AEP Customers to Only Get Partial Refund

American Electric Power customers are only getting a partial return of unjustified costs they have paid the utility as a result of a ruling by the Public Utilities Commission of Ohio, the Office of the Ohio Consumers’ Counsel said.

The OCC advocated for returns and rate reductions of more than $787 million after the Supreme Court of Ohio ruled the PUCO wrongly approved costs that AEP charged its customers. The PUCO ruled only $78 million should be returned to customers.

“Because of the OCC’s strong advocacy for consumers and successful appeal to the Supreme Court of Ohio, AEP customers will save $78 million,” said Consumers’ Counsel Janine Migden-Ostrander. “Unfortunately, the savings to customers should have been $787 million. The PUCO failed to fully protect the public interest by allowing AEP to keep part of the costs ruled unjustified by the Court.”

The OCC argued throughout the case that AEP did not prove that it incurred costs to provide backup power for shopping customers or that carrying charges for environmental investments prior to 2009 should be allowed. Carrying charges include costs for a return on investments, depreciation, administrative costs, income taxes and property taxes.

Without the successful arguments of the OCC and the Industrial Energy Users – Ohio at the Supreme Court of Ohio, customers would still be paying for unjustified costs claimed by AEP. In April, the Court agreed with the OCC and Industrial Energy Users – Ohio that there was no evidence for AEP to charge customers $456 million to provide backup power for shopping customers.

The OCC’s advocacy in the appeal also resulted in the Court’s ruling that $330 million in environmental investments were unjustly approved by the PUCO; and that the PUCO wrongly approved $63 million in retroactive rates. Because the OCC was financially unable to post a bond that would have stayed AEP from collecting the $63 million, the utility was able to keep the money under current law. The Court, in its decision, said changes in the law would have to be made to correct the bond requirements for state agencies to be able to prevent this from occurring in the future.