Public Service Company of Oklahoma (PSO), a subsidiary of American Electric Power (NYSE: AEP), on August 14 filed a proposal at the Oklahoma Corporation Commission (OCC) to recover costs related to recent investments the Company has made to provide reliable service to Oklahoma customers. These investments are already in place and providing electric service.
The proposal would create a “rider” recovery mechanism that provides for a more streamlined recovery of investment costs than through traditional mechanisms. Only those investments directly associated with providing safe and reliable service to customers, such as poles, wire, switches, substations, transmission towers, and power plant equipment, would be included in the rider.
The new rider provides PSO the ability to continue to invest directly in its electric system to maintain or improve reliability, which directly benefits customers.
The net bill impact to residential customers on an annualized basis would amount to only a small increase due to the expiration of two other riders in the coming months (one will expire in the fall 2009, and the other will expire mid-year 2010). Specifically, the annualized net impacts of all three riders for residential customers using 1,000 kilowatt-hours per month would be about 90 cents per month by mid-year 2010. Additionally, the plan includes a proposal to exempt all qualified low-income customers.
The Commission will hold hearings and take evidence on the plan before PSO would begin to collect any revenues through the proposed rider. The Commission also will review the investment costs recovered under the rider in the Company’s next full rate proceeding. Any amounts collected through the rider are subject to refund, with interest.
The request filed today comes only after PSO made significant reductions in expenditures, in light of the economy, including reductions in capital expenditures, reductions in fleet vehicles, salary freezes, and other measures.
Over the past year, PSO has invested, on average, approximately $20 million per month – and approximately $1 billion in the last five years – on power plants and power line improvements to assure customers continue receiving high-quality, reliable electric service.
PSO, a unit of American Electric Power (NYSE: AEP), is an electric utility company serving approximately 527,000 customers in eastern and southwestern Oklahoma. Based in Tulsa, PSO has 4,405 megawatts of generating capacity, and is the largest provider of wind energy in the state.
American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP’s transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP’s headquarters are in Columbus, Ohio.