Analysis of APCo/WPCo Merger

The West Virginia Consumer Advocate retained Synapse to determine if the proposed merger of Appalachian Power Company (APCo) and Wheeling Power Company (WPCo) would be beneficial for West Virginia ratepayers. Synapse reviewed the assumptions and computer modeling underlying APCo’s September 2011 IRP and the June 2012 Update. These reviews included an examination of the Companies’ forecasts of peak demand and energy requirements, the inventory of supply-side and demand-side resources considered, and the assumptions regarding the operating characteristics and costs of those resources. Synapse also verified the Companies’ projections of revenue requirements for each of its strategies using Strategist, the same computer simulation model APCo used, and then evaluated alternative strategies using that computer model. Finally, Synapse identified key uncertainties and risks associated with the resource portfolios the Companies evaluated.