Ohio Consumers’ Counsel Files new Appeal of AEP Case at Supreme Court

The Office of the Ohio Consumers' Counsel (OCC) is back in court trying to stop American Electric Power (AEP) from collecting hundreds of millions of dollars in unlawful rate increases.

Columbus, Ohio (Vocus/PRWEB ) November 5, 2009 -- The Office of the Ohio Consumers' Counsel (OCC) is back in court trying to stop American Electric Power (AEP) from collecting hundreds of millions of dollars in unlawful rate increases.

Important and costly elements in AEP’s rate plan should be overturned and we have renewed our request for the Court to review our arguments

Since the PUCO has issued its latest decision, we have taken further action to protect residential customers from rate increases we believe are unlawful.

The consumer advocate filed a new appeal of the company’s rate plan today with the Supreme Court of Ohio. The action follows the court’s Oct. 29 dismissal of the OCC’s first appeal because the Public Utilities Commission of Ohio (PUCO) had not ruled on two applications for reconsideration filed by the OCC and other parties. The PUCO dismissed those applications Wednesday, prompting the new appeal.

“Important and costly elements in AEP’s rate plan should be overturned and we have renewed our request for the Court to review our arguments,” Consumers’ Counsel Janine Migden-Ostrander said. “Since the PUCO has issued its latest decision, we have taken further action to protect residential customers from rate increases we believe are unlawful.”

In September, the OCC filed its original appeal and a motion for the Court to stay the $63 million retroactive portion of the rate increase that was part of a March 2009 decision of the PUCO. That decision implemented new rates for AEP, with the rates charged to customers beginning April 1, 2009.

The original and new appeal noted the following errors by the PUCO:

Retroactive ratemaking: AEP was permitted to collect all new charges under its electric security plan retroactive to Jan. 1. Legal decisions and current law in Ohio prohibit this action. The OCC estimates if the retroactive rates are not stopped, it will cost all Columbus Southern Power (CSP) customers (residential, commercial and industrial) approximately $30 million, while all Ohio Power (OP) customers will pay an extra $33 million. CSP and OP are subsidiaries of AEP. Provider of last resort charges: AEP was permitted to recover 90 percent of its provider of last resort (POLR) charge request, which is costing all AEP customers $456 million over three years. The POLR charge is based on AEP’s estimated financial risk that customers who shop for alternative suppliers will come back to AEP, and AEP will be required to serve them. The OCC contends AEP has been overcompensated for this risk, which is practically nonexistent in the current market because no choices exist for residential customers. The new revenue to be collected by AEP for the POLR risk represents a 567 percent increase (Columbus Southern Power) and a 38 percent increase (Ohio Power) over the POLR charge collected from customers prior to the approval of the electric security plan; Interest charges on environmental investments: AEP was permitted to charge customers “carrying charges,” or interest, for environmental investments that occurred since 2001. This would add approximately $110 million annually to all AEP customers’ bills. State law prohibits the collection of interest for past environmental expenses; and Failing to compensate customers for profits from selling electricity outside AEP-Ohio’s service areas. The OCC contends that because customers have paid for the power plants through their rates, they deserve a share of the profits.

About the Office of the Ohio Consumers’ Counsel
The Office of the Ohio Consumers' Counsel (OCC), the residential utility consumer advocate, represents the interests of 4.5 million households in proceedings before state and federal regulators and in the courts. The state agency also educates consumers about electric, natural gas, telephone and water issues and resolves complaints from individuals. To receive utility information, brochures, schedule a presentation or file a utility complaint, residential consumers may call 1-877-PICKOCC (1-877-742-5622) toll free in Ohio or visit the OCC Web site at www.pickocc.org.

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