AEP looks to push costs onto retail electricity providers

After Ohio regulators changed their minds on American Electric Power's proposed electricity rates, the utility company has asked the state to raise the fees charged to customers who switch electricity providers, according to The Columbus Dispatch.

As a utility, AEP Ohio controls the wires that transmit electricity to customers, and the company charges retail electricity providers for the privilege of using those wires. The rate was set at its current level of $110 per megawatt-day by an inter-state auction, but AEP wants to more than double that rate to $255 per megawatt-day, which works out to electricity rates that are 1.6 cent per kilowatt-hour higher.

AEP argues that without this charge, or the higher electricity prices put forward in its original rate plan, the company could face serious financial difficulties.

"We feel these proposed interim solutions give the commission alternatives to dealing with the capacity issue fairly and without prejudice until the proceeding can be resolved," Joseph Hamrock, president and chief operating officer of AEP Ohio, said in a statement.

The Public Utilities Commission of Ohio notes that the two utility companies owned by AEP Ohio, Columbus Southern Power Company and Ohio Power Company, are the two utilities with the lowest proportion of customers switching electricity providers.