PUCO modifies AEP-Ohio’s electric security plan

COLUMBUS, OHIO (July 23, 2009) – The Public Utilities Commission of Ohio (PUCO) today modified the electric security plan (ESP) approved for American Electric Power-Ohio (AEP-Ohio) in March 2009. The modifications made today were based on issues raised by parties through the Commission’s rehearing process.

The Commission upheld its decision regarding the phase-in of authorized increases to customers’ generation rates during the ESP. For Columbus Southern Power customers, these annual increases are capped at 7 percent in 2009 and 6 percent in 2010 and 2011. Ohio Power customers’ increases are capped at 8 percent in 2009, 7 percent in 2010 and 8 percent in 2011.

The Commission modified two provisions of its March 2009 order that will ensure that the rate caps are implemented by AEP-Ohio as intended by the Commission. Upon review of the work papers filed with AEP-Ohio’s tariffs and the comments received from parties to the case, the Commission found that the rate caps were exceeded for commercial and industrial customers. To address this issue, the Commission clarified today that AEP-Ohio should have calculated its allowable total revenue increase based on Ormet Primary Aluminum Corporation paying the Dec. 31, 2008 approved tariff rate for its rate schedule. Also, the Commission clarified that the calculation of the company’s allowable total revenue increase should have been levelized and not reflected variations in customer bills for tariff or voltage adjustments.

The Commission also directed AEP-Ohio to modify its ESP to remove the annual recovery of $51 million of annual expenses and associated carrying charges related to the maintenance and operation of its Waterford Energy Center and Darby Electric Generation Station facilities. This modification will impact the level of deferrals in the Columbus Southern Power service territory, such that the amount of future deferrals collected from ratepayers will be reduced.

On May 1, 2008, Gov. Ted Strickland signed SB 221 into law, marking the one year anniversary of the date he outlined his Energy, Jobs and Progress Plan to stabilize electricity prices, create jobs and expand Ohio’s green energy industry. SB 221 took effect on July 31, 2008 and incorporates a system under which rates would be set by the PUCO and outlines a path for electric utilities to implement market-based pricing.

On July 31, 2008, AEP-Ohio filed an application for an ESP. The PUCO modified and approved an ESP for AEP-Ohio on March 18, 2009. Applications for rehearing were filed by several parties April 16-17, 2009. On May 13, 2009, the Commission granted rehearing for further consideration of the matters specified in the applications.

AEP-Ohio must file tariffs consistent with today’s Commission entry on rehearing. A copy of today’s Commission entry is available at www.PUCO.ohio.gov. Click on the link to the Docketing Information System (DIS) and enter the case number 08-917-EL-SSO.

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08-917-EL-SSO

08-918-EL-SSO