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FirstEnergy, AEP spar in wake of Ohio energy deregulation

As the effects of deregulation take root in Ohio, American Electric Power Co. and FirstEnergy Corp. have entered into a battle to sell power to commercial, industrial and residential customers throughout the state, with billions of dollars in sales at stake.

Energy Deregulation News reports that both companies, regarded as powerhouses in Ohio, have historically been said to manipulate the Public Utilities Commission of Ohio (PUCO) and the General Assembly to remain favorable to the companies when it comes to setting business electricity rates throughout the state.

However, since deregulation, the two companies have taken their gripes to PUCO, both alleging the other is encroaching on their territory.

According to The Columbus Dispatch, AEP recently went before PUCO asking for a rate increase that exceeds levels set by state law. The PUCO testimony concluded that the plan proposed by AEP would be more expensive than an electricity rate determined by market prices – clashing with a provision in Ohio law.

FirstEnergy president Anthony Alexander said AEP's plan would "severely limit" savings among customers.

"AEP wants to restrict shopping in its territory by imposing above-market capacity charges on competitive suppliers," Alexander told analysts on a conference call. "These charges would severely limit the savings customers in the AEP territory … would otherwise achieve from competitive markets."

The charges that are set by AEP would in turn affect retail electricity prices supplied by electric providers.