Tariff Included In AEP Ohio Pre-filing Notice Of New Rate Case Does Not Propose Any Costs To Be Recovered Under Placeholder Proxy For Supply-Related Costs Embedded In Delivery Rates

Supplier Tariff Included

April 29, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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AEP Ohio has filed with the Public Utilities Commission of Ohio a statement that AEP Ohio intends to file an application for approval of an increase in AEP Ohio’s electric distribution rates, tariff changes, and changes in accounting methods.

Per PUCO rules, the pre-filing notice included, "Proposed Tariff Schedules Intended to Replace or Add to Current Tariff Schedules"

Notable is that the proposed tariff schedules included in the pre-filing notice did not include any change to the current $0 "placeholder" value for the mechanisms previously adopted by PUCO as a potential proxy to reflect supply-related costs, embedded in AEP Ohio's distribution rates, in AEP Ohio's bypassable supply rate

Specifically, as previously reported, PUCO in a prior order authorized the creation of a bypassable "Retail Reconciliation Rider" and a nonbypassable "SSO Credit Rider".

As conceived by parties to a stipulation (later modified by PUCO) in an electric security plan proceeding, the bypassable Retail Reconciliation Rider was meant to reflect supply costs recovered in delivery rates, such as bad debt expense and the Commission and OCC assessments. A negotiated value of $1.05/MWh had been proposed in the stipulation

As conceived by parties to the stipulation, a nonbypassable SSO Credit Rider was to flow amounts collected under the bypassable Retail Reconciliation Rider to all distribution customers (less amounts used to fund a discount on AEP Ohio receivables paid to the utility by suppliers using a supplier consolidated billing pilot)

PUCO authorized the Retail Reconciliation Rider and SSO Credit Rider on a placeholder basis only, directing AEP Ohio to file tariffs with a $0 value for each rider. PUCO said that any amount for each rider would be determined in AEP Ohio's next rate case, which is the instant case for which AEP Ohio has pre-filed

In a 2018 order concerning the riders, PUCO said, "Based on the record, we find that it is reasonable to establish the CIR [former name of the Retail Reconciliation Rider] and SSOCR as placeholder riders, until a thorough analysis of AEP Ohio's distribution costs can be conducted by the Commission in the next rate case. Following that review, the Commission will determine whether there are known, quantifiable costs that are collected from all customers through distribution rates and that are clearly incurred by AEP Ohio to support the SSO. We note that many of the costs identified by RESA witness White may be incurred by AEP Ohio to support either the SSO or the customer choice program, as Mr. White acknowledged through his use of an allocation factor. Additional analysis is needed to determine whether and how AEP Ohio's Customer Accounts Expense, Customer Service and Information Expense, Administrative and General Expense, and Taxes Other than Income Taxes should be reallocated through the CIR and SSOCR."

PUCO had also directed that, "The Commission, therefore, finds that AEP Ohio should carry out its commitment to analyze, as part of the rate case, its actual costs of providing SSO generation service. AEP Ohio should also analyze, in the rate case, its actual costs associated with the choice program. Following a thorough analysis of AEP Ohio's distribution rates in the rate case, the Commission will determine whether it is necessary to reallocate costs between shopping and non-shopping customers, in order to ensure that the Company's rates are fair and reasonable for all customers."

AEP Ohio's proposed tariff schedules included in the pre-filing notice continue to reflect a $0 amount under both the Retail Reconciliation Rider and SSO Credit Rider

The tariff also includes retail supplier terms and conditions, including changes to the supplier terms and conditions. Additionally, the rate case may serve as a forum for suppliers to seek changes to the supplier terms and conditions not proposed by AEP Ohio itself, with the terms and conditions covering issues including, but not limited to, the switching fee, supplier creditworthiness, and billing options and procedures.

The $5 switching fee remains in AEP Ohio's proposed tariff, applicable under the same conditions as the current tariff

Among the proposed changes in the supplier terms and conditions are changes to the Pre-Enrollment Customer Information List language

Currently, the Pre-Enrollment Customer Information List section provides that, "Upon request, the Company will electronically provide to any CRES Provider certified by the Commission the most recent Customer Information List. The Company may request the CRES Provider to pay a one-time fee of $150.00 per Company rate zone list provided."

Under the proposed change, the Pre-Enrollment Customer Information List section provides that, "The Company will offer the Customer Information List to PUCO certified parties that are registered with AEP Ohio via the web portal. The list will be updated monthly and once the list has been updated, a CRES Provider, or other registered party must use the most current Customer Information List to contact customers." There is no fee for this information listed in the proposed tariff

The ability to access the customer list without charge via a portal reflects current practice (and is noted in the supplier handbook), but the current tariff language does not reflect this.

Case 20-0586-EL-ATA et al.

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