COLUMBUS, Ohio, July 2, 2012 – American Electric Power (NYSE: AEP) President and Chief Executive Officer Nicholas K. Akins issued the following statement in response to today’s decision from the Public Utilities Commission of Ohio (PUCO) in the AEP Ohio capacity charge case.
"While it is disappointing that the PUCO did not fully recognize the value of AEP Ohio’s generation in this case, today’s decision is just one part of the process to determine a path to competition in Ohio. This path must provide both benefits for customers and a transition that maintains the financial integrity of AEP Ohio," Akins said. "It is clear that the PUCO recognized the relationship of this case with the pending Electric Security Plan case, and we’ll look to that decision to more fully define the combined impacts of these orders."
The PUCO determined a generation capacity cost for AEP Ohio of $188.88 per megawatt-day. AEP Ohio’s actual cost of capacity is $355 per megawatt-day. The Commission’s order said that AEP Ohio must charge competitive retail electric service providers the Reliability Pricing Model (RPM) price (currently $20.01 per megawatt-day), which is substantially below both AEP’s actual cost of capacity and the PUCO-determined capacity cost. Competitive retail electric service providers use AEP Ohio’s generating capacity to serve their customers. The PUCO indicated that AEP Ohio will be allowed to defer – under a method and over a period of time to be determined in AEP Ohio’s pending Electric Security Plan (ESP) case – the difference between the PUCO-determined capacity cost and the RPM price for recovery. An order in that case is expected in early August.
The PUCO postponed implementation of today’s order until Aug. 8 or until an order is issued in AEP Ohio’s pending ESP case, whichever is sooner.
AEP Ohio provides electricity to nearly 1.5 million customers of major AEP subsidiaries Ohio Power Company in Ohio and Wheeling Power Company in the northern panhandle of West Virginia. AEP Ohio is based in Gahanna, Ohio, and is a unit of American Electric Power. News and information about AEP Ohio can be found at aepohio.com.
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 39,000 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 and north Texas). AEP’s headquarters are in Columbus, Ohio. News releases and other information about AEP can be found at www.aep.com