Electric customers of AEP Ohio will pay more in transmission costs.
The basic transmission cost rider is scheduled to go up $10 in April, from about $33 a month to about $43 a month for an average residential user of 1,000 kwh a month.
The rider increase was approved earlier this month by the Public Utilities Commission of Ohio. The fee allows AEP to recoup charges for transmission costs that the regional grid operator charges the electric company.
The company said the increases are needed to recover higher costs and provide reliable service.
"Providing reliable service relies on a resilient energy delivery system. As AEP Ohio has continued its commitment to invest in new transmission lines and replace aging infrastructure to better serve customers of all classes, costs have gone up," a statement from the company said.
There will be a "new substantially lower" rate for electricity starting in June, after higher-than-normal energy costs drove the rates up for customers last year. That rate is decreasing by about $30 in June. Shopping customers won’t see that change, but anyone using the standard service office will, company spokesperson Scott Blake said.
"All total, even with transmission costs going up, total monthly bills for non-shopping customers will be about $20 less beginning in June 2024 than they were in June 2023," Blake said.
Representatives at watchdog organization the Ohio Consumers’ Counsel aren't happy about the changes to the transmission fee. The organization wanted AEP's request to be thrown out because the decision from the PUCO also shifts the burden of paying the fee more toward residential customers than commercial ones.
This is how the OCC worded their opposition in a statement:
"The PUCO last week socked AEP residential consumers with a $154 million transmission charge bill. Under its order, the PUCO and AEP agreed to transmission charge increases to residential consumers via the (basic transmission cost rider) that amount to about $10 a month more beginning in April. And, at the same time, AEP is reducing transmission charges to big businesses and forging ahead with an expanded pilot program that allows certain big businesses to opt out of paying for the transmission charges under the BTCR rider. This is not good news for AEP residential consumers."
Residential customers will have to pay 32% more for the rider than before, while the commercial and business consumers will pay $114 million less, the OCC stated.
"The shifting of cost responsibility within Rider BTCR causes residential consumers’ share of the rider costs to balloon from 43% to 53%. The large increase in BTCR charges to residential consumers coming from a reallocation of Rider BTCR is unfair, unjust and unreasonable to residential consumers who are already being squeezed by other utility rate increases,” the statement continued.
AEP countered that point stating, "Residential customers used a larger share of the transmission system at peak demand, resulting in a larger rate increase for residential customers."
The company stated the formula used to calculate transmission rates has been approved by state and federal regulators.
But the OCC thinks the PUCO made the wrong move.
“Regrettably, because of the PUCO’s order, AEP’s residential consumers will pay higher electric bills. Ohio utilities’ transmission spending that receives no regulatory review for need or prudence continues to be a problem for Ohio utility consumers that foot the bill," OCC Director Maureen Willis said.
The company was allowed to collect funds in earlier cases to improve their infrastructure, the OCC argued. A case in 2021 increased the fixed delivery costs consumers pay in exchange for promises of improvements to grid technology.
The OCC filed a complaint with state regulators about how AEP Ohio is paying for its transmission costs.
