May 31, 2013
Update: Having received an extension in order to have adequate time to conduct an audit of AEP-Ohio’s storm expenses, PUCO staff filed its comments and recommendations on May 29, 2013. Staff comments noted $2.36 million in expenses that were inappropriate or unnecessary. In addition to some miscellaneous errors or overcharges, staff noted the following:
- Labor: AEP submitted all labor charges for inclusion in the rider, even though straight time labor rates for the first 40 hours was already included in customer base rates. For another company, staff found a discrepancy between the AEP invoice and supporting documents. Finally, staff found numerous invoices for Asplundh where double time rates were charged and paid, even though the contract required time and a half payment. Total: $1,306,753.
- Snacks, Hats and Advertising: Staff found that recovery of approximately $1.3 million in cost for snacks, food and drinks provided for workers performing storm repair was not appropriately recovered through a rider. Similarly, PUCO staff concluded that the $35,687 for embroidered hats given to employees as a token of the company’s appreciation should not be passed to consumers. Finally, approximately $368,000 for thank you ads ($176,174 of which appeared in newspapers outside of Ohio) were recommended for disallowance. Total: $1,042,119.
OMAEG comments in the case, which were due several hours after PUCO staff filed its report, encouraged the PUCO to further study AEP’s application and engage a closer examination of the entire application. Staff only reviewed a statistical sampling of the data AEP provided and found $2.35 million in recommended disallowances. OCC urged the PUCO to disallow the rider in its entirety, and identified over $8 million in requested recovery that it claimed should be disallowed.
OMAEGs position and litigation strategy will continue to take a more tempered, middle ground position. The PUCO has already ruled that storm rider recovery is an appropriate vehicle for utilities to recover costs incurred as a result of major storms and the PUCO will ultimately determine whether these charges are appropriately passed along to consumers through this rider. OMAEG will continue its involvement in the case to monitor the expenses allowed in order to ensure that only reasonable and properly documented expenses are charged back to consumers. OMAEG will also monitor to be certain that expenses claimed for purposes of the rider have not been double-counted because they are already included in the base rate. Since we have already intervened in the case, OMAEG is positioned to weigh in should that become necessary or beneficial.
