Rising Electricity Generation Supply Costs Impacting Many Customers

Frequently Asked Questions

Due to the auction results, what is the average increase for a residential customer?

Effective June 2023, the results of the auction lead to an increase in the price customers pay for the generation portion of their bill. A typical residential customer using 1,000 kilowatt-hours of energy each month can expect their total bill to increase about 28% from today's typical bill of about $155 to about $198. These rates will be in effect until May 2024.

The Price to Compare (PTC) for the current cost of generation supply is listed on the Apples to Apples comparison chart provided by the Public Utilities Commission of Ohio (PUCO). Effective June 1, 2023, the residential PTC for the generation supply portion of a customer's bill is $0.1184478/kWh.

Why is my bill for May usage being charged at the new rate that didn't take effect until June 1?

Any bill created on or after June 1 is calculated using the new rate.

I need help paying my bill. What should I do?

We recognize that financial hardships happen, and sometimes you might need a little extra support paying your bill. Whether you need more time to pay or would like to set up a payment arrangement, we can work together to find the right option for you:

• Visit AEPOhio.com/Assistance
• Message us on Facebook or X
• Call 1.800.672.2231

Why is the cost of electricity changing?

Energy prices have increased significantly in the last few months. Global demand, global supply chain issues, economic uncertainty and the continued war in Ukraine have had an impact on the cost to produce electricity. As long as global energy supplies remain tight, we expect prices to remain higher than in recent years.

How does the auction process work?

For the generation (supply) portion of your bill a competitive market auction process is used. This is where energy supply companies submit bids in the auction for the ability to supply energy to AEP Ohio customers for a specified time period at the lowest price possible. This generation supply component is called the Standard Service Offer (SSO).

The auction for the SSO is conducted by an independent auction manager and the whole process is overseen by a consultant approved by the Public Utilities Commission of Ohio.

Will AEP Ohio profit from this bill change?

No, AEP Ohio will not profit from this rate change. Prices for generation supply are set by a market-based competitive auction process overseen by an independent auction manager - prices are reviewed and approved by the Public Utilities Commission of Ohio. We pass the actual cost (the price determined by the winning auction suppliers) directly to our customers, dollar for dollar, with no markup.

How does the latest auction compare to the historical results of previous auctions?

The auction results are not within the control of AEP Ohio. The following represents the results of auctions held to procure electricity for AEP Ohio's Standard Service Offer (SSO) customers from 2015 through 2023. The average auction clearing price, over this period, was $48.85 per megawatt hour (MWH). This compares favorably to the results in 2022 and 2023 that averaged over $90 per MWH. Since deregulation in Ohio started, the auction results show that the process to procure electricity has yielded competitive fair market prices. The current increase in pricing reflects variable market conditions due to inflation, price of natural gas and other market factors.

Source: The results for the AEP Ohio Competitive Bidding Process for SSO Supply auction are available at AEP Ohio CBP. Additionally, these results are filed with the Public Utility Commission of Ohio and are available at DIS - Case Record for 17-2391-EL-UNC (state.oh.us).

How are these changes related to the Electric Security Plan filed earlier this year?

In January, we filed our Electric Security Plan (ESP), which included a proposed investment in infrastructure to improve the reliability of your service starting in June 2024. This includes updates to our tree maintenance program, establishing new money-saving programs for our customers and more.

The latest bill increases from the generation supply auction took effect in June 2023. They are unrelated to the ESP, which will not take effect until 2024, and are the result of a market-based auction process that is out of our control.

Does this have anything to do with the rate case that was approved in 2021?

No, this increase is a result of the recent market-based auction. For residential customers, the base rate case resulted in a monthly decrease of 0.58% or $0.71 for an average residential customer using 1,000 kilowatt hours per month, effective December 2021.

How do I learn more about my energy supplier and the price to compare?

The price to compare is the rate you will pay for electric generation if you do not switch to a Competitive Retail Energy Service provider. It is, in part, based on results from the competitive market auction. See page three of your electric bill to learn about the price to compare and choose who generates your power by visiting energychoice.ohio.gov.

Do I have a choice in my generation supplier?

Yes, in Ohio customers are free to choose who provides the generation supply portion of their electric service - either by affirmatively choosing a competitive provider or by receiving the default standard service offering. Customers can compare supply rates at energychoice.ohio.gov.

Are there any other changes happening to my bill that might create an opportunity for savings?

There are a number of required riders on electric bills that change periodically, based on approval of the PUCO.

Are there programs I can take advantage of to save money on my electric bill?

Aside from visiting the energychoice.ohio.gov to compare generation prices, there is a time-of-use rate available for qualifying residential customers. The time-of-use rate applies only to energy usage between the hours of 6 a.m. to 9 a.m. from November through April, and between 2 p.m. and 6 p.m. from May through October. Customers can determine if they might benefit from this opportunity by logging in to your AEP Ohio account and taking the following steps:

1. On the "My Account" home page, scroll to the bottom of the page and select "Electric Rates."
2. On the "AEP Ohio Electric Rates" page, select "Compare Your Rates."
3. On the "Compare Rates" page, scroll down until you see "Compare all rate plans."
4. Listed below "Compare all rate plans" there is a section for "Residential Time of Use Service." Click "Learn More" to view further details about the Time of Use rate.

   a. To view the bill comparison on a monthly basis, while on the "Rate details" page, scroll down to "Monthly estimated costs" and select "Show monthly breakdown."