Some Current Commercial Shoppers at AEP Ohio to Lose RPM-Price Capacity Allotment Under Interim Relief

An Ohio attorney examiner has established a procedural schedule to determine a state compensation mechanism for capacity provided by AEP Ohio to retail suppliers, while the Retail Energy Supply Association sought rehearing of PUCO's decision to grant AEP Ohio interim relief with respect to capacity provided to retail suppliers.

Under the new procedural schedule, AEP Ohio testimony is due March 23 (if it elects to update its prior testimony in the case), and all intervenor testimony (excluding Staff) is due March 30.

A hearing will commence on April 17.

RESA also sought rehearing on PUCO's interim order under which, "the first 21 percent of each customer class shall be entitled to tier-one RPM pricing. All customers of governmental aggregations approved on or before November 8, 2011, shall be entitled to receive tier-one RPM pricing. The second-tier charge for capacity shall be at $255.00/MW-day."

RESA said that as a result of this interim relief, it was informed by AEP Ohio that as soon as practical AEP Ohio intends to remove a significant number of commercial customers who are currently receiving RPM priced capacity under Tier One via their competitive retail electric service providers (CRES) and begin charging those customers the Tier Two price of $255 per Megawatt-day.

That is because more than 21% of the commercial class load was engaged in shopping and was receiving RPM pricing under the prior capacity price methodology.

"AEP Ohio under its interpretation of status quo, unless this Commission grants rehearing, intends to go back in time and eliminate a significant number of commercial customers from Tier One pricing even though those customers began shopping before the Stipulation and have been charged RPM capacity prices at all times prior to the March 7, 2012 Entry. This is inequitable because such customers began shopping only with the expectation of RPM pricing and such customers thought they were covered by the Stipulation and assured RPM pricing. This is inequitable because such customers will be exposed to the potential triple rate change described above. This is inequitable because such customers and the CRES who supplied them could not have foreseen the dramatic shifts in the state established capacity price which is an unavoidable cost of providing competitive retail electric service," RESA said.

"At this time, neither the customers or the CRES have any idea which of the retail customers who have been shopping and paying RPM capacity pricing prior to last September 7th will now be charged Tier Two capacity rates. The task is larger than just determining chronologically which commercial customers began services with a CRES before 21% of the commercial load commenced shopping, for the Commission in its January 23, 2012 Entry instructed AEP Ohio to create a separate category for Governmental Aggregation who had ballot approval and perfected programs prior to December 31, 2012. Thus, commercial customers in approved Governmental Aggregation programs now need to be pulled out of the commercial class prior to recalculating the 21%," RESA said.

"Stripping existing RPM capacity priced commercial customers will have a chilling effect on shopping by making shopping seem risky and unpredictable. For these reasons it is unjust and unreasonable to now permit AEP Ohio to charge any customer who was shopping prior to the Stipulation and being charged RPM capacity charges to now be switched to Tier Two pricing for the next three months," RESA said.

"The purpose of the Commission's March 7, 2012 Entry was to temporarily suspend the 'flash cut' to 100% RPM pricing, not to strip RPM pricing from customers who have always received it in order to thwart non aggregation shopping or create a revenue stream for AEP Ohio that it did not have under the Stipulation," RESA said.

"The simple solution is to order that anyone receiving RPM as of January 2012 will continue to receive RPM. Any customer class that is not at 21% switching will be able to receive RPM up to 21% of the load in that class and that a government aggregation program will receive RPM with no load cap," RESA requested.