Court rejects PUCO approval of American Electric rate plan

DAYTON, OHIO - The Ohio Supreme Court struck down the Public Utilities Commission of Ohio's approval of a rate plan for American Electric Power Co., which serves customers in Columbus, Canton and other parts of the state.

The court upheld arguments by the Ohio Consumers' Counsel, which contended the PUCO failed to follow Ohio's electric choice law that requires that energy prices be set by a competitive market. The case now goes back to the PUCO in Columbus.

American Electric Power, which serves nearly 1.5 million customers through its Ohio Power and Columbus Southern Power subsidiaries, said it is considering whether to ask the court to reconsider its ruling. The existing electric rates will remain in effect and the company will participate in any new proceedings before the PUCO, company spokesman Doug Flowers said.

Consumers' Counsel Janine Migden-Ostrander praised the ruling. She said she hopes the PUCO will review the entire AEP rate plan, including a series of rate increases imposed on customers from this year through 2008.

Her office represents residential utility customers statewide. It has been challenging so-called rate stabilization plans the PUCO has approved for major utilities statewide, including one that grants Dayton Power and Light Co. rate increases through the end of 2010.

Ohio's deregulation of electricity markets in 2001 was intended to encourage competition with established utilities for customers' business, but the process has lagged as would-be competitors have been unable to devise plans to undercut existing utilities' rates and still make a profit.

Ohio utilities say their rate stabilization plans allow gradual rate increases and protect customers against a major increase they could see all at once if there was an immediate switch to market- based rates for electric service.