COLUMBUS, Ohio, Aug. 8, 2012 – Today’s order from the Public Utilities Commission of Ohio (PUCO) on the company’s modified Electric Security Plan (ESP) grants many of the components necessary to address distribution reliability, economic development, and energy efficiency, but there are key issues that need to be resolved, according to American Electric Power (NYSE: AEP) and its AEP Ohio operating unit.
“We respect the Ohio Commission’s decision to accelerate the move to full competition, but have consistently emphasized the need for a reasonable transition that maintains the health of AEP Ohio,” said Nicholas K. Akins, AEP president and chief executive officer. “Today’s Commission order, when combined with the capacity order of July 2, provides more clarity on the timing and specifics of the transition. As we review the order and consider next steps, we will seek additional certainty regarding the transition to competition that our investors require.”
The PUCO did not rule on the company’s proposal to corporately separate its generation and wires assets in Ohio. “To ensure the development of a true competitive electricity market, it is critical the Commission issues a timely corporate separation order allowing AEP Ohio to effectively implement the desired outcomes in today’s ruling. Resolution of these three related cases is necessary to provide customers with the tools they need to manage their electricity costs and provide AEP Ohio with the resources it needs to continue providing reliable electric service to our customers.”
The company is concerned that the Commission did not decide corporate separation, but ordered AEP Ohio to double the competitive auction amount in 2013 and significantly advance the timing of subsequent auctions. The company’s proposed modified ESP also included significant additional revenues that the Commission denied. “We are disappointed that the overall value in the Commission’s order falls short of the reasonable proposal the Company offered,” Akins said.
In today’s order, the PUCO approved mechanisms for the company to recover costs associated with distribution reliability and vegetation management, as well as economic development and energy efficiency. Additionally, the PUCO approved a mechanism for AEP Ohio to defer recovery of storm costs until future prudence reviews are completed.
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 www.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 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 and north Texas). AEP’s headquarters are in Columbus, Ohio. News releases and other information about AEP can be found at www.aep.com.
Director - Communications, AEP Ohio
866/641-1151 or 614/883-7999
Bette Jo Rozsa
Managing Director, Investor Relations