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AEP modifies rate proposal

April 26, 2012
By LINDA HARRIS - Business editor ( , The Herald-Star

STEUBENVILLE - Officials with AEP-Ohio are hoping the modified electric security proposal they've submitted to the Public Utilities Commission of Ohio satisfies the concerns of business customers who'd been alarmed by the extent of the increases built into their original proposal.

The company's original ESP "tried to get customers prepared for market-based pricing," AEP's Selwyn Dias said. "That is part of the reason some increases were larger than anyone expected. The new plan goes back to (what) we had three years ago."

Dias, AEP-Ohio's vice president or regulatory and financial services, said the modified plan "is very much different in the sense it addresses customer rate increases." The new, three-year plan would use "early, modest increases to get us to full market pricing" with about a 4.5 percent increase in the first year, about 4 percent the second year and a quarter-percent the third year.

He said those increases are needed to cover the cost of fuel that's been purchased for AEP-Ohio's plants but not paid for, investments that have been made with regard to distribution of services - essentially the lines that bring electricity into homes - and a retail stability rider that gets the company to market-based pricing.

"It will ultimately get all customers who choose to stay with AEP-Ohio for their electric service, who choose not to go to an alternate supplier, to an auction base," he said,

Dias said the company expects PUCO to decide whether to implement the plan by late July.

"Regardless of whether a customer stays with us for their generation supply or chooses an alternative carrier, they'll still continue to call us for issues" like downed lines, he said. Billing questions, however, would go to the supplier they choose.

He said the state's move to market-based pricing is rooted in the premise that "competition gives customers the best alternatives. It puts customers in control over who they buy their electricity from, how they use that electricity and, ultimately, the price they pay for (it)."

AEP-Ohio has 1.4 million customers.

Dias said consumers can check their bills for a "price to compare" line item that can compare to what alternative suppliers are offering before making a decision. He advises customers to "check the fine print" of any offer before committing.

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