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Rising Fuel Costs & Your Electric Bill:
What You Need to Know

As the world continues to recover from the impacts of the pandemic, it’s no secret that many Americans are noticing significant changes to everyday expenses, including the costs of gas, food, construction materials and more due to supply chain issues and other factors.

Utilities, like AEP Ohio, are no exception. Natural gas and coal prices — two primary fuel sources for electricity generation — are at prices we have not seen in more than a decade and are beginning to impact electricity prices across the nation.

In Ohio, customers have a choice as to who provides their electric generation, AEP Ohio or a competitive retail energy supplier (CRES). If you elect to have AEP Ohio provide your generation, a competitive market auction is used to procure generation supply. This is where energy supply companies submit bids in the auction for the ability to supply energy to AEP Ohio customers for a specified time period at the lowest price possible. This generation supply component is called the Standard Service Offer (SSO).

During the most recent auction in March 2022, the cost of securing generation supply increased significantly for reasons beyond AEP Ohio’s control. Due to these rising costs, customers that use AEP Ohio for generation will see an increase of about 2 cents per kilowatt hour in the SSO price on their electric bills beginning in June 2022.

The final prices set by the competitive auction are market based and are reviewed and verified by the Public Utilities Commission of Ohio. It’s important to note that we only pass through the exact costs to the customer, with no mark-up. These generation rates will be in effect until May 2023.

Experiencing financial hardship?

Find out what payment assistance options are available to you.

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Breaking Down Your Electric Bill

There are three common portions of your energy bill:

  • Generation (Supply): The cost for the production of electricity. Customers in Ohio can choose their energy supplier or remain on the Standard Service Offer (SSO) rate.* Visit energychoice.ohio.gov to compare Competitive Retail Energy Suppliers (CRES) providers and their rates.
  • Transmission: The cost associated with moving electricity from the generation site to substations near your community.
  • Distribution: The cost for moving electricity from a substation directly to your home or business.

*If you elect to have AEP Ohio provide your generation supply through the SSO, an external competitive auction process is used.

How to read your bill

How the electric system works

Other Factors That Can Make a Difference

Mother Nature

Your energy usage can creep up quickly during the summer months, which means higher than usual electric bills. There are a lot of factors at play—from how well your home is insulated to your air conditioner working overtime to combat the heat.

Extra Billing Days

It's normal for the number of days in each billing cycle to change from month to month. More days per cycle will cause your bill to be higher. You can see the number of days in your billing cycle on the front page of your bill.

Energy Supply Rates

AEP Ohio delivers energy to your home and maintains power lines and equipment. Customers who select a CRES provider to supply their electricity through our lines may have different rates. See page three of your bill to learn about choosing who supplies your power and visit energychoice.ohio.gov for CRES providers and their rates.

Energy Saving Tips

From simple actions you can take around your home to data available at your fingertips, we’ve gathered these savings resources and recommendations:

Payment Assistance

We recognize that financial hardships happen, and sometimes you might need a little extra support paying your bill. Whether you need more time to pay or would like to set-up a payment arrangement, we can work together to find the right option for you.

Enroll in Average Monthly Payment Plan (AMP)

Keep your payments consistent throughout the year with our AMP plan. It balances out your bill by making minor adjustments each month, so you don’t experience extreme highs and lows.

Enroll in AMP

Set Up an Extended Payment Arrangement

In cases where bill payments have fallen behind, it may make sense to consider setting up a payment arrangement.

Set up an arrangement

Explore Payment Assistance Programs

Learn more about the options available at AEPOhio.com/Assistance, message us on Facebook or Twitter, or call our Customer Solutions Center at 800.672.2231 to talk about options available to you.

Find programs

Frequently Asked Questions

Effective June 1, rates are set to increase approximately 2 cents-per kilowatt hour. The monthly increase for a residential customer using 1,000 kilowatt hours per month will be approximately $18.

The auction costs are passed through to AEP Ohio customers with no mark-up.

We recognize that financial hardships happen, and sometimes you might need a little extra support paying your bill. Whether you need more time to pay or would like to set-up a payment arrangement, we can work together to find the right option for you:

For the generation (supply) portion of your bill a competitive market auction process is used. This is where energy supply companies submit bids in the auction for the ability to supply energy to AEP Ohio customers for a specified time period at the lowest price possible. This generation supply component is called the Standard Service Offer (SSO).

The auction for the SSO is conducted by an independent auction manager and the whole process is overseen by a consultant approved by the Public Utilities Commission of Ohio.

No, this increase is a result of the recent market-based auction. For residential customers, the base rate case resulted in a monthly decrease of 0.58% or $0.71 for an average residential customer using 1,000 kilowatt hours per month, effective December 2021.

Energy prices have increased significantly in the last few months. Global demand, global supply chain issues, and the war in Ukraine have all impacted fuel prices, which have increased the costs to produce electricity.

Natural gas and coal prices — two primary fuel sources for electricity generation — are at prices we have not seen in more than a decade and are beginning to impact electric prices across the nation. As long as global energy supplies remain tight, we expect prices to remain higher than in recent years.

The price to compare is the rate you will pay for electric generation if you do not switch to a Competitive Retail Energy Supplier. It is, in part, based on results from the competitive market auction. See page three of your electric bill to learn about the price to compare and choosing who generates your power by visiting energychoice.ohio.gov.

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