Agency Alleges AEP Still Charged Unlawful Fees

A state watchdog says American Electric Power (AEP) has not completely removed unlawful charges from customers’ rates despite being ordered to do so by the Public Utilities Commission of Ohio (PUCO). An analysis by the Office of the Ohio Consumers’ Counsel (OCC) of AEP’s revised rates revealed the utility failed to remove about $54 million in charges associated with its perceived risk to provide backup power for shopping customers.

These charges were determined to be unjustified by the Supreme Court of Ohio.

In a filing Thursday, the OCC and the Ohio Partners for Affordable Energy requested the PUCO reject the revised rates filed by AEP last week and require the utility to immediately file rates that conform with the PUCO’s directive.

“Because of AEP’s actions, it is possible that customers will now pay an additional $54 million in unlawful rates,” Consumers’ Counsel Janine Migden-Ostrander said. “This is simply not right.”

The PUCO should consider assessing a penalty and directing the Ohio Attorney General to take action to collect the penalty, the OCC said in its filing.

The PUCO told AEP May 4 to file revised rates that removed charges for AEP’s perceived risk as a back-up electricity provider for shopping customers and carrying charges on environmental investments made prior to Jan. 1, 2009. The OCC and other customer groups asked the PUCO April 27 to stop the collection of these charges estimated to total $175 million through the remainder of 2011.

“These unlawful charges continue to be collected until the PUCO approves AEP’s revised rates. By filing rates that do not comply with the PUCO’s directive, lower rates for customers may be slowed,” Migden-Ostrander said.

The Court ruled 7-0 in an April 19 decision that the PUCO improperly allowed AEP to charge customers for unjustified expenses. The Court ruled in favor of the OCC on three of the four issues it appealed. The Court agreed that AEP’s 2009-2011 rate plan was unlawful because it including $63 million in retroactive rates. Additionally, the Court reversed the PUCO’s decision on $456 million in charges to potentially provide default service for customers who shop for an alternative supplier and $330 million in carrying charges for environmental investments that were not justified.