COLUMBUS, Ohio (AP) — Ohio utility regulators on Monday set a new pricing structure for fees that competitors must pay the Columbus-based American Electric Power as it transitions to a competitive market.
The decision by the Public Utilities Commission of Ohio followed a months-long battle that included dueling television ads between AEP and a chief competitor, Akron-based FirstEnergy Solutions, over whether the plan to charge AEP competitors was fair.
The commission’s order sets the fee at $188.88 per megawatt-day, but requires AEP to charge suppliers a lower market-based price, currently $20.01 per megawatt-day.
Regulators said AEP can recover the difference in amount between the so-called capacity charges, but the commission will decide later how that will work. The chairman of the commission said he expects regulators to rule in August on the company’s mechanism to recoup that money, when they take up other issues that will affect AEP customers’ rates.
The capacity charge at the center of Monday’s 4-1 commission ruling is not assessed directly to customers, but businesses could choose to pass along the increase to them.
AEP had sought to charge suppliers $355 per megawatt-day. The company had defended its proposal as allowing it to stay on solid financial footing and retain jobs as it transitions from decades as a regulated monopoly to a more nimble player in the competitive market. But competitors contended the added charges would make it impossible to compete in AEP territory.
AEP President and CEO Nicholas Akins said he was disappointed in the decision, but saw it as just one part of the process to determining competition in the state.
“This path must provide both benefits for customers and a transition that maintains the financial integrity of AEP Ohio,” Akins said.
A spokesman for FirstEnergy said the company was reviewing the order and wouldn’t have an immediate response to the commission’s decision.
The new capacity pricing system would be effective Aug. 8 through May 2015.
Todd Snitchler, the utility commission’s chairman, said he doesn’t believe the public dispute over rates and fees will discourage consumers from shopping around for the best utility prices or keep suppliers from entering the market.
He said the agency has hired four employees to answer questions and educate residents and small business owners about the new competitive market.
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.
