Groups Ask Court to Stop "Unlawful" AEP Charges

The Office of the Ohio Consumers’ Counsel (OCC) and additional customer groups filed a request this week to protect customers by stopping the collection of $175 million in electric rates. The filing at the Public Utilities Commission of Ohio (PUCO) is in response to the Supreme Court of Ohio’s recent unanimous decision that American Electric Power (AEP) was unlawfully allowed to increase several rates.

“Immediate action must be taken to protect AEP’s customers from paying unlawful charges approved by the PUCO and reversed by Ohio’s Supreme Court,” Consumers’ Counsel Janine Migden-Ostrander said. “AEP should not be allowed to continue to collect these charges while they remain under PUCO consideration on remand. Every day that goes by without action by the PUCO to either reduce rates to customers now or to, at a minimum, set aside dollars collected pending final resolution, will be dollars lost for all AEP customers.”

The groups joining the OCC include the Ohio Energy Group, Ohio Partners for Affordable Energy, Ohio Manufacturers’ Association and the Ohio Hospital Association.

The coalition asked the PUCO to take immediate action to prevent AEP’s customers from continuing to pay charges determined by the Supreme Court of Ohio to be unlawful. These two charges – compensation for AEP’s perceived risk as a back-up provider of electricity for shopping customers and carrying charges on environmental investments made prior to Jan. 1, 2009 – continue to be collected from customers. The Court remanded the two issues to the PUCO for further consideration.

If no action is taken by the PUCO, AEP’s customers will continue to pay $22 million per month in unlawful charges or nearly $175 million over the remaining eight months of the utility’s rate plan while the PUCO sorts through the issues on remand. The coalition is concerned that once the charges are collected it will be more difficult to return them to customers. For instance, the Court has already ruled that funds collected earlier in 2009 were unlawfully collected but cannot be retroactively refunded to customers.

The filing by the OCC and other parties also requests an expedited ruling by the PUCO.

The Supreme Court of Ohio ruled 7-0 in it April 19 decision that the PUCO improperly allowed AEP to charge customers unlawful and unreasonable rates. The Court ruled in favor of the OCC in agreeing that AEP’s 2009-2011 rate plan was unlawful by including $63 million in retroactive rates, $456 million in costs to potentially provide default service for customers who shop for an alternative supplier and $330 million in carrying charges for environmental investments.