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Direct Testimony of Karl R. Rabago on behalf of Environmental Respondents In re: Application of Appalachian Power Company for a 2014 Biennial Review of the Rates, Terms, and Conditions for the Provision of Generation, Distribution, and Transmission Services Pursuant to § 56-585.1 A of the Code of Virginia

Tax Issues   
Virginia State Corporation Commission Case No. PUE-2014-00026. This testimony explains why the Appalachian Power Company's ("the Company") proposed standby charge would constitute an unjust, unreasonable, and improper discriminatory rate charged on solar customer-generators. The testimony states the proposed charge is inadequately supported and fails to meet the requirements of Virginia Code § 56-594 F. Under this statute, the Company must prove that its proposed charge would recover “only the portion of the supplier’s infrastructure costs that are properly associated with serving” solar customer-generators. The testimony argues the Company failed to meet its burden so the charge would be nothing more than a punitive tariff imposed on one class of customers. As a result, the testimony recommends the State Corporation Commission of Virginia determine that the Company has failed in meeting its burden to produce and substantiate costs that support its proposed standby charge.