AEP Backs Off on Rate Hike Plan
COLUMBUS, Ohio (AP) – A rate proposal that American Electric Power Co. submitted to Ohio regulators on Friday discards several charges that delivered high bills to businesses, churches and schools while retaining a request to collect fees when customers switch to competitors.
The plan replaces one rejected last month by the state Public Utilities Commission and would run from June 2012 to May 2015. Residents would see rate increases of about 5 percent, meaning an average bill would rise about $6.24 to $7.40 monthly. Small business rates would increase 2 to 5 percent.
The earlier plan was had been approved by the commission and went into effect in January. But commissioners revoked it after weeks of criticism from customers, including some school districts that said it nearly doubled their electric bills.
The commission had ordered the Columbus-based utility to return its rates to levels similar to those in place in December, rates that will remain in place until a new plan is adopted. One small company had complained of an increase of about $28,000 in annual electric bills.
AEP has also drawn fire over its request to charge a fee when customers switch to a competing electricity provider.
It’s asking the commission to allow it to charge one fee to the first 21 percent of customers who switch, while charging a higher fee to any additional customers who switch. After June 2013, the lower fee would apply to the first 31 percent of customers who switch, and after June 2014, it would apply to 41 percent. All switching customers would get the lower rate in 2015.
AEP’s current president and chief executive Nicholas Akins says the plan allows a reasonable transition to a competitive market while allowing the company to maintain financial stability.
Competitors have criticized the plan, saying it would give AEP special treatment and effectively close the door on competition by allowing fees that wipe out any savings other electric companies could offer customers.
Doug Colafella, a spokesman for Akron-based FirstEnergy Corp., blasted AEP for asking for the increases at a time when electric rates are low.
“Customers in Ohio should be able to take advantage of the low prices that are out there in the marketplace, but essentially this new plan imposes barriers that basically prevent customers from seeking lower prices one of things abundantly available in the competitive market,” he said.