AEP Ordered to Stop Collecting "Unlawful" Charges

The Public Utilities Commission of Ohio (PUCO) suspended certain rates Wednesday that American Electric Power (AEP) was "unlawfully" charging after the Office of the Ohio Consumers’ Counsel (OCC) and other customer groups requested the changes. The rate changes will result in lower bills for customers.

“The OCC is pleased AEP has been required to reduce its electric rates after the Supreme Court of Ohio reversed the decision by the Public Utilities Commission of Ohio to raise them,” Consumers’ Counsel Janine Migden-Ostrander said. “While additional review is still needed, we are hoping the rate reduction the OCC and others sought and won will be realized so both residential and business customers can benefit.”

The PUCO directed AEP-Ohio to file proposed revised tariffs that would remove provider of last resort (POLR) charges and certain environmental carrying costs. The Commission issued its decision in response to its receipt of a remand from the Ohio Supreme Court that required it to reexamine parts of AEP’s electric security plan.

“While we were pleased that the Supreme Court agreed with the majority of our decision in AEP’s electric security plan case, it is nonetheless important to act quickly upon the issues remanded to the Commission,” PUCO Chairman Todd A. Snitchler stated. “Today’s order, on the Commission’s own initiative, addresses the issues identified by the Court and provides a route for the company seek an amended plan.”

On March 18, 2009, the PUCO approved AEP’s electric security plan. Under the plan, AEP was permitted to recover incremental carrying costs incurred after January 1, 2009 on past environmental investments made between 2001 and 2008. The company was also allowed to assess a cost-based provider of last resort (POLR) charge to customers through the end of 2011.

On April 19, 2011, the Ohio Supreme Court issued its ruling with regard to AEP’s electric security plan. The Court reversed the Commission’s decision allowing AEP to recover 2001-2008 environmental carrying costs and declared that the Commission incorrectly concluded that the POLR charge is cost-based.

AEP must file the proposed revised tariffs with the Commission by May 11, 2011. In the event that AEP intends to seek a non-cost-based POLR charge or a POLR charge based upon costs, or to seek recovery of environmental carrying charges pursuant to the Court’s remand, the Commission directs the company to make the appropriate filing in these proceedings. The Commission will establish a procedural schedule for consideration of any filings made by AEP in regard to this matter.