September 2, 2016, Volume 5, Issue 125

09/02/2016

Update: AEP and Staff filed a stipulation that seeks to resolve AEP’s significantly excessive earnings test (SEET) cases for 2014 and 2015. The stipulation recommends that the PUCO find that AEP did not have significantly excessive earnings for 2014 and 2015. Analysis from the Office of the Ohio Consumers’ Counsel (OCC) and the Ohio Energy Group (OEG), however, shows that AEP could potentially owe a SEET refund ranging from approximately $20 million to $113 million. Though Ohio Supreme Court precedent requires all parties to a proceeding to have an opportunity to participate in settlement discussions, OMA Energy Group was never invited to participate in settlement discussions. Moreover, the stipulation appears to predetermine the outcome of one of the issues from the Ohio Supreme Court’s decision on AEP’s ESP 2, wherein the Court directed the PUCO on remand to more fully explain its rationale for setting the SEET threshold at 12% for the duration of the ESP 2. The stipulation assumes that AEP will prevail on its challenge to the 12% SEET threshold established by the PUCO in AEP’s ESP 2 case and that AEP will not have to refund to customers $20 million that would be deemed excessively earned for 2014 under a 12% SEET threshold. A hearing is scheduled for September 13, 2016.

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