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Rising Electricity Generation Supply Costs Impacting Many Customers

Customers who receive their electric generation supply through AEP Ohio's Standard Service Offer (SSO) will see higher bills from June 2023 through May 2024 due to increased generation supply prices. Customers who are part of a municipal aggregation, participate in the Percentage of Income Payment Plan (PIPP) or shop in their individual capacity will not see this same increase.

We understand an increase - no matter how big or small - in your bill is not welcome news. We want to empower you with the latest information to save energy and find resources on payment assistance if you're facing financial hardship.

Average Monthly Payment (AMP) Our Average Monthly Payment (AMP) plan spreads the cost of your heating and cooling over the entire year, helping balance your electric bills and making it easier for you to budget.
Experiencing financial hardship? Find out what payment assistance options are available to you.

Understanding Your 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 Service (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 choose to receive your generation supply from AEP Ohio through the SSO, an external competitive auction process is used.

Why are bills increasing?

There are many factors that can impact your bill. This increase is largely due to the results of recent auctions for the generation supply portion of your electric bill. AEP Ohio is a wires company, which means we deliver electricity to homes and businesses. In Ohio, customers are free to choose who provides the generation supply portion of their electric service. If you choose to receive your generation supply from AEP Ohio, a competitive market auction is used to procure generation supply. Energy supply companies submit bids in the auction for the ability to supply energy to AEP Ohio customers for a specified period of time at the lowest price possible. This generation supply component is called the Standard Service Offer (SSO) and these procurement costs are external to AEP Ohio and beyond our control. Customers may also choose to receive their generation supply from a Competitive Retail Electric Service (CRES) provider.

During the most recent auctions, held in November 2022 and March 2023, the cost of procuring generation supply increased significantly and AEP Ohio is required to pass these costs along to customers. Global demand, global supply chain issues, economic uncertainty, and the continued war in Ukraine have had an impact on the cost to produce electricity. The results of these two auctions are blended to create the new rate. Due to these rising costs, a typical residential customer using 1,000 kilowatt-hours of energy each month can expect their total bill to increase about 28% from today's typical bill of about $155 to about $198. These rates will be in effect until May 2024.

The Price to Compare (PTC) for the current cost of generation supply is listed on the Apples to Apples comparison chart provided by the Public Utilities Commission of Ohio (PUCO). Our residential "Price to Compare" for the generation supply portion of your bill for June 1, 2023 to May 31, 2024 is $0.1184478/kWh.

The final prices for generation supply procurement set by the competitive auction are market-based and are reviewed and approved by the Public Utilities Commission of Ohio. It's important to note that because we are a wires-only company we only pass through the exact cost of generation supply (the price determined by the winning auction suppliers) to customers, dollar-for-dollar, with no markup.

Other Factors That Can Impact Your Bill

Even if the generation supply portion of your bill comes from a different generation supplier, there are still a number of factors that can make a difference on your bill.

Extreme Weather

When temperatures go up, so can your electric bill. Your energy usage can creep up quickly during the summer, which means higher-than-usual electric bills.

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 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

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 2023, the results of the auction lead to an increase in the price customers pay for the generation portion of their bill. A typical residential customer using 1,000 kilowatt-hours of energy each month can expect their total bill to increase about 28% from today's typical bill of about $155 to about $198. These rates will be in effect until May 2024.

The Price to Compare (PTC) for the current cost of generation supply is listed on the Apples to Apples comparison chart provided by the Public Utilities Commission of Ohio (PUCO). Effective June 1, 2023, the residential PTC for the generation supply portion of a customer's bill is $0.1184478/kWh.

Any bill created on or after June 1 is calculated using the new rate.

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:

Energy prices have increased significantly in the last few months. Global demand, global supply chain issues, economic uncertainty and the continued war in Ukraine have had an impact on the cost to produce electricity. As long as global energy supplies remain tight, we expect prices to remain higher than in recent years.

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, AEP Ohio will not profit from this rate change. Prices for generation supply are set by a market-based competitive auction process overseen by an independent auction manager - prices are reviewed and approved by the Public Utilities Commission of Ohio. We pass the actual cost (the price determined by the winning auction suppliers) directly to our customers, dollar for dollar, with no markup.

The auction results are not within the control of AEP Ohio. The following represents the results of auctions held to procure electricity for AEP Ohio's Standard Service Offer (SSO) customers from 2015 through 2023. The average auction clearing price, over this period, was $48.85 per megawatt hour (MWH). This compares favorably to the results in 2022 and 2023 that averaged over $90 per MWH. Since deregulation in Ohio started, the auction results show that the process to procure electricity has yielded competitive fair market prices. The current increase in pricing reflects variable market conditions due to inflation, price of natural gas and other market factors.

Source: The results for the AEP Ohio Competitive Bidding Process for SSO Supply auction are available at AEP Ohio CBP. Additionally, these results are filed with the Public Utility Commission of Ohio and are available at DIS - Case Record for 17-2391-EL-UNC (state.oh.us).

In January, we filed our Electric Security Plan (ESP), which included a proposed investment in infrastructure to improve the reliability of your service starting in June 2024. This includes updates to our tree maintenance program, establishing new money-saving programs for our customers and more.

The latest bill increases from the generation supply auction took effect in June 2023. They are unrelated to the ESP, which will not take effect until 2024, and are the result of a market-based auction process that is out of our control.

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.

The price to compare is the rate you will pay for electric generation if you do not switch to a Competitive Retail Energy Service provider. 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 choose who generates your power by visiting energychoice.ohio.gov.

Yes, in Ohio customers are free to choose who provides the generation supply portion of their electric service - either by affirmatively choosing a competitive provider or by receiving the default standard service offering. Customers can compare supply rates at energychoice.ohio.gov.

There are a number of required riders on electric bills that change periodically, based on approval of the PUCO.

Aside from visiting the energychoice.ohio.gov to compare generation prices, there is a time-of-use rate available for qualifying residential customers. The time-of-use rate applies only to energy usage between the hours of 6 a.m. to 9 a.m. from November through April, and between 2 p.m. and 6 p.m. from May through October. Customers can determine if they might benefit from this opportunity by logging in to your AEP Ohio account and taking the following steps:

  1. On the "My Account" home page, scroll to the bottom of the page and select "Electric Rates."
  2. On the "AEP Ohio Electric Rates" page, select "Compare Your Rates."
  3. On the "Compare Rates" page, scroll down until you see "Compare all rate plans."
  4. Listed below "Compare all rate plans" there is a section for "Residential Time of Use Service." Click "Learn More" to view further details about the Time of Use rate.

    a. To view the bill comparison on a monthly basis, while on the "Rate details" page, scroll down to "Monthly estimated costs" and select "Show monthly breakdown."

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