Late June Storms Likely To Cost Power Customers, Just Like Ike

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A late June storm topples a tree in Gahanna.(Photo: Karen Kasler, Ohio Public Radio)
A late June storm topples a tree in Gahanna.(Photo: Karen Kasler, Ohio Public Radio)

American Electric Power is finishing up its work restoring power to the few remaining customers who lost it during the June 29th storm. Now comes the task of totaling what the storm cost AEP, and who is going pay for it. WOSU reports the utility likely will ask its customers to pay much of the tab.

Remember Hurricane Ike that knocked out power to customers four years ago for days on end? Well, American Electric Power customers are paying for the damage and clean-up. That’s because the Public Utilities Commission of Ohio agreed that some of those costs should be passed on to rate payers. It’s not much, on average 20 cents more a month for the next 7 years.

After the recent storms, AEP likely will ask the PUCO for permission to do the same thing again; this, despite the power company earning nearly $2 billion in profits last year.

“I can’t address the amount of the profits,” said Vikki Michalski, who speaks for Ohio. “But like any industry that recovers costs associated with any natural disaster it’s just a part of doing business.”

Michalski said it’s too early to know how much the late June and early July storms will cost the company – or its customers.

“This is a very long process to get those total costs in,” she said.

But Michalski said clean –up and restoration costs are on track to be higher than Hurricane Ike in 2008, which tallied $42 million.

After that storm, The PUCO let AEP pass on $27 million of that clean-up cost to consumers.

Matt Schilling, who speaks for the commission, said it does not consider a utility’s profit margins when deciding how much storm costs a utility can recuperate.

“It’s really just a cost-based review of the actions they took related to the storm,” he said.

The Ohio Consumers Counsel monitors utility rates. Its spokeswoman Beth Gianforcharo said state laws incentivize utility companies to provide its customers safe and reliable service. And Gianforcharo said the counsel will advocate for consumers if and when AEP applies for clean-up recovery with the PUCO.

“We would be looking for a full review to make sure that the costs that get passed on to customers would be reduced as much as possible,” Gianforcharo said. “Again, we’re looking for customers to only pay what would be considered a reasonable amount of money for these storm recovery costs.”

Many scientists say the June derecho that knocked out power to about a million Ohio homes and businesses is an example of more severe weather to come. Some have called for AEP and other power companies to bury more electrical lines underground. It would cost billions of dollars.

About half of AEP lines in Columbus are underground.

AEP’s Michalski admits it’s less expensive to have lines above ground, and she notes underground lines would not have prevented widespread power outages in last month’s big storm because the high winds damaged many of the poles that take power to underground electrical sources.

“In this particular storm it was the transmission lines that took the brunt of that storm. Sure we had distribution issues as well but we had huge losses to our transmission system,” she said.

Rate payers should not expect to see this summer’s storms reflected in their bills anytime soon. AEP has just started collecting for the 2008 hurricane Ike damage.

Comments
  • Xflowers

    If the cause of the widespread damage is the transmission lines, then AEP needs to deal with this. They also need a plan on the table to bury wires. They don’t have to do it all at once, but they do need to come up with an orderly process for burial over a reasonable length of time that will minimize the extent and duration of these outages. Why should customers continue to pay for a faulty, unreliable system that fails under duress when we know that storms like what we’ve been seeing are on the uptick? We know why. AEP has a monopoly over power delivery leaving customers with no real choice. If the task of the Ohio Consumers Counsel is to insure safe and reliable service to the utilities customers (in other words, regulate the monopoly) then they should be in the forefront of demanding that the utilities modernize their delivery systems to insure “safe and reliable” power under today’s weather conditions. If the Counsel fails to do this, they are failing in their job.

  • jakaira

    boy ike was the most hurricane gt (grand turk) had that was most scaed