COLUMBUS, Ohio, April 21, 2016 – Two decisions today from the Ohio Supreme Court upheld capacity cost charges for American Electric Power’s (NYSE: AEP) AEP Ohio utility unit, but rejected a part of AEP Ohio’s retail stability rider (RSR) competitive transition charge. The full impact of today’s decisions will be determined after remand to the Public Utilities Commission of Ohio (PUCO), but the company expects the net financial result will be minimal.

The Supreme Court decision rejecting a portion of AEP Ohio’s RSR requires the PUCO to decrease AEP Ohio’s capacity deferral balance. However, a separate decision also requires that the PUCO reconsider the energy credit used to reduce AEP Ohio’s capacity charges for that period. The company believes that recalculation of the energy credit in the remand proceeding will increase AEP Ohio’s capacity prices for that period and will be approximately equal to the reduction in the deferral balance, so that customers are not likely to see a significant net impact.
“We’re pleased that the Ohio Supreme Court agreed with us and the PUCO that a cost-based price was appropriate to recover the value of our Ohio generation capacity. Although the Supreme Court’s decision rejected one part of the retail stability rider, the Court found that the amount of the energy credit used to reduce our capacity costs was not appropriately determined,” said Nicholas K. Akins, AEP chairman, president and chief executive officer. “We believe that when we present information about our actual capacity costs in the remand proceedings, our cost-based price will increase and yield a small net impact when combined with the deferral reduction from the RSR decision.”

AEP Ohio expects the remand process to begin soon and a decision on the remand to be issued in the next several months.

21 April 2016