AEP Transmission Customers Face Soaring Costs

AEP Ohio customers will continue to see double-digit percentage increases in their electric transmission costs, which are embedded in retail electric rates. The driver is unfettered “supplemental” transmission project investment from AEP Transmission, which serves a multi-state region.

AEP Transmission’s underlying transmission rate (see this graph) has nearly tripled since 2015. Supplemental projects are not reviewed or regulated by PJM or the FERC, since such projects are not needed for system reliability. The Ohio Power Siting Board declined to exercise its duty to review the local supplemental project investments.

As a monopoly, AEP Transmission’s expenditures are not checked by market forces or buyers. The transmission rate increase will hit customers in the April billing cycle. Meanwhile, AEP, which reported a 14% increase in annual earnings last year, recently announced it is selling its competitive renewable energy generation assets in order to increase transmission investments. 3/7/2022