CHARLESTON, W.Va. – Appalachian Power and Wheeling Power, both subsidiaries of American Electric Power (AEP), Monday filed a request with the Public Service Commission of West Virginia for a $226 million revenue increase. If approved, the request would raise rates in West Virginia by approximately 17 percent. The exact amount of the increase will vary by customer class and usage.

“This is a base rate case the Commission required us to file in which we present our costs of doing business,” said Charles Patton, Appalachian Power president and COO. “It includes things like storm restoration costs from the Derecho and Sandy, implementation of a right-of-way maintenance program to improve reliability, and a return that is sufficient to attract capital. Ultimately, the Commission will determine the outcome of the request.”

The increase in revenue is needed to recover increased costs of maintaining and improving distribution and transmission lines as well as generating plants. These day-to-day costs of an electric utility are recovered in “base rates.” These costs have been rising for the last several years. This increase affects customer rates in West Virginia, where rates have not increased since 2011. During that same period rates for Appalachian’s customers in Virginia and Tennessee have increased.

“Keeping the lights on is our customers’ number one requirement,” said Patton. “It’s up to us to balance that requirement with the need to keep prices as low as possible. To ensure that service remains reliable, we need to make investments to maintain our infrastructure.”

The requested increase includes costs for major storm restoration efforts and a new vegetation management program. The company is seeking recovery of restoration costs from the two major storms that struck West Virginia in 2012, the Derecho on June 29 and Superstorm Sandy on Oct. 29. The company proposes to spread those costs over a five-year period to reduce the effect on rates.

The filing also includes costs for the recently approved cycle-trimming vegetation management program. While cycle trimming won’t eliminate outages from major events like the Derecho and Sandy, it will help improve reliability, reduce power restoration times and minimize some restoration and ongoing maintenance costs.

Rates will not be put into effect until approved by the Commission, which can suspend rates for 270 days after July 30, 2014. Upon approval, typical residential customers will see an increase in their electric bills of less than a dollar a day. Residential customers who use 1,000 kilowatt-hours a month will see their monthly bill rise from $94 to $116.

                                                                                        Residential Customer Usage and Costs

In the last year, Appalachian Power has begun implementation of an efficiency program called Lean throughout its service territory. The internationally known program, used by Toyota and other multinational corporations, is designed to engage front line employees in finding ways to eliminate waste and add value to customers. Plus, the company has implemented two major budget-cutting initiatives and reduced its workforce by more than 10 percent in the last five years.

The filing requests a 10.62 percent authorized return on equity. Earning a fair return on equity is critical to Appalachian’s ability to do business. It directly affects bond ratings and therefore the cost to finance infrastructure improvements, make long-term investments and provide reliable electricity.

“The rates the Commission approves for our company are established to allow us to provide safe, clean, reliable electric service while keeping prices as affordable as possible and earning a fair return on investment,” Patton said.

AEP employs approximately 2,500 people in West Virginia, making it one of the largest employers in the state. It is also one of the largest taxpayers in the state, paying $122 million in state and local taxes in 2012.

Customers are urged to manage their energy use wisely and to visit www.AppalachianPower.com for energy-saving tips and a free home energy calculator that can help explain how to conserve electricity. The site also provides information on payment options available to customers.

Appalachian Power provides electricity to 1 million customers in Virginia, West Virginia and Tennessee (as AEP Appalachian Power) and Wheeling Power provides electricity to customers primarily in Marshall and Ohio counties in West Virginia. Both companies are units of American Electric Power, one of the largest electric utilities in the United States, with more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.

This report made by American Electric Power and its Registrant Subsidiaries contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its Registrant Subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: the economic climate, growth or contraction within and changes in market demand and demographic patterns in AEP’s service territory; inflationary or deflationary interest rate trends; volatility in the financial markets, particularly developments affecting the availability of capital on reasonable terms and developments impairing AEP’s ability to finance new capital projects and refinance existing debt at attractive rates; the availability and cost of funds to finance working capital and capital needs, particularly during periods when the time lag between incurring costs and recovery is long and the costs are material; electric load, customer growth and the impact of retail competition, particularly in Ohio; weather conditions, including storms and drought conditions, and AEP’s ability to recover significant storm restoration costs through applicable rate mechanisms; available sources and costs of, and transportation for, fuels and the creditworthiness and performance of fuel suppliers and transporters; availability of necessary generating capacity and the performance of AEP’s generating plants; AEP’s ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; AEP’s ability to build or acquire generating capacity and transmission lines and facilities (including the ability to obtain any necessary regulatory approvals and permits) when needed at acceptable prices and terms and to recover those costs (including the costs of projects that are cancelled) through applicable rate cases or competitive rates; new legislation, litigation and government regulation, including oversight of nuclear generation, energy commodity trading and new or heightened requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances, or additional regulation of fly ash and similar combustion products that could impact the continued operation, cost recovery and/or profitability of AEP’s generation plants and related assets; evolving public perception of the risks associated with fuels used before, during and after the generation of electricity, including nuclear fuel; a reduction in the federal statutory tax rate that could result in an accelerated return of deferred federal income taxes to customers; timing and resolution of pending and future rate cases, negotiations and other regulatory decisions, including rate or other recovery of new investments in generation, distribution and transmission service and environmental compliance; resolution of litigation; AEP’s ability to constrain operation and maintenance costs; AEP’s ability to develop and execute a strategy based on a view regarding prices of electricity, and other energy-related commodities; prices and demand for power that AEP generates and sells at wholesale; changes in technology, particularly with respect to new, developing or alternative sources of generation; AEP’s ability to recover through rates or market prices any remaining unrecovered investment in generating units that may be retired before the end of their previously projected useful lives; volatility and changes in markets for capacity and electricity, coal, and other energy-related commodities, particularly changes in the price of natural gas; changes in utility regulation and the allocation of costs within regional transmission organizations, including PJM and SPP; the transition to market generation in Ohio, including the implementation of ESPs; AEP’s ability to successfully and profitably manage our Ohio generation assets in a startup, nonregulated merchant business; changes in the creditworthiness of the counterparties with whom AEP has contractual arrangements, including participants in the energy trading market; actions of rating agencies, including changes in the ratings of AEP debt; the impact of volatility in the capital markets on the value of the investments held by AEP’s pension, other postretirement benefit plans, captive insurance entity and nuclear decommissioning trust and the impact on future funding requirements; accounting pronouncements periodically issued by accounting standard-setting bodies; and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes, cyber security threats and other catastrophic events.