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Guest column/AEP’s electric security plan good for Ohioans

December 11, 2011
By JOE HAMROCK , The Herald-Star

More than a decade ago, state government changed the electric utility system in Ohio to enable customers to choose their electric supplier. This change replaced a cost-based, single supplier model that had been in place for years with a system intended to attract multiple suppliers to compete in a market for customers' business. State law changed twice to reflect that desire and over the past 10 years the state's investor-owned electric utilities have been transitioning toward that model.

AEP Ohio currently has an electric security plan before the Public Utilities Commission of Ohio that will transition the company over the next few years from the cost-based model it has operated in for nearly a century to a market-based system that will ultimately utilize competitively sourced power generation supplies for all AEP Ohio customers. This plan represents a settlement agreement among the company, more than 20 stakeholder groups and the PUCO staff. The plan is a balanced approach into a new environment for the company and our customers that will support alternative and advanced energy development, the needs of low-income customers and help businesses create new Ohio jobs. In addition, it supports shale gas development, governmental aggregation and investment in the reliability of the company's distribution system.

How do customers benefit? AEP Ohio's ESP provides a direct path to competitive market-based electricity rates for all of the company's customers. For several years now, AEP Ohio customers have had the opportunity to choose the supplier of their electricity generation, but the company's low rates have generally been more favorable than market pricing. As the company transitions to the market-based electricity pricing, customers will have increasing opportunities to manage their energy costs through an expanded selection of electricity generation providers.

For decades, AEP Ohio has been proud to provide our customers some of the lowest rates in the state and nation. Our plan will continue to deliver price stability for all customer groups - residential, commercial and industrial during the transition to market-based rates, while further enhancing customers' ability to shop for a better deal on their electricity generation rates.

PUCO commissioners are currently reviewing AEP Ohio's ESP including testimonies and supporting documents of various groups involved in the process. AEP Ohio's plan is supported by a broad range of consumer groups, competitive suppliers, and environmental advocacy groups. It is a plan that closely aligns with Duke Ohio's recently approved ESP. Once approved by the PUCO commissioners, the plan will provide many benefits to Ohio consumers and the state.

(Hamrock, a native of Mingo Junction, is president and chief operating officer of AEP Ohio)

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