AEP Ohio Provides Analysis Of Default Service-Related, Choice Costs In Distribution Rates

June 16, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

As part of a rate case, and per prior direction, AEP Ohio has filed what it described as a quantitative and qualitative analysis of its costs related to the provision of SSO service (default service) that are included in its distribution cost of service, and the costs related to shopping service that are included in the distribution cost of service.

Specifically, AEP Ohio identified a portion of uncollectible costs and PUCO and OCC assessment fees to be assigned strictly to non-shopping customers, as well as certain choice-related costs to be assigned strictly to shopping customers. In addition, the company reviewed certain functions, such as its call center, accounting operations, and billing system that are, "clearly necessary to support both shopping and non-shopping customers."

As previously reported, PUCO in a prior order had 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. 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. PUCO directed AEP Ohio to study the costs in delivery rates related to SSO service, as well as costs in delivery rates that support customer choice

As first reported by EnergyChoiceMatters.com, the proposed tariff filed by AEP Ohio in the rate case (both an initial tariff and then later clean and redlined versions) did not include any change to the current $0 "placeholder" value for the bypassable "Retail Reconciliation Rider" and nonbypassable "SSO Credit Rider".

However, the newly filed cost analysis filed by AEP Ohio does include a calculation for the amount of a Retail Reconciliation Rider and SSO Credit Rider; though, again, such amounts have not been proposed to be placed into the tariff.

Specifically, the cost analysis shows a bypassable Retail Reconciliation Rider Rate of $0.0003120 per kWh

The nonbypassable SSO Credit Rider Rate would be $(0.0000808)/kWh

In calculating the Retail Reconciliation Rider, costs in distribution rates partially allocated to SSO include PUCO & OCC Assessment Fees and Uncollectible Costs. These amounts were offset, in part, by amounts in delivery rates related to customer choice support, such as Provider Support Costs and Choice Specific IT Costs

With respect to qualitative costs, AEP Ohio examined costs related to Call Center; General Plant, A&G; Regulatory, Accounting & Legal; and Printing and Postage

For the call center, AEP Ohio said, "Call's [sic] not tracked based upon Choice or Non-Choice, Calls primarily related to service or billing, including both SSO and choice billing"

For Regulatory, Accounting & Legal, AEP Ohio said, "Costs related to both Choice and SSO, including Rider Administration, Settlement Systems, EDI Working Group, Rulemakings"

For Printing and Postage, AEP Ohio said, "No difference in Company costs unless Supplier Consolidated Billing"

The AEP Ohio SSO cost analysis, which includes amounts for various cost factors assigned to SSO, retail choice, or distribution, can be found here

Case No. 20-586-EL-ATA et al.

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