PUCO set to hold public hearings on American Electric Power Ohio’s rate increase application

With increasing energy prices taking center stage in the national conversation, the Public Utilities Commission of Ohio is holding a series of public hearings regarding American Electric Power Ohio’s application to increase distribution rates.

On May 30, AEP Ohio filed an application to increase rates and charges for electric distribution service. On its website, AEP Ohio said it last filed a base rate case in 2020 and has spent more than $2 billion to update and improve its distribution system.

According to Politico’s E&E News, executives at AEP Ohio’s parent company, American Electric Power, said the company plans to increase capital spending by nearly 30% over the next five years as it prepares for a surge in data center power generation.

“The base rate increase is needed to ensure we can continue to support, maintain and upgrade the system through new investments; respond to demands on the system because of growth; and to repair or update aging infrastructure,” AEP Ohio said on its website.

As proposed, a residential customer who uses 1,000 kWh a month would see a 2.14% increase, or $3.95 per month. However, the precise increase depends on the PUCO case.

PUCO said its staff recommended a decrease that would lower bills by 0.8% or $1.47.

“We understand that a rate increase — no matter the amount — is never welcome news,” AEP Ohio said in an email sent to customers, WCMH-TV previously reported. “We also recognize that rising inflation and increased costs for many household essentials have put a strain on some customers. AEP Ohio has several resources available, from payment arrangements and extensions to tools to manage energy usage to guidance about government programs to assist with bills.”

Unsurprisingly, the move was met by opposition from the Office of the Ohio Consumers’ Counsel.

“At this time, it is unknown how much AEP Ohio will seek to increase rates to consumers,” the Office of the Ohio Consumers’ Counsel said in an April 24 filing. “However, what is known is that consumers are already struggling to keep up with their utility bills.

“AEP Ohio had 177,221 disconnections during the 2023 – 2024 reporting period,” the office added. “AEP Ohio also recently filed an application to increase its charges to consumers for its Standard Service Offer by 36% to account for large increases in 2 capacity charges. AEP Ohio’s latest request to increase rates could adversely impact AEP Ohio’s residential consumers and cause even more disconnections.”

Last month, AEP Ohio reported third-quarter earnings of $972 million, up from $960 million during the third quarter of 2024.

AES Ohio Files Multi-Year Reliability Plan

Meanwhile, AES Ohio, which serves roughly 520,000 customers in west central Ohio and is formerly known as Dayton Power & Light, has filed a multi-year reliability plan for 2027, 2028, and 2029, which it said will allow it to comply with House Bill 15.

“Residential consumers are being gutted by AES Ohio’s and other utilities’ rate increases,” the Office of the Ohio Consumers’ Counsel said in a PUCO filing. “Residential consumers get no waivers from the utility rate increases the PUCO approves. AES Ohio should get no waivers from filing on the record the necessary information to support its application to increase rates now.”

AES Ohio Distribution Rate Case Settled

Separately, this week, PUCO said it accepted a settlement agreement in an AES Ohio distribution rate case. The August settlement agreement was unopposed.

As part of the deal, AES Ohio can file rates that will result in a total increase in base distribution rates of $168 million annually, less than the $235 million AES Ohio requested in its application. The settlement keeps the $9.75 customer charge, removes reconnection fees, and offers more than $1 million in shareholder-funded assistance with bill payments annually.

“This is with covering costs from 2020 to 2024, and there were significant weather events and substantial investments to our distribution infrastructure,” Mary Ann Kabel, director of corporate communications for AES Ohio, told WDTN-TV. “This … paves the path for us to continue to move forward and make those strategic investments.”