Ohio Supreme Court affirms AEP Ohio’s rate plan, rejects competitor’s challenge

COLUMBUS, Ohio — The Supreme Court of Ohio affirmed the Public Utility Commission of Ohio’s (PUCO) decision regarding the rate plan of AEP Ohio, rejecting a challenge from Interstate Gas Supply (IGS), a competing electricity generator. The court’s decision upholds that AEP Ohio is not improperly recovering costs associated with its generation services through its distribution rates.

The case centered on allegations that AEP Ohio was using funds collected from customers who do not use its competitive generation services to subsidize its own generation activities. IGS, which operates in competition with AEP in the electricity generation market, argued that the PUCO’s approval of AEP’s 2020 rate plan was detrimental to competition and unfair to customers.

Justice Jennifer Brunner, writing for the court, detailed the requirements for challenging a PUCO-approved rate plan. She explained that it was IGS’s responsibility to demonstrate that the rates approved by PUCO were unjust, unreasonable, or unlawful. The core of IGS’s argument was based on a study conducted by AEP’s own staff, which indicated that approximately $4.7 million collected for electricity distribution might have been used to subsidize AEP’s competitive generation services, benefiting customers who did not choose alternative suppliers.

However, during the PUCO proceedings, IGS had previously contested the reliability of this study. Justice Brunner highlighted that IGS could not later use the disputed study as evidence to claim that AEP’s rates were unjustified or that they unfairly offset generation costs. The court found that IGS had not provided sufficient proof to substantiate their claims that the PUCO acted unreasonably in approving AEP’s rate plan.

The court’s unanimous decision was supported by Chief Justice Sharon L. Kennedy and Justices Patrick F. Fischer, R. Patrick DeWine, Michael P. Donnelly, and Melody Stewart. Additionally, First District Court of Appeals Judge Robert C. Winkler, sitting in place of Justice Joseph T. Deters, joined in the opinion.