Update: The PUCO modified and approved AEP’s PPA settlement request authorizing AEP to begin collecting costs through the PPA Rider up through May 31, 2024. Although the Ohio Consumers’ Counsel estimated that the PPA Rider’s costs could be $1.9 billion over the eight-year term, the PUCO stated that it expects the PPA Rider to produce a net credit of $214 million. The PUCO modified the settlement to limit customer rate increases to 5% of the June 1, 2015 SSO rate plan bill schedules for the remainder of the current ESP period up through May 31, 2018; however, the PUCO did not address whether the caps will apply after this date. The stipulation featured a provision barring refunds to customers in the event the PPA Rider is invalidated, but the PUCO removed this provision. While the PUCO clarified that AEP, not customers, will bear the burden of Capacity Performance Penalties, the PUCO also stated that AEP is entitled to retain Capacity Performance bonus payments. The PUCO reserved the right to prohibit recovery of any costs related to any unit for any period exceeding 90 days for any forced outage during the terms of the PPA Rider. The PUCO modified the stipulation to bar AEP from recovering conversion costs and emphasized that AEP should not seek to recover retirement costs. The stipulation provided that AEP would maintain its headquarters in Columbus, but the PUCO modified this clause to provide that if AEP moves, the PUCO may terminate the PPA Rider. Under the modified and approved stipulation, AEP is authorized to flow through the cost impacts associated with its affiliate’s unregulated generating units together with its entitlement to the Ohio Valley Electric Cooperative starting on June 1, 2016.
Outside of the PPA Rider issue, the PUCO stated that it was unwilling to prejudge the outcome of other issues that will be featured in future filings. Nonetheless, the PUCO emphasized that many of the provisions were in the public interest, such as AEP’s commitment to develop 900 MWs of solar and wind resources together with its commitment to implement energy efficiency and demand response measures. The PUCO provided that the specific payments made to the Ohio Hospital Association and the Ohio Partners for Affordable Energy (OPAE) must be made subject to annual compliance reports. OMA Energy Group argued that the expansion of the IRP tariff and credit provision was anticompetitive and discriminatory; however, the PUCO found that this provision did not violate any regulatory principle and further determined that any other arguments about the IRP should be raised in a later proceeding.
OMA Energy Group and other parties argued that the PUCO’s actions unconstitutionally interfered with FERC’s authority to oversee the wholesale markets. But the PUCO declined to address this question. The PUCO did, however, emphasize its belief that its actions were strictly related to its retail ratemaking authority.
Some parties to the proceeding, including OMA Energy Group, have filed comments at FERC explaining that retail customers in Ohio are captive to the PPA Rider because they cannot avoid it by selecting a competitive retail electric supplier (CRES) of their choosing. For this reason, OMA Energy Group and others have asked FERC to rescind the waiver on affiliate power sales restrictions previously granted to AEP and its unregulated affiliate. The PUCO offered a limited response on this issue, noting its belief that retail customers are not captive because they still have the choice to select a CRES or remain on the SSO. Parties continue to await a FERC decision on this issue.
One of the next steps for opponents is to begin the process of preparing briefs asking the PUCO to reconsider its decision.
