COLUMBUS, Ohio, May 8, 2000 – Electric competition in Ohio moved closer to reality today as American Electric Power (NYSE: AEP) announced that the company has reached a stipulated agreement with major parties regarding its transition plan filed Dec. 30, 1999, with the Public Utilities Commission of Ohio (PUCO).
AEP’s operating companies, Columbus Southern Power Company (CSP) and Ohio Power Company (OP), which combined serve nearly 1.3 million customers in Ohio, reached agreement with the PUCO Staff, the Ohio Consumers’ Counsel (OCC), Industrial Energy Users – Ohio, Ohio Manufacturers’ Association, National Energy Marketers Association, Ohio Rural Electric Cooperative, Inc., and Buckeye Power, Inc., Columbia Energy Power Marketing Corp. and Columbia Energy Services Corp., Exelon Energy, Strategic Energy, LLC, Mid-Atlantic Power Supply Association and Kroger Co.
“This agreement marks a significant milestone in the road to customer choice of electricity in Ohio,” said Henry Fayne, executive vice president – Financial Services of AEP. “It provides the best possible framework by giving the company the opportunity to recover its regulatory assets and by giving customers the needed ingredients for the development of a competitive electric market in Ohio. AEP’s strong commitment to develop a competitive electric market allowed us to settle with a variety of customer groups and a majority of future power marketers.”
Terms of the agreement, which focused on provisions to facilitate the development of the retail electric market, include:
The first 25 percent of CSP’s residential customers who switch will not be required to pay the generation component of current rates and will also receive a shopping incentive of 0.25 cents per kilowatt-hour. Any unused portion of the incentive will be used by AEP to reduce transition charges.
The first 20 percent of OP’s residential customers who switch after 2005 will be relieved of their obligation to pay transition charges for 2006 and 2007 – a savings of 0.25 cents per kilowatt-hour.
AEP will not request recovery of any potential stranded generation costs.
The notice period of commercial and industrial customers who choose to switch is reduced to 90 days.
AEP will work with the Alliance, the Midwest Independent System Operator (MISO), the Pennsylvania-New Jersey-Maryland (PJM) transmission organization and other regional transmission organizations (RTOs) to develop and implement specific proposals to address reciprocity and interface/seam issues regarding transmission. Further, AEP will transfer operational control of its transmission facilities to an operating FERC-approved RTO by Dec. 15, 2001. Until that time, the company will make available up to $10 million to offset transmission charges imposed by PJM and/or by the MISO for delivery of energy to its current Ohio customers who switch.
Transition charges will end by Dec. 31, 2007, for OP and by Dec. 31, 2008, for CSP, rather than in 2010 as originally requested.
AEP, a global energy company, is one of the United States’ largest investor-owned utilities, providing energy to 3 million customers in Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West Virginia. AEP has holdings in the United States, the United Kingdom, China and Australia. Wholly owned subsidiaries provide power engineering, energy consulting and energy management services around the world. The company is based in Columbus, Ohio.
For More Information, Contact:
Deb Strohmaier
Ohio Corporate Communications Manager
American Electric Power
614/223-1656