COLUMBUS, Ohio — AEP Ohio warned customers that they should prepare for a rate increase – as high as 28 percent - on their utility bills beginning in June.
The average customer using 1,000 kilowatt-hours of energy each month can expect their bill to increase 28% from about $155 a month to $198 a month.
On a post to its website, AEP said the increase is “largely due to the results of recent auctions for the generation supply portion of your electric bill.”
The company’s website went on to explain what prompted the increase:
“…Energy supply companies submit bids in the auction for the ability to supply energy to AEP Ohio customers for a specified period of time at the lowest price possible. This generation supply component is called the Standard Service Offer (SSO) and these procurement costs are external to AEP Ohio and beyond its control. Customers may also choose to receive their generation supply from a Competitive Retail Electric Service (CRES) provider.
During the most recent auctions, held in November 2022 and March 2023, the cost of procuring generation supply increased significantly and AEP Ohio is required to pass these costs along to customers. Global demand, global supply chain issues, economic uncertainty, and the continued war in Ukraine have had an impact on the cost to produce electricity. The results of these two auctions are blended to create the new rate.
Due to these rising costs, a typical residential customer using 1,000 kilowatt-hours of energy each month can expect their total bill to increase about 28% from today's typical bill of about $155 to about $198. These rates will be in effect until May 2024.”
When asked for an interview regarding this increase, an AEP spokesperson referred 10 Investigates to a press release which blamed the increase in part on higher energy use and higher generation supply prices.
The state’s Public Utility Commission approved this increase.
The increase comes at a time when AEP has faced criticism for customer relations following a controlled blackout last summer.
During the June incident, AEP cut power to thousands of customers in order to shed some of the load on the grid.
At the time, AEP said that storm damage to its infrastructure - combined with high temperatures – forced the utility company to act in order to avoid a longer, more prolonged blackouts.
The net result left customers upset and without power for days, in some areas, including parts of Clintonville.
10 Investigates returned to that area Friday to ask customers for their reaction about the increase. Most said they were unaware but weren’t happy to learn the news.
“I think it’s ridiculous that profitability of these organizations is built on the back of the consumer,” said Douglas Frank.
A PUCO spokesman said the increase will affect those with default rates. However, other “customers enrolled directly with a retail supplier or enrolled through their local government’s aggregation program will be unimpacted by this change.”
The spokesman also pointed out that “customers can explore energy choice options and enroll with a competitive supplier if they wish. The PUCO maintains its Energy Choice Ohio website at www.energychoice.ohio.gov to assist consumers in comparing offers, and tips to ensure they are asking the right questions before signing up with a competitive supplier.
The spokesman also provided a link to a presentation from PUCO’s technical staff last May “discussing the impacts on the energy markets and how they are impacting prices https://www.youtube.com/watch?v=xOhdpNfpKR0&t=1215s.”
10 Investigates found that this rate hike increase is happening at a time when AEP has increased its quarterly dividends for shareholders up to 83 cents per share. With 514 million shares, that provides returns to shareholders of $1.7 billion.
AEP has not responded to follow-up questions as of news time.
To learn more about the increase and find ways to save on your bill, click here.