Settlement Would Set Level For AEP Texas Hurricane Restoration Costs To Be Collected From Retail Providers

A settlement among various parties filed with the Public Utility Commission of Texas would establish the level of AEP Texas's system restoration costs, incurred in connection with Hurricane Harvey and other previous weather-related events within the Central Division of its service area, that are recoverable

The settlement would establish the recoverable distribution-related system restoration costs as approximately $261 million, and the recoverable distribution-related system restoration costs as about $107 million. Such costs shall be allocated to the Central Division only

The settlement does not address cost recovery of such costs, as AEP Texas said in its initial application that cost recovery would be addressed in a separate proceeding.

However, in its initial application, AEP Texas did state that, for distribution-related system restoration costs, the company proposes to obtain a Commission order to support securitization of the Commission-approved amount in a separate proceeding. The revenue necessary to service the securitization bonds will be recovered from Retail Electric Providers (REPs) through a separate charge added to the Tariff for Retail Delivery Service.

In an August 2018 news release, AEP had said that its subsequent filing, seeking actual recovery of the distribution-related costs, will likely be filed early 2019

If insurance proceeds ultimately received by AEP Texas in connection with Hurricane Harvey ultimately exceed, or fall short of, the amounts listed in the settlement, then, depending on when the actual proceeds are known, that shortfall or excess shall be used to adjust the amount of system restoration costs included in future AEP Texas interim TCOS updates or base rates.

Settling parties include AEP Texas, PUCT Staff, and certain cities with original jurisdiction. TIEC is unopposed to the settlement term sheet

Docket 48577