PUCO Directs AEP Ohio to Adjust Retail Supplier Billings for Prior Capacity Costs

The Public Utilities Commission of Ohio has directed AEP Ohio to make any necessary adjustments to retail supplier billings, which occurred during an "interim" period of capacity pricing, in order to reflect a clarification from PUCO regarding the capacity rate applied to certain customers during this interim period.

The interim period capacity rate has a tortured history which will not be repeated here, but in essence, due to its interpretation of a series of PUCO orders, AEP Ohio had stated an intent to withdraw an allocation of RPM-priced capacity to certain commercial customers whose load exceeded a cap on RPM-priced capacity for that specific class, after PUCO ruled that unused RPM-priced capacity allocations could not be re-allocated among customer classes (AEP Ohio had initially served the over-subscribed commercial class with unused RPM-priced capacity allocations from the non-commercial classes).

The interim capacity period extended from March 7, 2012 to August 8, 2012.

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

In an order on rehearing issued yesterday, PUCO clarified that all customers that were shopping as of September 7, 2011, should have continued to receive RPM-based capacity pricing during the period in which the interim State Compensation Mechanism (SCM) was in effect.

"Pursuant to the terms of the ESP 2 Stipulation as approved by the Commission in the Initial ESP 2 Order, customers that were taking generation service from a CRES [competitive retail electric service] provider as of the date of the ESP 2 Stipulation (i.e., September 7, 2011) were to continue to be served under the RPM rate applicable for the remainder of the contract term, including renewals," PUCO said.

"In the Initial ESP 2 Clarification Entry, the Commission confirmed that it had modified the ESP 2 Stipulation to prohibit the allocation of RPM-based capacity pricing from one customer class to another and that this modification dated back to the initial allocation among the customer classes based on the September 7, 2011, data. This clarification was not intended to adversely impact customers already shopping as of September 7, 2011. Likewise, the Interim Relief Entry, which was subject to the clarifications in the Initial ESP 2 Clarification Entry, was not intended to discontinue RPM-based capacity pricing for customers shopping as of September 7, 2011," PUCO said.

"AEP-Ohio is directed to make any necessary adjustments to CRES billings that occurred during the interim period, consistent with this clarification," PUCO said.

PUCO denied all other substantive requests for rehearing of the capacity rate order.

A concurring and dissenting opinion from Commissioner Cheryl Roberto (click here, starting page 62) is a must-read for anyone in the Ohio retail market

Case: 10-2929-EL-UNC