PUCT Approves AEP Texas Central Company Request to Increase Rates Charged to Retail Electric Providers

    American Electric Power said the Public Utility Commission of Texas (PUCT) has approved an increase in the rates AEP Texas Central Company (TCC) charges Retail Electric Providers (REPs) for the delivery of electricity over its transmission and distribution system. Based on an initial analysis from TCC, the decision will result in a base rate increase for TCC of approximately $40.8 million, including the expiration of merger credits. The PUCT also approved a $3.5 million increase in service fees. TCC had requested an approximately $70 million base rate increase. "Although we are disappointed that the commission's decision did not result in an increase closer to our $70 million request, the increase certainly will help address our financial condition," said Charles Patton, AEP president and chief operating officer. "Even with this increase, the charges associated with energy delivery in the TCC service territory are only 20% of a typical residential customer's total bill.  Given the state's need for additional electric infrastructure going forward, it will be important for Texas legislators and regulators to re-evaluate how transmission and distribution companies such as TCC receive timely rate relief in order to ensure a safe and secure electric infrastructure." If the REPs choose to pass on the entire amount of the increase to end-use customers, residential customers in the TCC service territory using 1,000 kilowatt-hours a month would see an increase of less than $2 per month, or less than 2% over what they paid prior to June 2007. A final order will be issued in the near future, and TCC anticipates the new rates will be effective by December. As allowed by PUCT rules, rates reflecting TCC's request were put into effect, subject to refund, in May. The difference between the interim rates and the final rates approved by the PUCT will be refunded to the REPs with interest as prescribed by PUCT rules. The REPs will determine whether to pass on all or a portion of the refund to their customers. TCC is one of two transmission and distribution utilities that comprise AEP Texas, a unit of American Electric Power. TCC provides energy delivery service to a 44,000-square-mile area of south Texas. TCC's service territory generally includes the southern portion of Texas from just south of San Antonio to the Mexican border and from Bay City west to Eagle Pass. Major cities in TCC's service area include Corpus Christi, McAllen, Harlingen, Laredo and Victoria. TCC's service territory is entirely within the Electric Reliability Council of Texas (ERCOT). All of the retail customers in TCC's service territory have retail choice. TCC provides distribution service to 700,000 end-use customers receiving electric service from 71 retail electric providers.