The Commission has ordered AEP to return its rates, as mandated by Ohio law, to levels similar to those in place in December 2011.
The Public Utilities Commission of Ohio (PUCO) has disapproved AEP-Ohio’s electric security plan (ESP) as it was outlined in a settlement agreement submitted by 21 of 31 parties to the case.
Upon consideration of arguments raised by parties who did not sign the settlement agreement and upon becoming aware of the actual impacts of the agreement, the Commission found that approving the agreement does not benefit ratepayers and is not in the public interest.
The Commission has ordered AEP to return its rates, as mandated by Ohio law, to levels similar to those in place in December 2011. These rates will remain in place until a new rate plan is adopted.
"Our decision effectively hits the reset button on AEP’s electric security plan, allows us to start over from the beginning, ensure that we have a complete picture of any proposal, and balance the interests of all customers and the utility," Chairman Todd A. Snitchler stated. "Ohio remains committed to continuing down the path towards fully competitive markets."
The Commission is concerned by AEP’s recent proposal before the Federal Energy Regulatory Commission (FERC) to divest some of the company’s generation assets into neighboring states. AEP’s FERC filing fails to ensure that all generation assets currently owned by AEP will be bid into the company’s 2015 base residual auction. By taking quick, decisive action to rescind its December order and revoke asset divestiture, the Commission ensures that its consideration of this issue will not be pre-empted by FERC.
The Commission also acknowledges that small businesses and residential customers were negatively impacted by the order approved last December. Bills for certain customers significantly exceeded what was expected based on the record in the case.
"The evidence in the record inadvertently failed to present a full and accurate record of the actual bill impacts to be felt by customers," Snitchler continued. "This is particularly true with respect to low load factor customers who have high electricity demand for short periods and low usage the rest of the time."
While the PUCO today revoked the settlement agreement filed by AEP and other signatory parties in September 2011, AEP’s underlying application filed on Jan. 27, 2011 remains in place. AEP has 30 days to amend or withdraw the application. The PUCO has reopened intervention in the case to allow any party to participate in the proceedings and will issue a procedural schedule for the case when AEP responds.
Additional information regarding Thursday’s Commission order is available at www.PUCO.ohio.gov. Click on the link to "Docketing Information System" and enter case number 11-346-EL-SSO.