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AEP Ohio Proposes Default Service Procurement Design Through 2024, Seeks Placeholder Rider for New Utility-Owned Generation

May 16, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

AEP Ohio has sought to extend its electric security plan through May 31, 2024, and would continue to rely on descending-clock auctions procuring a portfolio of 12, 24, and 36-month load following contracts to serve Standard Service Offer customers

Continuing with the current portfolio design, one-third of the SSO portfolio would be served under 12-month contracts; one-third would be served under 24-month contracts; and one-third would be served under 36-month contracts

Click here for AEP Ohio's proposed schedule of default service auctions, and products that would be used to serve customers during each delivery period

AEP Ohio is also proposing a Generation Resource Rider (GRR), which would be a placeholder for any new utility-owned generation developed by the company, which may result from legislative changes in response to FERC electing to review previously proposed PPAs between AEP Ohio and AEP's merchant arm

"The GRR helps AEP Ohio to address long-term capacity needs by providing the opportunity to build additional generation if needed in the future. For instance, if the Company were to build utility scale solar projects, the Company would expect recovery of the investment through the GRR. Because the term of the ESP is being extended through 2024, it is important that this mechanism is approved to provide generation investment opportunities to AEP Ohio if the need should develop, consistent with the options in the ESP statute. An added benefit is this option would provide a hedge against potentially volatile market prices. This rider will be designed to recovery renewable and alternative capacity additions as well as more traditional capacity constructed or financed by the Company and approved by the Commission," AEP Ohio said

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