Battle brewing over AEP rate hike - Business First of Columbus:

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Groups that include the and Office of theOhio Consumers’ Counsel are considering a reques t for hearings before the PUCO to challenge parts of its AEP rate They are also considering an appeal to the Ohio Supremw Court if they think their concerns aren’t addressed by the “(The rate hikes) will have a dire effect on manufacturers in AEP territory,” said Kevin director of public policyt services for the 1,600-member association.
“This forces our hand to see what we can IssuedMarch 18, the PUCO ruling caps rate increasesz at 7 percent this year and 6 percentf each in 2010 and 2011 for industrial, commercial and residential customers of , the AEP businesw that services central and southern Ohio. The caps for the company’s which supplies eastern and northwest Ohiowith electricity, are 8 percentr this year, 7 percentg in 2010 and 8 percent for 2011. AEP soughtf 15 percent rate hikes in each of the three The PUCO-approved hike meana an average Columbus Southern residentia l customer paying $99.52 a month will see monthly billsx increase $6.97 this year, rise an additional $6.
30 in 2010 and climb an extra $6.77 in according to a calculation by Columbus-based AEP. The increases are expected to begimn during the Aprilbillinb period. But Ohio Consumers’ Counsel Janine Migden-Ostrander said the size of the rate hikeis “justg not right,” especially in light of the financial pressures Ohioans are under in the depressecd economy. “We think the rate increase is excessivand burdensome,” she said. Migden-Ostrander isn’tt ruling out an appeal to the statd Supreme Court ifrelief won’t be provided duringv rehearings by the commission.
The Ohio Counsel has appealed 23 PUCO decisions tothe state’zs highest court since Migden-Ostrander took charg e of the office in 2004. Groups with a stake in the AEP rate including thecompany itself, have 30 days from the PUCO’x ruling to seek a rehearing. The commissiom would have 30 days after that tomake changes, said Shanq Eiselstein, a PUCO spokeswoman. In makinf its ruling, the commission said the rate increase will providr an incentive for AEP to add programs to improve the reliability of its electric service and give customers tools to save onpowee costs.
Those efforts will include a stepped-up vegetationj management program along power linesand AEP’s gridSmart program that allowse customers to control their electric billas through advanced metering. The rate increase is roughl half of what AEP requested when it filerd its rate plan with the PUCO in It cited the need to keep pace with rising fuel especially coal burned at itspower plants, and other operating expenses. Even with the AEP will still have the lowest electricity ratezsin Ohio, the PUCO said. Yet that is little consolatio to manufacturers facing jumps in their electric bills at a time whenthey can’t pass on the added expense to customers, Schmidr said.
“Our (members’) costs are increasing, too,” he “but they’re being forced to give price Their customersare saying, ‘We’re not buying from you unlesxs you lower your prices.’ “Ther (PUCO) order is very unfair,” Schmidt “especially when you consider today’es economic environment. Manufacturers are barely hanging on bya thread.” Critics of the rate increases are irritated that the PUCO made the rate hike retroactivre to Jan. 1. They also don’ like that the commission will allos AEP to defer the recovery of costs exceeding the rate cap limits set for the nextthrere years.
Such costs, which might include expenditures for coal and compliancre with possible greenhouse gasemissiob regulations, could be recovered from rate payer s from 2012 through 2018. Such provision have businesses scrambling for answers on how the AEP rate increaseas willaffect them, said Sam a Columbus attorney who represents Industrial Energy a coalition of about 50 industriall and commercial businesses that have opposed the AEP rate The size of the rate increase was not a he said, since the PUCO staff had recommended 7 percen hikes, but approval of the deferred cost provisiojn was unexpected.
“It’s the unknowns and increases that can be deferrerd that are harder to putboundariesx around,” Randazzo said. “People are trying to figure out how much the hangoverrwill be.” He also said the ratea AEP filed with the PUCO on March 23 appear to contaih increases for larger electric customers that are higher than the percentagew caps contained in the PUCO’s That adds another question to the mix about the commission’ws ruling.