Osborne sets forth the facts and figures for Putnam Rotarians.

December 29, 2009

"The cost of electricity production is rising," says Debra Osborne, "but so is everything else."

The Nitro native who manages AEP's Simulator Learning Center in St. Albans set out the realities of energy generation for Putnam Rotarians during their luncheon meeting today at Scarlet Oaks.

"Appalachian Power is a 'regulated utility'," said Osborne. "That means we are guaranteed a rate of return through the Public Service Commission.

"In return for that, we have an obligation to serve," she said.

"Appalachian Power has an obligation to serve rural and isolated areas just as we do in areas" for which cost of service is less.

The rate increase request currently before the PSE represents an increase of $442 million, phased in through three stages. This does not include any profits, according to Osborne. The increase goes primarily fuel and purchased power expenses.

Approximately $5 billion has been allocated for environmental compliance construction projects; $2 billion of that goes for flue gas desulfurization (FGD) scrubbers at the John Amos Plant in Winfield, "right here in our own back yard."

The average cost of electricity in the Appalachian Power service region is 7.2¢ per kilowatt-hour, compared to a national average of 11.3¢/kWh. A first-stage of the rate increase, already approved by the PSC, would increase the cost in southern West Virginia to 8.3¢/kWh. For a home using 1,000 kilowatt-hours (admittedly low for many homes), this represents an increase from $72.28 per month to $83.85.

Despite the cost, the demand for electricity continues to rise. People are building bigger homes, said Osborne. "How many of you have air conditioning?" she asked. All hands were raised. "Then, how many of you had air conditioning when you were growing up?" This time, no hands went up.

"When people buy an energy-efficient refrigerator," she said, "they put the old refrigerator in the garage or in the basement. That doesn't make for savings."

Osborne noted the increase in "vampire" power usage. Every appliance now has a clock built in; computers continue to draw current even while they are "hibernating." Telephones, battery chargers, all add to the power load.

Nearly all of the electricity produced by Appalachian Power is generated with coal. A little over one percent comes from water power; a little under one percent is generated by natural gas or through other means. Ninety-eight percent of the generation by Appalachian Power is with coal.

Osborne spoke at length about conservation of power, and discussed a video which is available online to the general public. "With detergents now available, clothes can be washed in cold water; washing in cold water can save $40 a year," she said.

Better insulation, use of power bars (to turn off peripherals with a single switch), replacement of incandescent lights with the new fluorescent bulbs, all add up to savings. Install programmable thermostats. Use ceiling fans in winter and in summer.

Insulate the water heater: "Water at 120 degrees will do the job just as well as water at 150 degrees."