AEP Ohio’s Electric Security Plan

FAQS

Why is AEP Ohio filing an ESP stipulation?

Our current ESP expires next year and we need to get the new one in place to ensure a smooth transition. While we’ve already made significant improvements, more work needs to be done — and it must happen quickly as we plan for rapid economic growth, increased customer expectations and stronger storms that could impact the electric grid. The service we provide is essential and the investments enabled in this agreement will deliver benefits that better meet the needs of our customers.

What is the Electric Security Plan (ESP) stipulation?

The stipulation is a comprehensive, $1.5 billion plan to continue making reliability-focused improvements to the electric grid, support economic development, and create new programs that utilize technology for customers to manage their energy use and save money. AEP Ohio and several parties representing customers were able to agree to an ESP that balances affordability and providing the resources necessary to keep power flowing.

What will this do to my electric bill?

Under the ESP V term, which will run from June 2024 through May 2028, a typical residential customer using 1,000 kWh would see an average annual increase of less than 1% or $1.50 per month.

When will the new rates take effect?

Under the agreement, the ESP term will begin on June 1, 2024. The rates will take effect after June 1, 2024 and will be adjusted through rate update filings docketed with the PUCO.

Why is AEP Ohio trying to increase rates on the back of the base rate increase along with the economic turbulence?

Our current ESP expires next year and we need to get the new one in place to ensure a smooth transition. The ESP stipulation is necessary to make key investments to enhance and upgrade its service reliability, provide low-income energy efficiency programs, offer residential demand response credits, and continue investments to support Ohio’s economic development. Further, the stipulation is necessary to set a new auction schedule to procure generation used in the Standard Service Offer (SSO) rate.

What are you doing to improve reliability?

A primary focus of the ESP stipulation is to maintain and improve service reliability. This is mainly accomplished through the investments in vegetation management and upgrades in the distribution system.

The planned investment in vegetation management will allow us to continue the four-year trim cycle for trees inside the right-of-way. In addition, the plan will help us reduce outages caused by trees outside the right-of-way, which in 2021 was the leading contributor to outages.

Key investments into the distribution system are necessary to replace aging infrastructure and support customer growth.

How will this improve the resiliency of the grid?

Electric lines and hundreds of pieces of aging equipment across Ohio are targeted to be upgraded, replaced or rebuilt before they reach the end of their expected life. We’ve also identified circuits where customers have experienced multiple outages and will focus additional efforts on making improvements to their service. New lines and substations will be built to meet the evolving needs of AEP Ohio customers while at the same time supporting bringing new businesses to the state to grow the economy.

What are you doing to ensure this increase is affordable for customers?

The ESP stipulation includes energy efficiency programs for residential customers designed to reduce overall energy use and save power during peak demand.

Reducing energy use for all residential customers, including low-income customers not only reduces their bill, it helps reduce the energy demand placed on the electric grid. In addition to the High Efficiency for Low Income Program, AEP Ohio has proposed a supplemental program to support customers with incomes below 200-300% of the federal poverty level would qualify for assistance purchasing more efficient high-energy use products for their homes as well as making their home more efficient overall.

What is the Smart Thermostat Demand Response Program?

The ESP stipulation proposes a demand response program which will provide residential customers with a $75 incentive toward the purchase of a new qualifying smart thermostat or a $50 enrollment incentive for residential customers with existing qualifying smart thermostats. By enrolling in the program, customers agree to participation in up to 16 “demand response” events that reduce (winter)/increase (summer) the temperature during times of peak energy usage. There would be no more than a 3-degree change in either direction during a peak demand event. Residential customers could override the settings, but would still receive the annual $25 incentive as long as the customer participates in at least 75% of demand response events over the course of a calendar year. If no events are called, the customer would still receive the $25 incentive.

What time-of-day EV rates are offered with this settlement?

This settlement includes two options for additional EV Time of Day (TOD) rates for residential customers. Option 1 is a whole home TOD rate with off peak savings of 40%. Option 2 is a separately metered TOD rate with an off-peak credit of 40% and a super off peak credit of 70% for all PEV kWh measured at the separate meter. Additionally, the settlement includes a Public Transit & School Bus plug-in EV TOD tariff.

What economic development programs are included?

The agreement also establishes an economic development program where AEP Ohio will work in partnership with state, regional, and local development partners and private sector leaders to attract new investment and job growth in economically distressed communities and rural areas throughout AEP Ohio’s service territory. The plan will make $900,000 annually in grants available with AEP shareholders funding 50 percent.

What are the next steps?

The PUCO will review the agreement filed by the parties and all testimony submitted. Finally, after extensive review, the PUCO will issue its opinion and order regarding the stipulation.