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The Dispatch wrote
AEP customers criticize proposed rate hike
Tuesday, October 21, 2008
BY DAN GEARINO
Stung by a slumping economy and rising expenses, several American Electric Power customers said today that they can’t afford the utility’s plan to raise rates about 15 percent in each of the next three years.
“To say that a monumental rate increase would cause hardship is an understatement,” said Dianne Garrett of Whitehall. She was one of 25 speakers at a Public Utilities Commission of Ohio hearing on the rate plan. Roughly half had concerns about the cost, while others praised AEP’s charitable work or spoke about environmental issues. The commission will rule on the request later this year.
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Let me get this straight, as I’m about to write a letter to the PUCO and don’t want to make any errors.
AEP has a monopoly at least in Columbus, even though the PUCO initially put regulations in place to allow electric choice. Some cities aggregated but they still buy their electricity from AEP, right? No choice has evolved in the time period in which they locked rates. Rates are now becoming unlocked, and there is no choice. So whatever PUCO allows, we pay. Essentially the PUCO did not negotiate the terms of the regulations very well, allowing for Ohio consumer to get F’d in the A if and when no choices emerged in the market.
Please correct me if I am wrong so I can make a stronger argument in my letter.
AEP has a monopoly at least in Columbus, even though the PUCO initially put regulations in place to allow electric choice. Some cities aggregated but they still buy their electricity from AEP, right? No choice has evolved in the time period in which they locked rates. Rates are now becoming unlocked, and there is no choice. So whatever PUCO allows, we pay. Essentially the PUCO did not negotiate the terms of the regulations very well, allowing for Ohio consumer to get F’d in the A if and when no choices emerged in the market.
Please correct me if I am wrong so I can make a stronger argument in my letter.AEP has the cheapest rates in the nation (mostly due to burning nothing but coal.) Much of the new costs relates to putting in pollution controls for NOx and SOx on their plants.
http://www.pbs.org/wgbh/pages/frontline/heat/view/
Energy should be much more expensive.
Energy should be much more expensive.
Is your ultimate goal no jobs or economy whatsoever in Ohio?
A.
It’s for the good of the ‘community’!
energy is extremely expensive for those that can’t afford it. also, a raise in the rates means LiHEAP funds don’t go as far per household.
http://www.acf.hhs.gov/programs/ocs/liheap/
Energy should be much more expensive.
Is your ultimate goal no jobs or economy whatsoever in Ohio?
A. No, certainly not. I don’t want to see Ohio at a competitive disadvantage, but agree that AEP is justified in raising rates in their attempt to mitigate the rise in the cost of coal, SOx and NOx, global warming, etc. Energy should cost more nearly everywhere though. Mr. Hall, is it of your opinion that AEP doesn’t need to improve their operations?
Energy should be much more expensive.
Is your ultimate goal no jobs or economy whatsoever in Ohio?
A. No, certainly not. I don’t want to see Ohio at a competitive disadvantage, but agree that AEP is justified in raising rates in their attempt to mitigate the rise in the cost of coal, SOx and NOx, global warming, etc. Energy should cost more nearly everywhere though. Mr. Hall, is it of your opinion that AEP doesn’t need to improve their operations?
I don’t know. There are too many facets about which I have no information.
On individual power delivery, they did fairly well all things considered during the recent outages. There were places where it required an almost pole-by-pole fix. In comparison to what we used to experience when I lived in NOLA (pre-Katrina), they do much better.
As to infrastructure, capacity and operations – I don’t know anything.
Pollution, emissions and the like – I don’t know anything.
As to the larger grid, I thought AEP was a net seller of power which is one of the reasons the costs to the consumer were lower than elsewhere. But I really don’t know.
I do know that across the board energy cost increases will be next impossible to pass on for a lot of businesses in the current climate. That is a death knell for Ohio’s economy.
A.
Energy should be much more expensive.
Is your ultimate goal no jobs or economy whatsoever in Ohio?
A. No, certainly not. I don’t want to see Ohio at a competitive disadvantage, but agree that AEP is justified in raising rates in their attempt to mitigate the rise in the cost of coal, SOx and NOx, global warming, etc. Energy should cost more nearly everywhere though. Mr. Hall, is it of your opinion that AEP doesn’t need to improve their operations?
They fought having to do anything about their emissions through the courts for years and years to delay having to do anything. If they had done these things years ago (while they were fighting in court for their right to spew toxic and radioactive emissions) they could have done these things cheaper and absorbed the costs in very small chunks into their profit margins with little impact on those margins.
but no, they fought in court and did nothing knowing that they could just raise rates to cover the (higher) costs later and make more money. The things they’re talking about doing now would barely bring them into compliance with current regulation. I have not heard they are doing anything about CO2 as it is not regulated at all yet. Once it is they will likely fight THAT in court for another decade before they do anything.
*spit on the ground*
While coal is still the cheapest:
http://seekingalpha.com/article/97771-coal-prices-set-to-go-up
http://in.reuters.com/article/businessNews/idINIndia-32348920080307
Energy should be much more expensive.
Is your ultimate goal no jobs or economy whatsoever in Ohio?
A. No, certainly not. I don’t want to see Ohio at a competitive disadvantage, but agree that AEP is justified in raising rates in their attempt to mitigate the rise in the cost of coal, SOx and NOx, global warming, etc. Energy should cost more nearly everywhere though. Mr. Hall, is it of your opinion that AEP doesn’t need to improve their operations?
They fought having to do anything about their emissions through the courts for years and years to delay having to do anything. If they had done these things years ago (while they were fighting in court for their right to spew toxic and radioactive emissions) they could have done these things cheaper and absorbed the costs in very small chunks into their profit margins with little impact on those margins.
but no, they fought in court and did nothing knowing that they could just raise rates to cover the (higher) costs later and make more money. The things they’re talking about doing now would barely bring them into compliance with current regulation. I have not heard they are doing anything about CO2 as it is not regulated at all yet. Once it is they will likely fight THAT in court for another decade before they do anything.
*spit on the ground* While limited, they are trading carbon emissions.
http://www.chicagoclimatex.com/
Mike must want to destroy the economy also.
No. I’m saying that if they had planned for environmental compliance from the beginning it would have been possible to implement it within their current pricing structure. Now, if I recall the end results of the lawsuits, they also have judgments against them which have added substantially to the costs.
http://www.accountability-central.com/single-view-default/article/fact-sheet-united-states-et-al-vs-american-electric-power/
Also, if you look at that they’re talking about 4.6 billion in environmental ‘upgrades’ in 8 years, which is about 600mill/year over those 8 years. Hardly a massive hit for a company that clears 18 Bill/year profit, but even THAT could have been significantly reduced had they just done it from the beginning. But they knew they didn’t have to. They knew they could get US to pay for it.
No. I’m saying that if they had planned for environmental compliance from the beginning it would have been possible to implement it within their current pricing structure. Now, if I recall the end results of the lawsuits, they also have judgments against them which have added substantially to the costs.
http://www.accountability-central.com/single-view-default/article/fact-sheet-united-states-et-al-vs-american-electric-power/ I seriously doubt it. Pollution controls are expensive, hence why they fought them. The settlement was a 15 million dollar fine (which isn’t much) and an agreement to spend 4.6 Billion on pollution control.
No. I’m saying that if they had planned for environmental compliance from the beginning it would have been possible to implement it within their current pricing structure. Now, if I recall the end results of the lawsuits, they also have judgments against them which have added substantially to the costs.
http://www.accountability-central.com/single-view-default/article/fact-sheet-united-states-et-al-vs-american-electric-power/ I seriously doubt it. Pollution controls are expensive, hence why they fought them. The settlement was a 15 million dollar fine (which isn’t much) and an agreement to spend 4.6 Billion on pollution control.
please see my edits to my last post because I knew you were going to say that. Long story short, no, it’s NOT expensive. That argument is their smoke screen.
No. I’m saying that if they had planned for environmental compliance from the beginning it would have been possible to implement it within their current pricing structure. Now, if I recall the end results of the lawsuits, they also have judgments against them which have added substantially to the costs.
http://www.accountability-central.com/single-view-default/article/fact-sheet-united-states-et-al-vs-american-electric-power/ I seriously doubt it. Pollution controls are expensive, hence why they fought them. The settlement was a 15 million dollar fine (which isn’t much) and an agreement to spend 4.6 Billion on pollution control.
please see my edits to my last post because I knew you were going to say that. Long story short, no, it’s NOT expensive. That argument is their smoke screen. Well it isn’t expensive in terms of $32 billion a year in health costs (not to mention the unforseen ecological costs) they were causing but $4.? billion is expensive. What are you saying isn’t expensive? Pollution controls?
I’m saying that 4.6 billion spread out over the almost maybe 10 years they’ve been fighting doing anything is a very small part of their profits over those 10 years.
Also I’m saying that it wouldn’t have cost 4.6 billion in the first place if they had started doing something about the problem from the beginning. I do not know what the cost inflation has been, but it’s not negligible.
Also, I’m saying that 4.6 billion spread out over their expected profits in the 8 years they are talking about until they reach compliance is less than 3% of their net profits* without raising rates at all. That’s called the cost of doing business.
*(4.6 billion out of projected profits of 140 billion)
Now… the price of coal going up… that actually has some validity, but even then the rate hike they are asking for is excessive.
I think my biggest concern is that our dollar becomes weaker and our earning power decreases while AEP raises a 100 dollar bill to a 148 dollar bill. That 148 dollars actually costs even more in today’s terms.
Does PUCO have the final say in how much AEP can raise its rates?
Seems to me like AEP was too cheap and busy basking in corporate profits to take care of clean air standards. If they’d done that when they should have, instead of spending time in court and putting shiny lights on their corporate headquarters, the rate increase would be less.
bingo
bingo
Here is a (non-rhetorical) question : Is the economic benefit we got from relatively lower rates more or less than the current/future incurred costs of a rate hike?
I don’t know, but my first instinct is that Ohio benefitted more from cheaper energy costs during the boom years and suffered less than it might of during the post-00-9/11 crunch than it might have otherwise. OTOH, cost-induced efficiency gains might have been more.
A.