If you have a standard WCF-project, you should only have the Web.config-file, not App.config.
I would skip the old way of using appSettings altogether. Use applicationSettings instead, by using the Settings-tab in the project's properties.
It will create this in Web.Config:
<applicationSettings>
<Projectname.Properties.Settings>
<setting name="Testenvironment" serializeAs="String">
<value>True</value>
</setting>
</Projectname.Properties.Settings>
</applicationSettings>
For more information: appSettings vs applicationSettings. appSettings outdated?