COLUMBUS, Ohio, Feb. 28, 2011 -- AEP Ohio, a unit of American Electric Power (NYSE: AEP), today filed a request for an increase in its distribution rates with the Public Utilities Commission of Ohio (PUCO). The company proposes that the rates become effective in 2012.

This request seeks to bring rates in line with the current investment and costs necessary to provide safe, reliable distribution service to customers. It has been nearly two decades since the AEP Ohio companies filed rate cases in which distribution cost of service rates were considered for their respective service areas (Columbus Southern Power – 1991, Ohio Power – 1994).The filing focuses on infrastructure investment, expansion of new technologies, such as the gridSMART® program, and continuation of reliability improvements that have proved successful in recent years.

The filing reflects AEP Ohio’s proposed merger of Columbus Southern Power (CSP) and Ohio Power (OPCo) through a single set of rates for all AEP Ohio customers. For the average CSP residential customer using 1,000 kilowatthours (kWh) per month, approval of the plan would result in a decrease in a customer’s total monthly bill of approximately $1.59 or 1.35 percent in 2012. For the average OPCo residential customer using 1,000 kWh per month, approval of the plan would result in an increase in a customer’s total monthly bill of approximately $4.38 or 4.05 percent in 2012.

“It is vitally important to maintain adequate investment in the distribution infrastructure,” said Joe Hamrock, AEP Ohio president and chief operating officer. “Current rates date back to the early 1990’s, and through continuous improvement we have managed to keep costs in line with those rates. This proposal will provide for ongoing investment to support customers’ expectations of reliable service at a reasonable cost.” Components of the filing include items such as:
• Targeted investments to provide capital funding for distribution asset management programs, distribution capacity and infrastructure additions driven by customer demand. The company must support the addition of new customers and increased demand for electricity in the past 20 years by an enhanced level of infrastructure investment.
• The continued implementation of advanced technology that provides customers greater control over energy usage, improved meter reading accuracy, fewer outages and shorter outage durations.
• Maintaining the advanced levels of vegetation management that have proved successful in enhancing reliability for customers. The company currently is at the midpoint of conversion to a four year cycle-based vegetation management program that it expects to complete at the end of 2013. This increased emphasis on vegetation management reduces tree-related power outages.
• Proposed recovery of deferred assets. Since the last base distribution rate cases, the companies have deferred certain costs as regulatory assets for future recovery. AEP Ohio is proposing to amortize and begin recovery of these assets through a rider over a seven-year period beginning in 2013.

Last month, AEP Ohio filed its Electric Security Plan (ESP) for the period 2012-2014. The ESP is a comprehensive plan that proposes limited customer bill increases on generation rates, while encouraging investment in electrical infrastructure and consumer programs within the state of Ohio. The plan provides continued support of programs to assist low-income customers with their electric bills, adds renewable energy sources to the company’s generation mix, continues energy efficiency efforts and gives consumers an option to directly purchase a portion of their electricity from renewable sources, among other items. The Company’s ESP filing included some distribution components that are also proposed in the distribution rate case. In any case, these components are only meant to be approved once, and will not result in any duplicative cost recovery.

The Company anticipates that the PUCO will deliver an opinion and order on the distribution rate case in the fourth quarter of 2011.

AEP Ohio provides electricity to nearly 1.5 million customers of major AEP subsidiaries Columbus Southern Power Company and Ohio Power Company in Ohio, and Wheeling Power Company in the northern panhandle of West Virginia. AEP Ohio is based in Gahanna, Ohio, and is a unit of American Electric Power. News and information about AEP Ohio can be found at aepohio.com.

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.

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