Update:  On May 14, 2014, the Commission issued an Opinion and Order adopting the findings of the financial and management/performance audits of AEP Ohio’s fuel adjustment clause (FAC) for 2010.  As noted in a previous Weekly Briefing, at the hearing on the matter, counsel for Industrial Energy Users-Ohio (IEU-Ohio) attempted to raise the issue of double recovery (recovered through the FAC and new cost-based capacity charge) of demand related charges.  The Attorney Examiner declined to hear the issue, stating that the evidence presented was outside the time period of the 2010 and 2011 FAC audits.

In its Opinion and Order, the Commission affirmed the Attorney Examiner’s procedural ruling, noting that there is nothing in the audit reports to support IEU-Ohio’s contention that AEP Ohio recovered its purchased power costs through the FAC as well as through the Company’s base generation rates.  The Commission stated that the alleged double-recovery issues related to certain demand charges have already been identified as the subject of the pending audit in Case Nos. 11-5906-EL-FAC, et al., which pertain to the 2012, 2013, and 2014 FAC audit periods.  The Commission further noted that a supplemental request for proposal has been issued to select an independent auditor to examine the double-recovery allegations raised by IEU-Ohio in Case No. 11-5906-EL-FAC, et al.  The Commission stated that the auditor selected in those cases will determine whether there is any merit in the double-recovery allegations regarding AEP Ohio’s capacity-related charges during the audit periods under review therein, and offer any recommendations for the Commission’s consideration.