In other words, they didn't make enough of a profit and they need the rate increase to make more than a 10.2% profit. What they didn't add is that they need the rate increase to help cover the cost of building the new Coal Fired Power Plant in Wise County. Also according to the article, Appalachian Power gets about 98% of its electricity from coal.
A couple of thoughts about this. First, AEP did things to cut cost and increase efficiency across the states they operate, which is a good thing. Second, just like all those conservatives out there that say increasing taxes during a recession is a bad idea, so is increasing utility rates. AEP's revenues were down, which means that their customers were cutting back because of the economy and were trying to conserve energy to put more money back in their own pockets. AEP's request for a rate increase is just like raising taxes on people that don't have the money to spend on more expensive energy. Third, Appalachian Power gets 98% of it's energy from coal. That's way too much. They need to diversify where they are getting their energy from. I know that the United States is the Saudi Arabia of Coal, but the less coal we use and the more clean energy or biomass energy sources (chicken and cow poop) we use, the more we will reduce our carbon footprint.
If this doesn't convince the SCC that Appalachian Power's request for a rate increase is not necessary, I don't know what will.