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Businesses reel from a power-bill surge (VA)
The Roanoke Times ^ | July 27, 2009 | Duncan Adams

Posted on 07/30/2009 5:20:14 AM PDT by Perseverando

Residential customers aren't the only ones stung by a string of electricity rate increases.

A year ago the steel mill faced a problem businesses love -- its Roanoke plant scrambled to match production with red-hot demand.

"We were going great guns right through September of last year," said Joe Crawford, vice president and general manager of Steel Dynamics Roanoke Bar Division, formerly known as Roanoke Electric Steel. "And then October hit."

The minimill melts scrap metal in electric-arc furnaces and thus depends heavily on electricity. For months now, it has operated at about 50 percent capacity and tried to cut costs by ramping up production during nonpeak hours. But its electric bills have still averaged about $1 million a month, the same amount paid last year during full-bore production.

Crawford ties that steady billing to rate increases in Virginia last year by utility Appalachian Power Co. He said those increases have raised the mill's power costs by about 42 percent.

Thus, he worries about even higher electric bills because of Appalachian's ongoing quests for rate increases on top of rate increases -- especially during a knee-buckling recession when increased costs cannot be prudently passed on to buyers.

Among Roanoke-area businesspeople, ranging from manufacturing executives to small-business owners, Crawford has a lot of company. Many residential customers aren't happy either.

Economic developers fear that the region's long-standing reputation for comparatively low electricity costs, a lure for recruiting and retaining companies, is slipping away.

Competition

Dennis Dowdy owns the Hawthorn Suites hotel franchise in Blacksburg. He said the hotel paid about 41 percent more per kilowatt-hour consumed during the first six months of 2009, after rate increases, than it did during the same period last year.

Since then, the hotel's bills have stayed about 40 percent to 50 percent higher than they

(Excerpt) Read more at roanoke.com ...


TOPICS: Business/Economy; Culture/Society; Government; US: Virginia
KEYWORDS: aep; appalachianpower; business; capandtrade; carbonemissions; climatechange; coal; energy; globalwarming

1 posted on 07/30/2009 5:20:15 AM PDT by Perseverando
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To: Perseverando

Econ 101 learned the hard way.


2 posted on 07/30/2009 5:24:37 AM PDT by pointsal
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To: Perseverando

Hmmmm. I wonder why they raised rates? Power use in VA is WAYYYYY down.


3 posted on 07/30/2009 5:27:43 AM PDT by patton (Obama has replaced "Res Publica" with "Quod licet Jovi non licet bovi.")
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To: patton
Also in the article:

By some calculations, the monthly bill for a residential customer consuming 1,000 kilowatt-hours has the potential -- if current rate requests are granted on top of last year's increases -- to jump approximately 76 percent over a period of 17 months, according to the SCC.

So, if the SCC approves Appalachian's rate increases and subsidy revisions as submitted, Steel Dynamics' base rate increase will be about 12 percent while the residential rate will increase about 19 percent.

Yeah, that'll really stimulate the economy in Virginia.

4 posted on 07/30/2009 5:32:54 AM PDT by Perseverando
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To: pointsal

I RTWFA, and it’s interesting that no where in there was ANY discussion of absolute electric rates nor direct comparisons to other power company rates, nor cost of power generation of coal vs. nuclear vs. windmills.


5 posted on 07/30/2009 5:34:14 AM PDT by Paladin2 (Big Ears + Big Spending --> BigEarMarx, the man behind TOTUS)
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To: Perseverando

Wait until cap and trade hits.


6 posted on 07/30/2009 5:37:29 AM PDT by <1/1,000,000th%
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To: Perseverando

My electric bills (Dominion Power) haven’t gone up like that. I wonder what is driving Appalachian Power’s costs up so much?

Someone else in this thread suggested there might be windmills involved?


7 posted on 07/30/2009 7:01:53 AM PDT by CharlesWayneCT
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To: Perseverando

It’s no wonder why we import steel from China.


8 posted on 07/30/2009 7:06:35 AM PDT by the_devils_advocate_666
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To: Perseverando

If he thinks this rate increase is paralyzing just wait until Obummers energy cap and tax bill hits the bank balance.


9 posted on 07/30/2009 7:36:28 AM PDT by biff
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