American Electric Power is asking for permission to make customers pick up the tab for repairs resulting from a series of storms this past June and July. The $61.8 million reimbursement request, filed with the Public Utilities Commission of Ohio, is likely the largest of its type ever filed in Ohio, regulators said.
American Electric Power is asking for permission to make customers pick up the tab for repairs resulting from a series of storms this past June and July.
The $61.8 million reimbursement request, filed with the Public Utilities Commission of Ohio, is likely the largest of its type ever filed in Ohio, regulators said.
It would cost about $3 per month for a typical household, which works out to about a 2 percent rate increase. The payments would last for a year.
AEP’s system suffered mass power failures because of the June 29 storm, a weather system that downed trees, snapped power poles and turned bits of debris into projectiles. Nearly half of the company’s 1.5 million Ohio customers lost power, some for more than a week.
“These are costs that are above and beyond what we would normally spend, and this was a storm that was unexpected and large-scale,” said Terri Flora, an AEP spokeswoman.
Many consumers object to the idea of paying extra for repairs after already enduring prolonged loss of service, but it is a common practice for utilities to cover costs in this way.
“There is not a utility in this country that does not (go to customers) to recover costs for large-scale storms,” Flora said. “We recognize that customers were inconvenienced during the storm, but the work we did was helpful in maintaining our system, and the customer gets the benefit.”
AEP’s power-delivery system — which includes the lines, poles and related equipment — is regulated in a way that puts a limit on profit, but also allows the company to be reimbursed when extraordinary events lead to certain types of expenses.
AEP’s complement of power plants, which must compete on the open market, cannot be similarly reimbursed.
The larger issue, according to one customer, is that AEP has done a lousy job of maintaining its system.
“I feel like thinking ahead and planning for disaster is important,” said Paula Deming of Worthington, whose house lost power for eight days in July.
Her neighborhood is one of many in central Ohio whose residents say their electricity service is unreliable, regardless of weather conditions.
AEP says that the storm was so severe, with winds exceeding 80 mph, that no system could withstand it and no amount of planning could prepare for it.
The $61.8 million, requested in a filing late last month, includes damage from the June 29 storm plus thunderstorms that hit on July 18 and July 26. For each event, the company submitted evidence that the costs qualify for repayment under Ohio rules. The most expensive part was wages and accommodations for workers from other companies, who came to the area to help with power restoration. That cost was $58.3 million.
Before this request, the most costly recent storm occurred in 2008, when the remnants of Hurricane Ike led to about $30 million worth of repairs that AEP later recovered through electricity rates.
This month, AEP’s rate in central Ohio leads to a bill of $132.68 for a household using 1,000 kilowatt-hours. As proposed, the storm damage fee would add $3.02 to the total.
The damage claim is likely the largest ever filed by an Ohio utility. Jason Gilham, a PUCO spokesman, said the agency’s staff does not know of any previous example that exceeds this one, or even comes close. He said this underscores the storm’s destructiveness and the high costs of recovery when the damage is on such a large scale.
The PUCO will review the plan and take testimony from other interested parties. A ruling isn’t expected until spring, at the earliest.