Due to the recent completion of refunds to customers for over-collected fuel cost recovery amounts in prior months, along with higher natural gas and purchased power energy prices expected during the next 14 months, the electric bills of Public Service Company of Oklahoma (PSO), a subsidiary of American Electric Power (NYSE: AEP), will reflect an increase in the fuel cost adjustment factor, starting with the first billing cycle of April.
 
“As a result of the refunds, PSO customers have been paying lower prices for electricity over an extended period relative to the actual market price of natural gas incurred by PSO,” said David Sartin, PSO’s director of business operations support. “Now that we have completed the customer refunds we must increase the fuel cost portion of customers’ bills to reflect the actual cost of fuel as well as recognize the expected rise in natural gas and purchased power energy prices over the next 14 months.”
 
The fuel cost adjustment factor is a mechanism to “true up” in customer bills the actual cost of fuel used in generating electricity.  The adjustment can rise or fall depending on fluctuations in natural gas and purchased power energy prices.
 
It’s important to note that the April increase does not affect PSO’s base rates (basic price per kilowatt-hour charges), which will remain the same.  Only the fuel cost component of the bill is changing.  PSO makes no profit on fuel costs; customers pay only the actual costs that PSO pays for fuel that is used in generating electricity.
 
At present, a PSO residential customer using 1,000 kilowatt-hours (kWh) per month has a total electric bill of $71.47.  When the new, higher fuel cost adjustment goes into effect with the first billing cycle of April, that same residential customer will see a total electric bill of $90.20.
 
“While that amounts to an additional $18.73 for use of 1,000 kilowatt-hours, most residential customers are unlikely to see that great of an increase because they typically don’t use that much energy in April due to its mild weather,” said Sartin.  “The actual impact per customer will vary with individual usage.”
 
The higher fuel cost adjustment taking effect with April 2010 billing reverses the trend PSO customers experienced last year. Starting in December 2008, PSO reduced its fuel charge to customers six times as the result of the customer refunds and lower natural gas and purchased power energy prices.
 
“With the exception of the past year when we were making the refunds, PSO’s fuel prices are now at the lowest level customers have seen since the last half of 2002, even with the April increase in fuel cost adjustment,” said Sartin.

PSO encourages all customers to learn how to use energy more efficiently to help them control the size of their electric bills.  One of the best sources of information is on the Internet at www.PSOklahoma.com, where customers can find all sorts of energy-saving tips along with information about the extensive array of energy-saving programs PSO offers to customers.

 
PSO, a unit of American Electric Power (NYSE: AEP), is an electric utility company serving approximately 531,000 customers in eastern and southwestern Oklahoma. Based in Tulsa, PSO has 4,408 megawatts of generating capacity, and is the largest provider of wind energy in the state. 
 
American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP’s transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP’s headquarters are in Columbus, Ohio.