PUCO adopts agreement to implement reduced AEP
Ohio rates as result of TCJA
AEP Ohio reduces rates by $607 million
COLUMBUS, OHIO (Oct. 3, 2018) – The
Public Utilities Commission of Ohio (PUCO) today adopted a settlement agreement
to reflect the Tax Cuts and Jobs Act (TCJA) of 2017 into AEP Ohio’s rates. With
today’s approval, AEP Ohio’s rates will reflect approximately $607 million in
rate reductions.
“The Commission is pleased to
approve an agreement that credits AEP Ohio’s customers with the utility’s
reduced tax obligation,” stated PUCO Asim Z. Haque. “AEP Ohio’s rates now credit
customers with hundreds of millions of dollars to accurately reflect the
utility’s reduced tax obligation to the federal government.”
Specifically, AEP Ohio will return
to customers normalized accumulated deferred income tax (ADIT) balance of
approximately $278 million over a federally prescribed time period of
approximately 25 years.
AEP Ohio will credit customers
non-normalized excess deferred income tax (EDIT), estimated by the utility to
be approximately $177.6 million, over approximately a six year period.
Additionally, AEP Ohio will also make
annualized credits of $20.4 million until new base distribution rates become
effective as a result of the rate case expected to be filed in June 2020.
The Commission has previously
approved $66 million in rate reductions of various AEP Ohio riders.
AEP Ohio estimates the average
residential customer using 1,000 kWh a month will see a $3.65 reduction in
their monthly bill.
Background
On Sept. 26, 2018, AEP Ohio, PUCO
staff, and seven other parties filed a settlement agreement outlining how AEP
Ohio will reconcile its rates to reflect changes in the federal tax code.
On April 25, 2018, the Commission
denied legal arguments jointly filed by Ohio’s electric distribution utilities
challenging the PUCO’s January order directing utilities to set aside money in
excess of the reduced corporate tax rate during the pendency of the
Commission’s investigation.
On Jan. 10, 2018, the Commission
ordered an investigation to study the impacts of the TCJA on PUCO-regulated
utilities and how best to pass on the benefits to customers, and directed utilities
to set aside money in excess of the reduced tax rate to later be returned to
customers.
The TCJA was signed into law on
Dec. 22, 2017, which among other things, reduced the federal corporate income
tax rate from 35 to 21 percent, effective Jan. 1, 2018.
A copies of today’s decision is
available on the PUCO website www.PUCO.ohio.gov. Click on the link
to Docketing Information System and enter the case number in the search box.
-30-
18-1007-EL-UNC
18-1451-EL-ATA
The Public Utilities Commission of Ohio (PUCO) is the sole agency charged with regulating public utility service. The role of the PUCO is to assure all residential, business and industrial consumers have access to adequate, safe and reliable utility services at fair prices while facilitating an environment that provides competitive choices. Consumers with utility-related questions or concerns can call the PUCO Call Center at (800) 686-PUCO (7826) and speak with a representative.
For additional information, contact: Matt Schilling | (614) 466-7750
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