman. Under a memorandum of understanding the utility signed in 2000, Allegheny divested its generating units to its subsidiary Allegheny Energy Supply and agreed to absorb the risk of future fuel price fluctuations. Allegheny now has asked for full purchased power cost recovery of $132.9 million for the year. In last week's order, the SCC gave Allegheny two weeks to file its plan for meeting future load obligations. The plan must include schedules for building new power plants and possibly returning generation now owned by Allegheny Energy Supply to Allegheny's Virginia rate base. The utility also must file all agreements related to the transfer of its generating units to the affiliate and all power purchase agreements between Allegheny Power and its affiliates.