AEP Ohio to Return Customers Reaching Arrears Threshold to Default Service

AEP Ohio notified several retail suppliers in May that it would begin returning to standard service any shopping customer who is in arrears by $50 for a period of more than 60 days.

The Retail Energy Supply Association, in supplemental testimony in AEP Ohio's electric security plan proceeding, said that AEP Ohio also indicated that customers would not be allowed to select another CRES [competitive retail electric service] provider until the past due amounts are paid.

Though AEP Ohio's tariff has contained for some time a provision allowing AEP Ohio to return to standard service any customer which is in arrears, RESA said that, to its knowledge, AEP Ohio's practice has not been to return such customers to default service.

RESA said that, "It is not uncommon for customers to miss a monthly payment deadline or to have an unpaid or underpay monthly invoice. Thus, this shift in practice could result in a great number of customers, particularly those residential customers who are most at risk financially, being involuntarily switched from shopping to standard service."

"Further, such a switch could trigger the 12 month minimum stay provision for the larger customers and the seasonal minimum stay for residential customers," RESA said.

"Customers, particularly those who are struggling financially, may find themselves shifted from the lower shopping rate they secured to higher standard service rates," RESA said.

Moreover, RESA said that this policy also casts doubt on migration forecasts offered by AEP Ohio in support of its electric security plan (including its sought above-market price on capacity).

"It also puts into question [AEP witness] Mr. Allen's projected switching rates of 65% residential, 80% commercial and 90% industrial which was based in part on observations from shopping migration in the Duke Energy Ohio service area. Duke does not have such a practice of returning customers to standard service. In Duke, customers who are in arrears can stay with their lower cost CRES supplier. Further, since Duke purchases the receivables CRES suppliers are not likely to drop the financially troubled customer," RESA said.