Proposed AEP rate hike in the works for many Ohio businesses

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derek bomar

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Dec 5, 2011 12:41 PM
http://www.dispatch.com/content/stories/business/2011/12/04/aep-rate-planhits-small-business.html

Full disclosure, the company the dispatch mentioned doing the analysis is run by my mother.

Basically, large mfg is getting a cut, and to make up for it, smaller businesses (those who are GS-2 customers) are going to see an increase of up to 30-40% next year. This happened because they weren't represented in back-room talks.

"The AEP proposal was crafted in closed-door talks that led to a negotiated settlement. This process, which is common at the PUCO, is a way to expedite the public litigation process that otherwise would be used.In this case, more than two dozen parties took part in the talks, including trade groups, companies and consumer advocates. The starting point was a plan that AEP submitted in January, which would have reduced rates for many small businesses. During talks, advocates for large manufacturers successfully pushed for a reduction in their rates, which shifted some of the burden to smaller businesses."


The kicker is, even if you aren't an AEP customer, you're still going to get the increase. And this is really without warning to many...

The governor has stated he won't get involved in a rate case, but this seems to be totally unfair and something that won't help Ohio create jobs going forward.
Dec 5, 2011 12:41pm
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sjmvsfscs08

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Jan 27, 2012 11:58 AM
It's fucking insane.
Jan 27, 2012 11:58am
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QuakerOats

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Jan 27, 2012 11:58 AM
FirstEnergy Shutting Down 6 coal-Fired Power Plants
FirstEnergy says that new Obama administration’s environmental regulations led to a decision to shutdown 6 coal-fired power plants in Ohio, Pennsylvania and Maryland, laying off more than 400 employees. The plants, which are in Cleveland, Ashtabula, Oregon and Eastlake in Ohio, Adrian, Pennsylvania and Williamsport, Maryland, will be retired by September 1[SUP]st[/SUP]. They have generated about 10% of the electricity produced by FirstEnergy over the last 3 years, the company said. ‘This decision is not in any way a reflection of the fine work done by the employees at the affected plants, but is related to the impact of new environmental rules,’ said James Lash, president unit. He said that a review of the company’s coal-fired plants determined it would not be cost-effective to get the older ones into compliance with the stringent new regulations EPA announced in December. The new standards are designed to drive up the cost of coal and oil-fired power plants so that they can’t compete with subsidized renewables and natural gas and are shut down. A recent survey found that the changes are likely shutdown dozens of units in the Midwest and in Kentucky, West Virginia, and Virginia. FirstEnergy said its decision would directly affect 529 employees.
Jan 27, 2012 11:58am
derek bomar's avatar

derek bomar

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3,722 posts
Jan 27, 2012 12:13 PM
QuakerOats;1067642 wrote:
FirstEnergy Shutting Down 6 coal-Fired Power Plants
FirstEnergy says that new Obama administration’s environmental regulations led to a decision to shutdown 6 coal-fired power plants in Ohio, Pennsylvania and Maryland, laying off more than 400 employees. The plants, which are in Cleveland, Ashtabula, Oregon and Eastlake in Ohio, Adrian, Pennsylvania and Williamsport, Maryland, will be retired by September 1[SUP]st[/SUP]. They have generated about 10% of the electricity produced by FirstEnergy over the last 3 years, the company said. ‘This decision is not in any way a reflection of the fine work done by the employees at the affected plants, but is related to the impact of new environmental rules,’ said James Lash, president unit. He said that a review of the company’s coal-fired plants determined it would not be cost-effective to get the older ones into compliance with the stringent new regulations EPA announced in December. The new standards are designed to drive up the cost of coal and oil-fired power plants so that they can’t compete with subsidized renewables and natural gas and are shut down. A recent survey found that the changes are likely shutdown dozens of units in the Midwest and in Kentucky, West Virginia, and Virginia. FirstEnergy said its decision would directly affect 529 employees.
Quaker - the rate impact of what AEP did was close to revenue neutral for them. Big MFG was given a reduction and small business is paying for it. Why is it that Republicans like yourself hate the idea of Barry taking money from rich people and giving it to the poor, but are fine with the exact opposite with respect to business (giving credits to large business while making the little guy pay for it)?
Jan 27, 2012 12:13pm
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QuakerOats

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8,740 posts
Jan 27, 2012 1:20 PM
I am not a fan of utility monopolies. They could not survive in a real world of free competition. I am also not a fan of ridiculous regulations imposed by a radical administration which will cost every one of us dearly, one way or another. see IggyPride's post today in the Disgusted with obama Administration forum.
Jan 27, 2012 1:20pm
derek bomar's avatar

derek bomar

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Jan 27, 2012 1:25 PM
QuakerOats;1067743 wrote:I am not a fan of utility monopolies. They could not survive in a real world of free competition. I am also not a fan of ridiculous regulations imposed by a radical administration which will cost every one of us dearly, one way or another. see IggyPride's post today in the Disgusted with obama Administration forum.
Obama had nothing to do with how this went down.
Jan 27, 2012 1:25pm
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fan_from_texas

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Jan 27, 2012 1:35 PM
QuakerOats;1067743 wrote:I am not a fan of utility monopolies. They could not survive in a real world of free competition.
That's not true. On the retail distribution level, the provision of power is a natural monopoly, and you're not going to get many serious free-market economists who disagree--economists of all stripes, when faced with a natural monopoly, support monopoly + regulation.

The wholesale provision of power, on the other hand, is not a natural monopoly, and that's why it's been unbundled over the past two decades.
Jan 27, 2012 1:35pm
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QuakerOats

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Jan 27, 2012 3:23 PM
My point was that utilities run on a cost plus basis; there is no true incentive to run lean ----- it's hey, our costs are X, so we need to charge Y, and PUCO's typically rubber stamp the requests -- effectively .......... obviously the utility asks for far more than it needs, they get a small smackdown, and end up with plenty. Built-in inefficiencies out the ying yang.
Jan 27, 2012 3:23pm
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fan_from_texas

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Jan 27, 2012 4:57 PM
QuakerOats;1067863 wrote:My point was that utilities run on a cost plus basis; there is no true incentive to run lean ----- it's hey, our costs are X, so we need to charge Y, and PUCO's typically rubber stamp the requests -- effectively .......... obviously the utility asks for far more than it needs, they get a small smackdown, and end up with plenty. Built-in inefficiencies out the ying yang.

Sure, that's generally fair enough. Many states are moving toward performance-based ratemaking, but that introduces new hurdles (e.g., the utility gets paid regardless of power consumed). I think we're probably on the same page here.
Jan 27, 2012 4:57pm
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derek bomar

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Jan 30, 2012 11:09 AM
I have a (strong) hunch this is going to get a lot worse for AEP in the press soon. Just a hunch.
Jan 30, 2012 11:09am
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QuakerOats

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Feb 10, 2012 4:02 PM
[h=1]Breaking News: PUCO to Reconsider Rate Hike on Small Businesses[/h][h=2]ORA commends Chairman Snitchler for responding to restaurateurs' concerns[/h]
The Public Utilities Commission of Ohio (PUCO) announced today that it will revisit portions of an AEP Ohio rate plan that had significantly increased rates for many small businesses, including restaurants.
PUCO Chairman Todd Snitchler, who will address the Ohio Restaurant Association Board of Directors in March, said the review will address the negative impact the commission's decision is having on small employers.
"My fellow commissioners and I are deeply troubled by what we have heard from business owners, elected officials and the governor on this issue," Snitchler said. "We acknowledge the negative impact our decision is having on small businesses - the backbone of Ohio's economy."
"Now that we have a full understanding of the impacts, we are actively developing a plan to resolve the rate impacts faced by affected General Service 2 customers," Snitchler added. He expects to resolve this case by the end of the month.
In a letter today to the PUCO, ORA President & CEO Geoff Hetrick said, “On behalf of the scores of ORA members who were shocked when they received their January bill, thank you for listening to their concerns. We hope that this results in immediate, meaningful rate reductions.”
AEP’s service territory covers the southeastern third of Ohio (including Central Ohio) and counties surrounding Findlay. However, the PUCO’s decision in the AEP case could have positive benefits for ORA members statewide as future rate cases are decided.
Feb 10, 2012 4:02pm
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derek bomar

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Feb 10, 2012 4:40 PM
it's mind boggling to for them to say they didn't know what the impact was going to be... of course they did. I honestly don't get how this was even passed. This should have been laughed at from day 1.
Feb 10, 2012 4:40pm
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derek bomar

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Feb 23, 2012 10:16 AM
It's getting reversed. Kudos should go out to the Dispatch and their excellent reporting on the issue.
Feb 23, 2012 10:16am
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QuakerOats

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Feb 23, 2012 10:53 AM
Confirmed -- PUCO threw out the rate stipulation --- back to December rates, and back to the drawing board. Kudos to small and mid-sized businesses for raising hell.
Feb 23, 2012 10:53am
derek bomar's avatar

derek bomar

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Feb 23, 2012 10:54 AM
QuakerOats;1093538 wrote:Confirmed -- PUCO threw out the rate stipulation --- back to December rates, and back to the drawing board. Kudos to small and mid-sized businesses for raising hell.
we don't often agree. +1
Feb 23, 2012 10:54am
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QuakerOats

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Feb 23, 2012 11:04 AM
Even if rate increases were warranted in some fashion (and that's a BIG IF), you do not go about it by slamming small and mid-sized businesses and other entities in one fell swoop, with no advance warning, by such devastating amounts. That is what was perhaps most reprehensible about it. You would justify to those certain segments why the increases were warranted and phase it in over a long-term period in order to allow them to react and adjust.
Feb 23, 2012 11:04am
derek bomar's avatar

derek bomar

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3,722 posts
Feb 23, 2012 11:22 AM
QuakerOats;1093548 wrote:Even if rate increases were warranted in some fashion (and that's a BIG IF), you do not go about it by slamming small and mid-sized businesses and other entities in one fell swoop, with no advance warning, by such devastating amounts. That is what was perhaps most reprehensible about it. You would justify to those certain segments why the increases were warranted and phase it in over a long-term period in order to allow them to react and adjust.
it also didn't help that certain segments were getting decreases (in some cases seeing credits on their bill) and in order to pay for it, they were screwing small business. This was just sooooo so bad I am surprised it took this long. And this was quick.
Feb 23, 2012 11:22am