RICHMOND — The State Corporation Commission (SCC) has approved a request by Appalachian Power Company (APCo) to recover $26.1 million in costs associated with the acquisition and operation of the Dresden Generating Plant, a facility under construction and previously owned by a generation affiliate of American Electric Power.

The rate adjustment, added as a rate rider allowed by Virginia law, will become effective for service rendered on or after March 1, 2012. The new charge will increase the monthly bill of a residential customer using 1,000 kilowatt hours of electricity by approximately $2.08.

In APCo’s recent base rate case (PUE-2011-00037), the Commission reduced the company’s requested revenue increase by $27.53 million to reflect APCo’s planned acquisition of the Dresden facility. In the base rate order, the Commission stated “The acquisition of the Dresden Generating Facility will reduce the Company’s capacity equalization charges once the facility is placed in service,” and accordingly reduced the company’s base rate request.

In a prior order authorizing APCo to acquire the Dresden facility (PUE-2011-00023), the SCC found “… it appears that APCo’s customers will benefit from APCo’s ownership of the Dresden Plant,” due to its effect on potential future capacity payments.

The Dresden Generating Plant is a 580 megawatt natural gas-fired combined cycle power plant located near Dresden, Ohio. Appalachian Power projects that Dresden will begin commercial operations on or about February 29, 2012.

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Case Number PUE-2011-00036