PSC Cuts Cost to Ratepayers by 2/3, Key Rates Policies Decided, Still Awaiting Final Rates Impact Details
CHARLESTON, West Virginia – The West Virginia Public Service Commission (PSC) has ruled on a proposed large rate increase case that implicates customer bills and policies that affect how customer-owned solar power would work. By an order entered late on Thursday, August 28, 2025, the PSC decided how some utility programs will work for customers and made decisions on what AEP’s West Virginia utilities will be allowed to charge to ratepayers. West Virginia Citizen Action Group (WV CAG), Solar United Neighbors (SUN) and Energy Efficient West Virginia (EEWV; collectively WV CAG/SUN/EEWV, or CSE) intervened in the case.
The overall rate impact was slashed by the PSC from $250 million to about $76 million. The actual rates impact will be delayed and the exact increase will not occur until later. In addition, there are several significant reductions in costs that will be passed along to ratepayers. What was ruled on in today’s order will have significant impacts to ratepayers who wish to take control of their energy bills. WV CAG/SUN/EEWV advocated for, and won, nearly all of its positions.
“Thousands of West Virginians spoke out against unaffordable rate hikes and difficulty managing the ever-growing cost of energy, and the PSC’s decision reflects the power of public input to ease the burden on families. Expanding the Dollar Energy Fund will provide significant relief for the West Virginians who need it most.” said Dani Parent, Executive Director, West Virginia Citizen Action Group.
"Although we are losing the 1:1 retail credit, The PSC's decision on the new bill credit rate preserves the right of West Virginians' to participate fairly in our energy system. Under this order, solar owners and those who wish to take control of where their energy comes from will continue to benefit from distributed solar power into the future— a win for West Virginia's solar industry and residents alike," said Leah Turgeon, WV State Director, Solar United Neighbors.
“Local governments will finally be able to save money when they have more efficient LED streetlights,” said Emmett Pepper, Policy Director of Energy Efficient West Virginia. “It never made sense that it cost municipalities more money in order to save energy for the utility, so kudos to the PSC for fixing that issue.”
“It goes to show you how engaged people are around these issues. More than 5,000 West Virginians took the time to speak out because they know what’s at stake. We think that's more than any other case in PSC history. Residents and businesses are tired of seeing their bills go up and paying for unreliable service. Keeping the lights on shouldn’t be a universal struggle,” said Courtney MacDonald, of the West Virginians for Energy Freedom coalition. “Thank you to the Commission for protecting low-income ratepayers through the Dollar Energy Fund and safeguarding net metering.”
Key provisions included in the order:
Protections for low-income ratepayers:
Expanded the Dollar Energy Fund (DEF), a utility-funded program that helps people avoid shut-offs. The Commission went even further than what CAG/SUN/EEWV asked for. AEP formerly provided $250,000 of funds each year. CAG/SUN/EEWV asked for $600,000, and the PSC required $1,000,000.
The Commission also increased the limit for how much a customer can receive each year from $300 to $500 and allowed the fund to be utilized year-round instead of just during winter months.
Slashed the reconnection charges in half and requires AEP to justify any reconnection charge in the next case. Currently residential customers have to pay between $17.50 to $75 to reconnect service that has been shut off. Now that nearly all meters have been updated, they can be disconnected remotely, so there is no need for the high charges.
AEP is required to look into the impact on having discounted rates for low-income customers in the summer months, in addition to winter months that are currently allowed. The PSC is going beyond the statutory requirement of the discounted rates in the winter and looking into having them in the summer, as well.
Solar Net-Metering:
While 1:1 credits for net metering are ending, the window to stay “grandfathered” in is open more than a year later than what AEP wanted, so long as the application is received by then and the system is installed within a certain amount of time.
For systems installed after the grandfathering period ends, the credit will be around 12.4 cents per kwh, which is about 2/3 to 3/4 of the full retail rate.
Energy efficiency/load management
Rates charged to local governments and others for energy-efficient LED streetlights were reduced so that they will be lower than comparable traditional streetlights. This will finally allow municipalities to save money when they save energy.
Residential customers who wish to have lower rates during off-peak will soon reasonably be able to reduce usage. The PSC reduced the window of “peak” to a four-hour window (or less). Currently, it is 7am to 9pm, Monday through Friday, which is unmanageable for most customers to utilize.
Background:
The main case decided late Thursday night, AEP’s latest base rate increase was originally filed in August of 2024 but had to be re-filed on November 1, 2024, due to inadequate information that was originally provided as to the basis for the requested increases. AEP’s WV subsidiaries requested an increase of $250 million that would have increased an average residential household bill by about $24 per month. Later, in April of 2025, AEP filed an annual fuel case (also called “ENEC”) relating to the variable costs related to generation. In that case, a rate increase of $71.6 million would be an additional $5 per month for residential customers. The final order in the ENEC case has not yet been entered.
There were two additional parallel cases, as well. One relates to how ratepayers pay for the utilities’ power plants over time (depreciation), which was entered at the same time as the base rate case order. The final pending case (securitization) would spread out the costs for some or all of the above cases over 20 years. The securitization case order being entered soon will reduce the overall rate impact of these cases, as well as spreading out the costs over time.
In the base rate case filing, AEP also aimed to slash net metering rates by two-thirds, which would make solar less cost-effective and would be a blow to the blooming solar industry in West Virginia. Aspiring solar owners were outraged with AEP’s request, which would ultimately close the door on their ability to affordably invest in rooftop solar for their businesses and homes. Other aspects of this very large case are: ending a program to help low-income ratepayers who are facing shutoffs, some structural changes to how energy efficient streetlights cost local governments, and rate structures that make it harder for ratepayers to reduce costs.
The significant rate increases, which is a trend that has caused rates to more than double in the past 15 years for AEP customers in West Virginia, highlights the importance of residents having the opportunity to take control of their energy bills by doing things like generating their own energy or becoming more energy efficient. The order entered in the base rate case does enhance ratepayers’ abilities to do those things.
In June, minutes before a public hearing on the base rate case proposal, West Virginians protested AEP’s proposed rate hike and net metering threat outside the Public Service Commission. In the public hearing, residents pleaded with the Public Service Commission to deny AEP’s request, sharing their struggles to pay snowballing electricity bills. The PSC received over 5,000 letters from West Virginians protesting the proposed rate increase and slash to net metering, which is believed to be the highest number of comments ever submitted in any case before the PSC.