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West Virginia Ratepayers Need Relief as Electricity Costs Continue to Rise

REAL: West Virginia Should Embrace a Solution That Protects Ratepayers

BYOP policy would allow large energy users to procure their own electricity, reducing pressure for utilities to build expensive new power plants funded by customers

ARLINGTON, VA (September 9, 2026) — During peak summer months, West Virginia families and businesses have been hit with electricity price increases that they are now discovering in their bills. Utility companies are also starting to propose building new, costly power plants –– that ratepayers will have to pay for –– to meet the growing demand for electricity. The Retail Energy Advancement League (REAL) is urging policymakers to pursue a proven policy solution that can protect ratepayers from bearing the growing cost of new utility-owned power plants.

Customers of both Appalachian Power and Mon Power/Potomac Edison are seeing higher costs on their monthly bills. 

  • July 1: Appalachian Power customers began paying an average of $4.84 more per month to cover the $40.1 million rate increase approved for infrastructure investments and labor costs. 
  • August 1: Mon Power and Potomac Edison customers began paying an average of $3.65 more each month for similar investments, with another $4.01 monthly increase scheduled for June 2027 under an approved two-step rate increase.

At the same time, Mon Power and Potomac Edison are now seeking approval to construct a $2.48 billion, 1,200-megawatt natural gas power plant and three solar projects –– costs that would ultimately be recovered from customers. This surcharge would later transition into cost recovery fees for any overages or costs for owning and operating the facility –– more costs passed onto consumers.

A recent report from the Cardinal Institute for West Virginia Policy and R Street revealed the need for an energy solution as West Virginia families are paying a larger share of their income for electricity than residents of any neighboring state.

REAL supports a Buy Your Own Power (BYOP) policy that was introduced by Sen. Patricia Rucker and Del. Tristan Leavitt during the 2026 legislative session. This policy –– named the Energy Freedom & Fairness Act –– would allow qualifying commercial and industrial energy users to procure their electricity directly from competitive suppliers, limiting the need for utilities to build and bill ratepayers for the cost to build generation to meet all future demand. This is a targeted approach to reduce the amount of new generation built by utilities and paid for by ratepayers. It does not restructure or deregulate the market.

The benefits of a BYOP policy are:

  • Protects ratepayers from rising costs: Allows a limited number of large users to procure their own power, reducing the amount of new utility-built generation — and guaranteed profits — that all ratepayers must fund.
  • Strengthens reliability and resource adequacy: Frees up system capacity so utilities can manage retirements and focus on keeping the grid reliable and affordable for households and small businesses.
  • Attracts and accelerates new generation through private investment: Independent producers can build power faster and with private dollars, adding needed capacity without passing on the construction costs of new power plants.
  • Promotes economic growth: Helps address a large operation cost for large energy users to make investments and attracts major employers, bringing jobs and tax revenue.

West Virginia’s strategy to reach 50 gigawatts of capacity power by 2050 requires about 34 more gigawatts of power resources to be constructed. The $2.48 billion proposal for new generation proposed by Mon Power and Potomac Edison will only result in about 1.2 gigawatts of capacity generation. For that trend of new utility-built power generation to continue and meet the 50 gigawatt goal, it will cost ratepayers tens of billions of dollars.

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Energy News

Affordability Should Be the Standard

The proposed NextEra-Dominion merger has quickly become a debate over size, scale and shareholder value. It should be a debate about whether this transaction will make electricity more affordable for customers.

To date, the companies have yet to clearly demonstrate how the transaction will produce lasting affordability for customers. 

NextEra has led the conversation with $2 billion in customer bill credits. That’s an attractive headline, but it isn’t a cost containment strategy. Bill credits expire. Utility mergers don’t.

The combined company would control one of the nation’s largest regulated utility footprints while pairing Dominion’s rapidly growing load — driven largely by data centers — with NextEra’s extensive generation and infrastructure development business.

Investors may see opportunity. Regulators, however, have a different responsibility: determining whether the transaction serves the public interest and produces measurable benefits for customers.

America needs more generation and transmission to meet growing demand, yes. But regulators should carefully examine whether this merger will reduce customer costs or simply increase the amount of investment ultimately recovered from captive ratepayers.

History suggests that those questions deserve careful scrutiny.

Dominion understands the consequences of large utility investments that don’t go according to plan. Its acquisition of SCANA brought with it the legacy of the failed V.C. Summer nuclear project, which cost ratepayers roughly $12 billion. More recently, Dominion’s Coastal Virginia Offshore Wind project has seen costs climb by more than $1 billion. You can quickly see how minimal those $2 billion in credits can be.

These aren’t just questions being raised by market participants. Virginia Lt. Gov. Ghazala Hashmi recently challenged whether regulators have enough information to independently verify the companies’ claims, warning that merger applicants often control the narrative while the public is left evaluating broad promises rather than measurable commitments. And –– in a more recent and unprecedented event –– Virginia Gov. Abigail Spanberger announced plans to intervene in the proposed merger.

This isn’t NextEra’s first attempt to acquire a utility. Regulators in Hawaii ultimately rejected its acquisition of Hawaiian Electric after concluding the companies had not demonstrated sufficient customer benefits. Proposed acquisitions in Texas, South Carolina and Jacksonville likewise failed to reach the finish line. None of those outcomes determines the merits of this transaction. But they do underscore why regulators should independently verify — not simply accept — the applicants’ claims. 

If this merger will deliver lasting affordability, the companies should explain:

  • Where the savings will come from;
  • When customers will realize those savings;
  • How they will be measured; and
  • What protections exist if those savings fail to materialize.

Those answers matter far more than bill credits.

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Energy News

Discovering a BYOP solution to an energy problem

“For the first time we seem to have a solution.”

During a panel discussion at the 2026 National Conference of State Legislatures (NCSL) Summit, West Virginia Speaker of the House of Delegates Roger Hanshaw promoted energy legislation that will support and protect residents and businesses in the Mountain State.

Like many states, West Virginia policymakers are in search of a solution that can shield ratepayers –– their constituents –– from the extreme costs of utility-built or retrofitted power plants that are being proposed to meet growing demand. First Energy’s proposal for a natural gas plant and multiple solar facilities in West Virginia is projected to cost at least $2.4 billion. According to a First Energy spokesperson, this would be a more than two percent rate increase each year for residents through project completion (targeting 2031). Ratepayers are frustrated over the proposed increases, and policymakers want to protect their pockets.

“We seem to have a strategy that allows large load users to take advantage of newly built generation provided by a third party that would overall lessen the demand on the grid making electric service more reliable for residential ratepayers while simultaneously protecting the residential rate base from the swings associated with the return on invested capital,” Hanshaw shared in a room packed with policymakers and legislative staff from around the country.

The legislation is the Energy Freedom & Fairness Act, a buy your own power (BYOP) model that allows some large energy users to procure their own electricity from competitive energy suppliers, rather than relying on the utility to build and bill all ratepayers for all of the new capacity needed to serve customer demand. 

“We’re excited about this legislation. We’re excited about what it could potentially be for our economy just as much from a reliability perspective as from an economic development perspective,” Hanshaw continued.

Kent Chandler, a former chairman of the Kentucky Public Service Commission, joined Hanshaw on the panel and echoed the benefits of a state policy that allows large energy users to buy their own power. Chandler pointed to the growing demand for electricity, the wave of existing power plant retirements and the costs that burden ratepayers in the vertically integrated states where utilities recover those costs –– plus return on equity. 

If customers buy power outside of the utility it is financed by private companies, not ratepayers. Every megawatt hour procured outside of the utility is that much less the utilities will need to build and bill, helping to blunt the significant costs otherwise facing West Virginia ratepayers.   

Data from Lazard’s 2025 Levelized Cost of Energy projects that one gigawatt (GW) natural gas plant (a less expensive baseload power generation source) costs ~$1.5 billion, conservatively –– paid for by consumers. 

West Virginia produces about 16 GWs of electricity and aims to expand its total generation capacity to 50 GW by 2050 under the state’s “50 by 50” energy strategy.

“That’s almost the magic bullet for us,” Hanshaw said. “It’s why we are interested in this legislation. It’s why the state of West Virginia is expected to begin consideration of this when we convene in January of 2027. We want to generate power. We want to export power. We’ve been exporting power for 200 years and we want to keep doing it. But we also know as representative legislators we have obligations to constituents, we have obligations to residential ratepayers that we have to honor and protect.”

Electricity is becoming a top cost driver for commercial and industrial businesses. Not having the ability to shop for long-term contracts and cheaper electricity prices makes it harder for major employers in West Virginia to outperform competitors. Those costs also prohibit investments in their operations.

West Virginia is surrounded by states who already allow large energy users to procure their own electricity in some form. This legislation is targeted just for large energy users. It will not “deregulate” or fully open the state’s energy market to competition, but it will allow for investments from private capital.  

With access to serve large energy users through a wholesale market, independent power producers (IPP) are attracted to states where there is a BYOP option for consumers. These power producers invest private capital –– not ratepayer dollars –– to build new power generation in those states. The ability for IPPs to construct power sources is more often faster and more efficient than when an investor-owned utility (IOU) does it, because the financial risk is on the IPP with no ratepayer involvement. 

Analysis of data from the U.S. Energy Information Administration shows that IPPs have built nearly 3x more capacity generation than IOUs between the years of 2008 and 2024. In 2024 alone, IPPs built nearly 5x more capacity generation.

For Hanshaw, he sees the opportunity to continue to make West Virginia more powerful while protecting his constituents.

“That’s why we’re interested in this approach to generation,” Hanshaw added. “It’s why we’re interested in this solution to a problem. It’s why this template bill caught our attention.”