AEP Ohio, a unit of American Electric Power (NYSE: AEP), has filed a proposal with the Public Utilities Commission of Ohio (PUCO) to extend its current Electric Security Plan (ESP), with modifications, through May 2024.
The ESP would otherwise expire in May 2018. The proposal would continue AEP Ohio’s investments to improve customer service and reliability including proactive replacement of aging equipment and aggressive tree trimming and vegetation management programs to reduce outages. AEP Ohio also will invest in a new communications system to speed dispatching of crews and restoration of service when outages occur and security enhancements to better protect distribution substations from vandalism and physical attacks. The plan also will add new, smart technologies to AEP Ohio’s energy distribution network including microgrids to supply uninterrupted power to critical public safety infrastructure, electric vehicle charging stations and smart street lighting systems to support the Smart Columbus effort in Franklin and 10 surrounding counties.
“AEP Ohio is focusing on making investments that enhance the reliability and quality of service that we provide to our customers. This proposal will allow us to continue programs that have improved the reliability of our service in recent years and introduce new, smarter energy technologies on our system that help the system operate more efficiently and effectively,” said Julie Sloat, AEP Ohio president and chief operating officer, in a Nov. 28 statement. “It also gives us a way to invest in renewable generation that will bring clean energy, jobs and support economic development in Ohio.”
The modified ESP includes a mechanism to support recovery of future renewable generation investments made to benefit AEP Ohio customers as well as costs associated with AEP Ohio’s 423-MW contractual share of Ohio Valley Electric Corp. (OVEC) generation. OVEC operates the coal-fired Kyger Creek and Clifty Creek power plants. AEP Ohio has committed to developing 900 MW of renewable generation in Ohio, including 500 MW of wind and 400 MW of solar generation, contingent on PUCO approval.
AEP Ohio anticipates a decision on this filing from the PUCO in April 2017. If approved, the extended Electric Security plan would increase customer bills $1.58 per month for the average residential customer using 1,000 kilowatthours each month and receiving their generation from AEP Ohio through the auction process. Overall monthly electric bills for most AEP Ohio residential customers are expected to decrease during the eight year period of the plan due to reductions in other charges.
Said the Nov. 23 amendment application: “The Company’s proposal will continue to utilize auction-based pricing for the Company’s SSO customers through the full term of the proposed ESP. This procurement plan increases diversity of electricity supplies and suppliers, which supports reasonably priced retail electric service.
“The Company also proposes to change the manner in which it uses the power procured through its OVEC entitlement and its SSO auction procurement process. Currently, as a result of orders issued in [prior cases], the Commission has approved the collection from or payment to customers of the net amount of AEP Ohio’s OVEC entitlement costs and revenues on a nonbypassable basis through the PPA Rider. AEP Ohio proposes to transition from using the OVEC entitlement as the basis for a nonbypassable financial hedging mechanism implemented through the PPA Rider, to using it to serve SSO customers and recovering its costs through bypassable SSO rates…. The Company proposes to begin using purchased power from the OVEC entitlement to serve a portion of its SSO load in lieu of procuring an equivalent amount of power through its Spring 2017 SSO auction to serve that portion of the SSO load, the delivery of which must otherwise begin June 1, 2017. Accordingly, the Company requests interim relief to obtain approval to begin using the OVEC entitlement to serve SSO load June 1, 2017.
“The Company recognizes it is possible that the Commission will not be able to issue its final order in this proceeding in sufficient time prior to the Spring SSO auction to allow for replacement of power supplies that would otherwise be procured through the auction by the OVEC purchased power. In that event, the Company requests that the Commission timely issue an interim order approving this aspect of the Application, without prejudice to its ultimate decision regarding the matter, so that the transition can still occur on an interim basis beginning June 1. In the alternative, if the Commission prefers, the Company requests that the Commission authorize the Company, beginning with the Spring SSO auction, to procure the portion of power equivalent to the amount that could otherwise be provided by the OVEC entitlement through quarterly auctions. That would permit the Company to synchronize most closely the transition to using the OVEC purchased power to serve SSO load with a final order by the Commission’s approving the Application.
“The Company recovers Renewable Energy Credit (REC) expense through the bypassable Alternative Energy Rider (AER), which would continue through the term of the Amended ESP. REC expense is the identified renewable value of costs associated with acquiring or creating renewable energy.
“Given the potential need for AEP Ohio to develop new capacity resources during the extended term of the Amended ESP, the Company proposes a nonbypassable rider…. This Renewable Generation Rider (RGR) would be a placeholder until such time that the Commission authorizes nonbypassable charges for the life of specific projects in future RDR cases. Upon approval, the RGR would replace the renewable component of the PPA Rider.”
Under Ohio code, the commission is required to issue an order approving, or modifying and approving, an application for an ESP within 275 days. Consistent with that requirement, the company proposed the following procedural schedule to review the amended ESP:
- A technical conference should be held on Dec. 14, 2016.
- Motions to intervene shall be filed by Dec. 28, 2016.
- Testimony on behalf of intervenors shall be filed by Jan. 25, 2017.
- Discovery requests, except for notices of deposition, shall be served by Jan. 25, 2017.
- Testimony on behalf of commission staff to be filed by Feb. 1, 2017.
- A procedural conference on Feb. 14, 2017.
- The evidentiary hearing tocommence on Feb. 28, 2017.
- The commission to issue an order approving, or modifying and approving, the application by April 12, 2017.