American Electric Power Utility’s Earnings ‘Significantly Excessive,’ $156 Million Refund Due to Customers

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An analysis of an American Electric Power (AEP) utility’s profits by the Office of the Ohio Consumers’ Counsel (OCC) has concluded the utility’s earnings from its electric security plan were “significantly excessive.”

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It’s quite clear that customers have paid higher rates than is justified,'' Consumers’ Counsel Janine Migden-Ostrander said. ''Ohio law requires significantly excess earnings created under an electric security plan to be refunded and that is what we expect the PUCO to order AEP to do.

Columbus, Ohio -- An analysis of an American Electric Power (AEP) utility’s profits by the Office of the Ohio Consumers’ Counsel (OCC) has concluded the utility’s earnings from its electric security plan were “significantly excessive.”

The OCC has recommended to the Public Utilities Commission of Ohio (PUCO) that Columbus Southern Power be ordered to return up to $156 million to its customers as quickly as possible. The OCC was joined by a coalition of other intervening organizations in its call for refunds yesterday that included the Ohio Energy Group, the Ohio Manufacturers’ Association, Ohio Hospital Association and the Appalachian Peace and Justice Network.

The OCC, along with the coalition, determined that earnings for Columbus Southern Power were significantly excessive once they exceed 11.58 percent. Columbus Southern Power had an earnings rate of more than 20 percent in 2009.

“It’s quite clear that customers have paid higher rates than is justified,'' Consumers’ Counsel Janine Migden-Ostrander said. ''Ohio law requires significantly excess earnings created under an electric security plan to be refunded and that is what we expect the PUCO to order AEP to do.”

According to Ohio law, in each year of an electric security plan, an electric utility is required to show the PUCO its earnings under an electric security plan were not significantly excessive when measured against the earnings of comparable public companies. This significantly excessive earnings test is an important protection for customers against paying excessive rates.

About the Office of the Ohio Consumers’ Counsel

The Office of the Ohio Consumers’ Counsel (OCC), the residential utility consumer advocate, represents the interests of 4.5 million households in proceedings before state and federal regulators and in the courts. The state agency also educates consumers about electric, natural gas, telephone and water issues and resolves complaints from individuals. To receive utility information, brochures, schedule a presentation or file a utility complaint, residential consumers may call 1-877-PICKOCC (1-877-742-5622) toll free in Ohio or visit the OCC website at http://www.pickocc.org .

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