GAHANNA, Ohio — AEP Ohio with the Public Utilities Commission of Ohio (PUCO) filed a stipulated agreement in support of the company’s expanded Purchase Power Agreement (PPA). The agreement will be signed or unopposed by 11 parties, including the PUCO staff, Sierra Club, Ohio Partners for Affordable Energy, Ohio Energy Group, Ohio Hospital Association, Mid-Atlantic Renewable Energy Coalition, as well as three competitive retail energy suppliers.
“We are pleased to have reached an agreement on a comprehensive plan that helps ensure more stable electricity prices for Ohio consumers and promotes a reliable and diverse generation supply to support the Ohio economy,” said Pablo Vegas, AEP Ohio president and chief operating officer. “This agreement addresses many of the concerns raised by a diverse group of parties including advocates for low-income customers, environmental organizations, industrial and commercial customers and competitive energy suppliers. We appreciate the willingness of everyone involved to work together to support the state economy, preserve jobs, improve the environmental impact of Ohio’s electricity generation resources and protect Ohio customers from electricity price volatility.”
The stipulated agreement, expected to be ruled on by the PUCO early in 2016, would require AEP Ohio to enter into an eight-year power purchase agreement (ending May 31, 2024) for the capacity, energy and ancillary service output of AEP’s 2,671 megawatt (MW) ownership share of nine generating units and AEP Ohio’s 423 MW contractual share of Ohio Valley Electric Corporation (OVEC) generation. The nine generating units include Cardinal Unit 1 in Brilliant (Jefferson County); Conesville Units 4, 5 & 6 in Conesville (Coshocton County); Stuart Units 1-4 in Aberdeen (Brown County); and Zimmer Unit 1 in Moscow (Clermont County).
The agreement includes significant environmental improvements to AEP-owned generating units including converting Conesville Units 5 and 6 to co-fire natural gas by Dec. 31, 2017, subject to regulatory approval, and retiring, refueling or repowering Conesville Units 5 and 6 and Cardinal Unit 1 to only use natural gas by the end of 2029 and 2030, respectively – a significant acceleration in ceasing coal operations at these units.
AEP Ohio also committed to develop at least 900 MW of wind and solar energy projects in Ohio over the next five years; continue its strong support of energy efficiency programs; move forward with grid modernization efforts, including the installation of smart meters, distribution automation and Volt-VAR optimization; and provide up to $100 million in customer credits during the term of the agreement.
Although the agreement alone would involve a monthly increase of 62 cents in the first year for a residential customer using 1,000 kilowatthours per month on AEP Ohio’s Standard Service Offering, when combined with AEP Ohio’s recently implemented Electric Security Plan, that customer would actually see a decrease, on average, of $9 per month from the same period a year ago. In aggregate, the plan is expected to save consumers $721 million over the life of the agreement.
AEP Ohio delivers electricity to nearly 1.5 million customers of AEP’s subsidiary Ohio Power Co. in Ohio. AEP Ohio is based in Gahanna, Ohio, and is a unit of American Electric Power.
American Electric Power is one of the largest electric utilities in the United States, delivering electricity to nearly 5.4 million customers through 223,000 miles of distribution lines in 11 states. AEP owns the nation’s largest electricity transmission system, a more than 40,000-mile network that includes more 765-kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP also ranks among the nation’s largest generators of electricity, owning approximately 32,000 megawatts of generating capacity in the U.S. AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP’s headquarters are in Columbus, Ohio.