Apr. 28--CHARLESTON, W.Va. -- Appalachian Power Co. said it asked for an 18.5 percent interim rate hike "in a realistic and constructive spirit," but opponents told the state Public Service Commission they're against any increase without due process.

Appalachian and Wheeling Power, subsidiaries of American Electric Power, asked for a $442 million or 43 percent rate hike on March 9 to recover fuel, purchased power and pollution control equipment costs. The companies said the request -- the largest in state history -- includes no profit.

Because of the slowing economy and the fact that many of their customers are facing financial difficulties, the utilities suggested that the increase be phased in over three years, rather than all at once on July 1. They proposed a first-year increase of $180 million or 18.5 percent.

After the state Public Service Commission delayed enactment of the request until December, the utilities asked for an interim rate hike of 18.5 percent effective July 1. The commission held a hearing Tuesday on the interim request.

William Porth, counsel for the utilities, said an interim increase would be an "initial and meaningful step in coping with the gap in cost and revenues being produced."

Porth said $156 million of the $180 million request is purely to recover costs. He said that as of the end of March, the total under-recovered amount had already reached $157 million. The ratepayers are therefore protected from being over-charged, he said.

But Derrick Williamson, general counsel to the West Virginia Energy Users Group, rejected that argument. "Due process will protect ratepayers," he said.

The Energy Users Group is an association of energy-intensive industrial customers: DuPont, Bayer Crop Science, Bayer Material Science, PPG Industries, Air Products & Chemicals, West Virginia Alloys Inc., and EQT Production Co., formerly known as Equitable Production Co.

Williamson pointed out that the 18.5 percent increase requested for the first year of the utilities' three-year phase-in proposal is identical to their interim request. "They say they filed it in a constructive spirit," he said. "We view it as a request to adopt their original filed phase-in. We haven't had an opportunity to do a further analysis. That proposal hasn't been balanced against other phases or other proposals that may be filed."

The energy users group may propose an alternative phase-in, Williamson said. "We haven't had that opportunity," he said. "We would prefer to have that opportunity."

Although the interim request represents an average increase of about 18.5 percent for all customers, fuel costs are a larger share of industrial users' total rate, Williamson said.