Public Service Company of Oklahoma (PSO), a subsidiary of American Electric Power (NYSE: AEP), announced today that it has significantly lowered the fuel charge on customer bills.
 
The fuel adjustment will result in an 18 percent reduction overall on the bill of a residential customer who uses 1,000 kilowatt hours of electricity each month.   The change in the fuel factor will be applied to December customer bills.  
 
The fuel cost reduction, which results from falling natural gas prices, will substantially decrease customer electric bills and more than offset the proposed PSO non-fuel rate increase request under consideration at the Oklahoma Corporation Commission. Hearings on that rate case proposal start Dec. 8.
 
“The fuel cost reduction is real good news for our customers in today’s challenging economy,” said Stuart Solomon, PSO president and chief operating officer. “The majority of our fuel costs are based on the price of natural gas. The significant decline in natural gas prices over the past few months made it possible for us to adjust down the fuel portion of customers´ bills.  The fuel decrease is also helpful because it will more than offset the proposed increase in non-fuel, operational rates that we requested this past summer.” 
 
PSO adjusts the fuel portion of customer bills once per year in June, unless fuel costs change dramatically during the course of the year.  When that happens, an adjustment to fuel factors is made. PSO monitors fuel costs each month to determine whether such an adjustment is appropriate.
 
PSO doesn’t make any profit or markup on fuel costs; customers only pay the actual costs of fuel.
 
Because of rapidly rising natural gas prices earlier this year, PSO was more than $100 million under-recovered on fuel costs in July 2008. As gas prices have declined over the past few months, that under-recovery balance has been worked off, making it possible for PSO to now lower customer fuel charges.
 
PSO, a unit of American Electric Power (NYSE: AEP), is an electric utility company serving approximately 525,000 customers in eastern and southwestern Oklahoma.  Based in Tulsa, PSO has 4,400 megawatts of generating capacity, and is the largest provider of wind energy in the state.  News releases and other information about PSO can be found on the World Wide Web at PSOklahoma.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.