Update: On July 27, 2015, the Office of the Ohio Consumers’ Counsel (OCC), Industrial Energy Users-Ohio (IEU-Ohio), and the Environmental Law and Policy Center, Ohio Environmental Council, and the Environmental Defense Fund (collective, Environmental Advocates) filed notices of appeal of the Commission’s Opinion and Order and subsequent entry on rehearing on various issues considered in the ESP III case. In its notice of appeal, OCC asserted the following assignments of error:

1. The Commission is preempted from approving AEP’s proposed power purchase agreement rider by the Federal Power Act, through the Supremacy Clause of the U.S. Constitution, and specifically, the doctrines of field and conflict preemption;
2. The Commission’s approval of the placeholder power purchase agreement rider is unreasonable and unlawful because the Commission’s orders are not supported by findings of fact made from the record in this proceeding; Ohio law does not permit an ESP to include a “financial limitation on customer shopping;” the PPA rider does not provide rate stability or certainty to customers as required by Ohio law; the PPA rider is an anti-competitive subsidy because it permits the utility to collect generation-related costs through distribution rates; the PPA rider is an unlawful transition charge because it requires AEP customers to pay for AEP’s (and its affiliate’s) lost generation revenues; and the order contain an asymmetric “severability provision” to address a potential rejection of the approved power purchase agreement rider without requiring the rider to be collected from customers subject to refund; and
3. The Commission erred by finding that the ESP was more favorable in the aggregate than a market rate offer would be, given that the Commission failed to quantify the costs that the placeholder PPA rider would impose on AEP’s customers over the three year term of the ESP.

The Environmental Advocates also asserted assignments of error relating to the lawfulness of the PPA rider in their Notice of Appeal, as did IEU-Ohio. In addition to the arguments also asserted by OCC, IEU-Ohio also raised the following assignments of error related to the PPA rider and the Basic Transmission Cost Rider (BTCR) in its notice of appeal:

1. The ESP orders are unlawful and unreasonable because the Commission engaged in rulemaking without complying with the requirements of the Revised Code as a means of authorizing an application process that would permit AEP to seek to recover above-market wholesale generation-related costs;
2. The ESP orders are unlawful because the Commission is preempted from authorizing a transmission-related rider that precludes customers eligible to secure transmission service from PJM (pursuant to the FERC-approved tariff) from doing so and makes them captive to an electric distribution utility for transmission services at prices and terms and conditions that are different from those contained in the PJM tariff;
3. The ESP orders are unreasonable because the BTCR reduces the options available to customers seeking to secure transmission services and frustrates price signals that may assist in providing transmission system reliability; and
4. The ESP orders are unlawful because they presume that the rate design of the BTCR proposed by AEP was reasonable and shift the burden of demonstrating the unreasonableness of the proposed tariff to intervenors, in violation of certain requirements of Ohio law, which place the burden of proof on AEP.