AEP Customers Could Pay More Next Year
AEP electric customers could see their rates go up next year by as much as 6 percent now that the company has withdrawn from a settlement agreement with the Public Utilities Commission of Ohio PUCO.
Nearly 1 point 5 million customers of AEP subsidiaries Columbus Southern Power Company and Ohio Power Company could see their rates increase after January. AEP has dropped a settlement that it had agreed to after concerns by Ohio manufacturers and consumer groups in the state that AEP had excessive profits in 2009. The agreement was to not raise rates in 2011 nor pass down environmental costs spent next year. AEP spokeswoman Terri Flora says the company changed its mind after delays on finalizing the plan. Flora says there has been a lot of confusion since state lawmakers in 2008 passed an energy bill to evaluate the profits made by utility companies.
"When this law was passed there wasn't much direction given to the commission on how you define significantly excessive earnings. So there is concern that if you start to look at rebating or giving back your earnings to customers that investors and we are an investor owned utility that investors won't want to invest in your company," said Flora.
The Ohio Consumers Counsel objected to the agreement because it wants AEP to compensate customers for overpayment in 2009. Spokesman Anthony Rodriguez.
"Customers overpaid electricity in 2009 and they're entitled to every dollar of it back. The PUCO should really do what's right and return this excess money back to customers. They want a direct return and that's what they should get," stressed Rodriguez.
PUCO spokeswoman Shana Eiselstein says it's up now to the commission to decide what steps AEP will have to take. "This is the very first year that we have looked at earnings in terms of the significant earnings test," explained Eiselstein.
Eiselstein says because the agreement is off the table, AEP could increase its rates.
"It's possible that customers could see their rates go up next year again that would be a decision by AEP, but AEP does have authority in its current rate plan to increase rates 6 percent in 2011," added Eiselstein.
The PUCO will meet next week.