AEP Ohio to File Modified Electric Security Plan Today

AEP Ohio confirmed in a news release this morning that it will file a modified electric security plan with the Public Utilities Commission of Ohio later today, as AEP Ohio had previously indicated.

The filing was not immediately available. Below is AEP's news release regarding the filing:

AEP Ohio, a unit of American Electric Power (NYSE: AEP), will file a modified Electric Security Plan (ESP) for the period of June 2012 through May 2015 with the Public Utilities Commission of Ohio (PUCO) later today. The plan, as proposed, addresses rate increase concerns affecting certain AEP Ohio customers and provides a reasonable transition to full retail competition in Ohio.

"We heard our customers' concerns and developed a plan that mitigates the significant rate increases affecting customers with unique usage characteristics including schools, churches and some small businesses, while providing moderate adjustments for all customers," said Pablo Vegas, incoming president and chief operating officer for AEP Ohio. "Our plan continues to support and promote retail electricity competition in Ohio and provides a reasonable transition to a fully competitive market in the state."

AEP Ohio notified the PUCO March 6 of its intention to file a modified ESP by March 30 following the commission's rejection of the company's stipulated agreement Feb. 23.

The modified plan will result in rate increases on average of approximately 5 percent for all customers beginning in June. Components of the filing include freezing charges on a customer's bill related to the operation and maintenance of AEP Ohio's generation facilities, excluding fuel costs; recovering deferred fuel expenses beginning in June 2013, a year later than originally authorized by the Commission; implementing a Retail Stability Rider to provide financial stability for AEP Ohio during the ESP period; and continuing a mechanism to recover distribution-related expenses, as previously included in the settlement agreement. The plan also offers competitive suppliers two tiers of discounted prices for use of AEP's generating facilities throughout the three-year term of the ESP. The prices are proposed at levels that are known to allow suppliers to make competitive offers to customers.

If the PUCO approves the modified plan as proposed, a typical residential customer using 1,000 kilowatthours (kWh) per month would see a monthly increase of approximately $7.40 (roughly 5 percent) for customers in the Columbus Southern Power (CSP) rate zone and $6.24 for customers in Ohio Power's rate zone in 2012. Small businesses in the CSP rate zone with 1,000 kWh demand and 100,000 kWh usage would see an approximate 2 percent increase in their monthly electric bill. Small businesses in the Ohio Power rate zone with the same usage patterns would see a 5 percent increase.

The increases are associated with: 1) distribution investments to maintain and improve service reliability for customers made since the company's last distribution base rate cases nearly 20 years ago; and, 2) deep discounts AEP Ohio is providing to competitive suppliers. Customers are encouraged to go to www.aepohio.com/go/ESP to see how the proposed rate plan will impact their monthly bill. A summary of the key components of the filing will be available at www.aep.com/investors once the filing has been made.

"AEP continues to embrace Ohio's decision to move to electricity competition provided that there is a reasonable transition," said Nicholas K. Akins, AEP president and chief executive officer. "This plan provides reasonable and stable rates for customers, allows for an appropriate transition to a fully competitive electricity generation environment, while at the same time providing financial stability and certainty for the company, and provides for the corporate separation of our Ohio assets."