Ohio Supreme Court approves AEP’s 2012 fee pricing structure

COLUMBUS, Ohio (AP) — The Ohio Supreme Court on Thursday upheld a pricing structure for fees that competitors must pay to American Electric Power as the utility transitions to a competitive market.

The court sided with a 2012 decision by the Public Utilities Commission of Ohio to set the fee at $188.88 per megawatt-day.

The decision also upholds the requirement that AEP charge suppliers a lower market-based price.

AEP had objected to the $188.88 rate, arguing that it was too low to recover its actual costs to provide capacity, or the cost of maintaining a generating plant. The utility wanted to charge suppliers $355 per megawatt-day.

The Ohio Consumers Counsel, which represents utility consumers, had challenged PUCO’s authority to approve the capacity charge and to defer the recovery of capacity costs.

The court by a 5-2 vote rejected both challenges.

AEP 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.

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.

Justice Sharon Kennedy wrote Thursday’s opinion upholding the structure. Two justices dissented, including Justice Paul Pfeifer, who called the system a bad deal for AEP customers.

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