On July 15, 2009 APCo filed a base rate case under the re-regulation law in Virginia. The law requires the Commission to initiate proceedings to review the rates, terms, and conditions of all investor-owed incumbent electric utilities during the first six months of 2009, after which electric utilities will be required to file base case proceedings on a biennial basis.

Due to a decision by the VSCC on July 14, 2009 with regard to rate case PUE-2009-00019 defining the required capital structure to be the actual end-of-test-year period, on August 14, 2009 APCo filed supplemental schedules to reflect an end-of-test-year period. This reduced the original requested revenue increase by approximately $15MM.

On January 11, 2010 APCo filed a motion requesting a change to the procedural schedule to file supplemental schedules and testimony in order to adjust the demand allocator used in its original filing. The revised procedural schedule is given below.

As provided by Section A4 of the law, APCo filed a Transmission RAC (T-RAC) in conjunction with its base case filing. The T-RAC filing provided recovery of costs charged to the Company by PJM Interconnection LLC, the Regional Transmission Entity of which APCo is a member. Therefore, transmission costs have been excluded from the base case filing, and rates determined by the base case will be for Distribution and Generation service only.