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Q. Why should customers pay for AEP Ohio’s repairs caused by the June 29th storm?

by on July 12, 2012

A. We set aside millions of dollars each year to repair equipment and facilities and to restore power after normal storms we expect to see.  Essentially, we’re self-insured against normal storms.

The super derecho on June 29 was an unprecedented storm in AEP Ohio’s history. Winds speeds were clocked at 85 miles per hour in some places — 10 miles per hour faster than the damaging winds of Hurricane Ike. About 660,000 customers lost power after the June storm, compared with 650,000 after Ike in 2008.

We may seek to recover storm costs from the Public Utilities Commission of Ohio (PUCO), which regulates how utilities operate in our state. Extraordinary costs from such storms are not automatically included in customers’ rates. The PUCO must carefully review all of our costs and determine what will be repaid. Remember, our total cost for repairs and power restoration is not a bill that will be automatically paid by our customers.

By comparison, repairs and restoration after Hurricane Ike cost us $42 million, including costs not considered for recovery. The PUCO is allowing us to recover $28 million over seven years through customer rates for Ike. Customers’ bills increased by a couple of dollars per month starting this year.

Most industries seek recovery of the costs of natural disasters through a variety of means. The electric utility industry is transparent in how we recover our expenses.

Recovering costs associated with such catastrophic disasters is part of doing business. For example, your rates for homeowner’s insurance may go up whether or not you’ve submitted a claim. An insurance company may raise rates to cover the costs of claims submitted by your neighbors.

11 Comments
  1. josue urena permalink

    AEP = biggest joke in america

  2. j m noble permalink

    Could you please comment on why you feel the need to seek to recover any portion of the repair costs from your customers if you are reporting $1.9 billion in PROFIT on an annual basis…the total cost at $50,000,000 is less than 3% of your annual PROFIT. Or please offer substantial evidence that absorbing this expense will seriously impede your ability to contiue operating at a significant profit

  3. John Young permalink

    I think AEP and South Central NEED to rework out horrific infrastructure. There’s no reason for power outages of this magnitude in this day and age. Fix your system first, why should we pay for your horrible 1950’s power system? And exactly, what am I paying for really?

  4. M. Biship permalink

    With a reported profit of $1.9 billion and the following salaries AEP can more than cover the cost of this storm.

    Executive Profile*
    Michael G. Morris
    Non-Executive Chairman, Chairman of Executive Committee, Chairman of Policy Committee, President of American Electric Power Service Corporation, Chairman of American Electric Power Service Corporation, Chairman of Appalachian Power Company, Chairman of Ohio Power Company and Chairman of Southwestern Electric Power Company, American Electric Power Co., Inc.

    Age Total Calculated Compensation This person is connected to 191 board members in 16 different organizations across 27 different industries.

    See Board Relationships
    66 $9,186,906
    As of Fiscal Year 2011

    Nicholas K. Akins
    Chief Executive Officer, President, Director, Member of Executive Committee and Member of Policy Committee, American Electric Power Co., Inc.

    Age Total Calculated Compensation This person is connected to 90 board members in 13 different organizations across 15 different industries.

    See Board Relationships
    52 $2,807,802
    As of Fiscal Year 2011

    A little preventive maintenance in the future may help keep the cost of storms down. The last several years it looks as if AEP’s maintenance program is “LET GO TILL SHE BLOWS”
    The little guys are getting tired of being walked on by the big guys!

  5. YEM permalink

    1.9 billion in profits last year and your company finds it necessary to recover money from the customer. Explain to us the rational behind that? The PUCO and AEP are a complete joke. It sickens and angers me so bad that we the consumer suffer so much from corporate greed and politics.

  6. Ernie McDowell permalink

    I try to tell people that AEP is a corporate monster and the cheerleaders come out to bash me…Look what’s going on now….They make a billion dollars,which is a 700,000,000 increase in profit from a year ago,and still want to gouge us for a few dollars more….CROOKS.

  7. AEP is censoring these comments…AWFUL.

    • AEP Ohio permalink

      Hi Ernie, this blog is moderated, meaning we review comments before they are posted. We do present opposing viewpoints. We want to have a conversation with you. We encourage you to respond to our bloggers and the comments of other individuals. We also have commenting guidelines. See: https://aepohioanswers.com/about/. ^CS

  8. AEP will not fix damage to my electrical system on my side of the meter because “It is not theirs to maintain or repair”…Guess what…The stuff on AEPs side of the meter is NOT mine to maintain or repair…..

  9. Chris Williams permalink

    SO WHY WONT AEP COMMENT ABOUT THE PROFIT MARGIN VS STORM DAMAGE COST?

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  1. Petition Against AEP Charging Customers for Blackout Has Surfaced! | Power 107.5

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