Why West Virginia’s Electricity Surplus Has Not Lowered Rates — and Why the Problem Is Getting Worse

The Promise of Lower Rates

West Virginians are frequently told that exporting electricity lowers local power bills. The argument is simple: because the state produces more electricity than it consumes, selling the excess should reduce costs for residents. However, publicly available data shows that this claim does not hold up. Despite producing significantly more electricity than it uses, West Virginia households continue to pay more than the national average for electricity, and the gap is not closing.

Electricity Production and Consumption in West Virginia

According to the U.S. Energy Information Administration 2024 data, the last year information is available, West Virginia generated 50,594,818 megawatt-hours of electricity. In the same year, total in-state electricity sales to residential, commercial, and industrial customers totaled 32,990,570 megawatt-hours. This results in a surplus of 17,604,248 megawatt-hours, meaning the state produced roughly one-third more electricity than it consumed, with the excess sold out of state.

West Virginia Bills Compared to the National Average

Yet this surplus has not translated into lower bills. In 2024, the average monthly residential electricity bill in West Virginia was $154.76, compared to a national average of $142.26. This means West Virginians paid approximately 8.8 percent more than the average U.S. household, or about $150 more per year.

Why Lower Prices Do Not Mean Lower Bills

This outcome is often misunderstood because West Virginia’s average electricity price per kilowatt-hour was actually lower than the national average. In 2024, the state average price was 15.07 cents per kilowatt-hour, while the national average was 16.48 cents. Higher bills are driven not by price, but by consumption. The average West Virginia household used 1,027 kilowatt-hours per month in 2024, compared to the national average of 863 kilowatt-hours.

Aging Local Distribution Infrastructure

The core problem is not a shortage of electricity generation or long-distance high voltage transmission capacity. It is the condition of West Virginia’s local lower voltage distribution grid. Aging local distribution infrastructure leads to inefficiencies, higher energy losses, and increased costs that are passed directly to consumers. However, the local grid is only part of the explanation for why rates continue to rise.

Follow the Money

The financial benefits of surplus electricity are often described as flowing back to ratepayers, but the evidence suggests otherwise. Profits primarily flow to energy companies that own generation facilities, transmission infrastructure, and/or retail operations. While the state does receive some tax revenue, the amount is limited relative to the scale of the industry. Again in 2024, the West Virginia Legislature’s Biennial Tax Report shows that $126.7 million was collected in Business and Occupation taxes from public utilities and electric power producers during the reporting period. How much of these tax benefits actually flow back to local jurisdictions is not clear. 

Utilities such as Appalachian Power often argue that ratepayers benefit because they “own” the power plants. Under this claim, revenue from excess electricity sales is credited back to customers through the West Virginia Public Service Commission’s (PSC) Expanded Net Energy Cost (ENEC) process, theoretically lowering monthly bills. In reality, bills continue to rise. Before any sales revenue reaches ratepayers, utilities recover their own guaranteed costs. These include plant construction and capital recovery, return on equity, debt service, fixed operating and maintenance expenses, and capacity obligations – the list is much longer. By the time these costs are paid, ratepayers are last in line and rarely see any meaningful benefit from so-called profit sharing.

Through the ENEC mechanism, the WV PSC allows utilities to recover certain fuel and purchased power costs from customers. As one example, in 2023 the PSC approved $321.8 million in ENEC recoveries for Appalachian Power Company and Wheeling Power Company, a process the Commission describes as “making the utilities whole.”

Why Utilities Prefer Transmission Over Generation

What is rarely discussed is that energy companies are far more attracted to long distance high voltage transmission than to generation. Generation is subject to market risk, price volatility, and changing profit margins. Transmission, by contrast, is effectively a risk-free venture. Once a transmission project is approved, the costs to build and maintain the line are guaranteed, and energy companies are paid even if the project is delayed or fails to deliver the promised benefits. Transmission projects earn a guaranteed return on equity, with the full cost passed directly to ratepayers. Large transmission lines can cost millions or even billions of dollars to construct, and energy companies earn their return on equity (ROE) based on those construction costs. The longer the transmission line, the more it cost, the greater the potential profit. As a result, energy companies have little incentive to build generation close to where electricity is needed, especially if doing so would reduce the need for expensive new transmission infrastructure.

Transmission Lines are NOT Distribution Lines

When energy companies claim grid improvements are necessary, that is partially true. Improvements are urgently needed in local distribution systems. The misleading part is the suggestion that high-voltage transmission lines improve local reliability or reduce household electric bills. Electricity delivered to homes and businesses flows through local distribution lines, not long-distance transmission corridors.

Projects such as the Mid-Atlantic Resiliency Link and Valley Link are designed to move large quantities of power across West Virginia to serve out-of-state demand, particularly data centers in Northern Virginia. These projects do not upgrade local distribution systems, do not reduce outage frequency, and do not lower rates for West Virginia customers. In the case of NextEra’s MARL project, the company is not responsible for the state’s distribution infrastructure. Most of West Virginia’s distribution systems are owned and maintained by subsidiaries of FirstEnergy.

Transmission Lines are not the answer – They are part of the problem

Rates continue to rise because of an inadequate local distribution grid, underperforming power generation, and the cost of paying for transmission lines that do not benefit the local grid or economy. Unless state policy requires utilities to reinvest in modernizing local distribution infrastructure, West Virginians will continue to pay above-average electric bills despite living in a power-exporting state. Expanding transmission for out-of-state benefit will not change that reality and may further increase costs borne by local ratepayers.

Anthony “Tony” Campbell

West Virginians Against Transmission Injustice (WATI)

President