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Q. What are these “riders” on my electric bill?

by on October 5, 2012

A. Riders are temporary charges approved by the Public Utilities Commission of Ohio. The PUCO approved two such riders in AEP Ohio modified ESP case.

The Phase-In Recovery Rider is related to recovery of past fuel costs. The actual cost of fuel to generate electricity is passed directly to customers so there’s no profit.

To minimize the impact on customers’ bills, the commission the Commission set caps on bill increases between 2009 and 2011.  It ordered us to defer cost incurred above those caps for later recovery.  Beginning in September, The Commission said we could collect the deferred fuel costs over a seven-year period.

If you’re a residential customer who lives in the Columbus Southern Power rate zone and your household uses 1,000 kilowatt-hours each month, you’ll see a 7-cent increase or about a 0.1 percent on your total bill.

If you’re a residential customer who lives in the Ohio Power rate zone and your household uses 1,000 kilowatt-hours each month, you’ll see an increase of $4.22 or 3.7 percent.

Why are customers in the Ohio Power rate zone facing a bigger increase than those in Columbus Southern Power? More fuel was used to generate electricity for customers of the former Ohio Power Company than the Columbus Southern Power rate zone. Because bill increases were capped, more fuel charges were deferred for the Ohio Power Company rate zone.

The Retail Stability Rider was approved by the Commission in August in recognition for AEP Ohio providing substantial discounts to generation suppliers and to give us a fair transition to a competitive market.

Our plan sets a pricing structure for competitive suppliers to purchase generation capacity from AEP Ohio to serve electric customers. This pricing is 89 percent below our state-approved costs. The rider allows for recovery of some costs associated with serving customers, a critical element in sustaining the health of Ohio’s energy economy and stemming job loses.

Generation rates, in turn, will be frozen through May 31, 2015.

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