AES Ohio ordered to issue $11 million in customer refunds after excessive earnings finding
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Ohio utility regulators have ordered AES Ohio to issue more than $11 million in customer refunds after finding the utility had significantly excessive earnings in 2019.
The Public Utilities Commission of Ohio issued the order Wednesday, directing AES Ohio to refund $11,060,705 to customers through a one-time bill credit.
The order follows an Ohio Supreme Court decision that sent the case back to PUCO for a new review of AES Ohio’s 2018 and 2019 earnings. Regulators accepted a PUCO staff calculation finding AES Ohio earned a 15.61% return on equity in 2019, which the commission determined was excessive.
AES Ohio must file tariffs complying with the order by July 15 and issue the one-time credits in the next applicable billing cycle. Customers will also receive a bill insert explaining the refund.
The refund will be divided across customer classes based on utility revenues from 2018 and 2019. Residential customers will receive 62.70% of the refund, while commercial customers will receive 21.13%, industrial customers 8.68%, local governments 7.46% and railroads 0.02%.
Individual bill impacts were not immediately available. PUCO said the credits will appear as a one-time adjustment on customers’ monthly bills once the refund is processed.
The case dates back to proceedings involving Dayton Power and Light, now doing business as AES Ohio, and its electric security plan. Ohio law at the time required regulators to review whether utilities earned returns significantly above comparable companies.
PUCO originally found AES Ohio had $61.1 million in excessive earnings but did not require refunds after considering the company’s future capital investment commitments. The Ohio Supreme Court later ruled that the commission could not allow the utility to retain significantly excessive earnings based on future investments and ordered PUCO to conduct a new analysis.
On remand, regulators rejected competing proposals from both AES Ohio and the Ohio Consumers’ Counsel before adopting the PUCO staff calculation. AES Ohio argued for a smaller refund, while the Consumers’ Counsel sought more than $82 million, including interest.
The commission ultimately adopted the PUCO staff calculation, finding AES Ohio did not have significantly excessive earnings in 2018 but did in 2019.
The order comes as Ohio regulators and courts continue reviewing utility charges, refunds and customer costs in several high-profile cases. Ohio.News previously reported that AEP customers were set to receive credits after regulators curtailed a proposed rate increase, and the Ohio Supreme Court recently upheld PUCO’s decision in a separate AEP coal plant refund dispute.
The order is separate from the House Bill 6 corruption case involving FirstEnergy, though both cases have drawn attention to how Ohio regulators oversee utility charges and customer refunds.
PUCO said the refund must be applied in the next applicable billing cycle. AES Ohio must file updated tariffs by July 15 before issuing the credits during the next applicable billing cycle. Individual customer refund amounts have not yet been announced.
