AEP Shares Fall After Ohio Regulators Reverse Rate Increases
February 23 2012 - 2:19PM
Dow Jones News
American Electric Power Co. Inc. (AEP) shares fell as much as 5%
after Ohio regulators reversed a previous decision that allowed the
company's Ohio utility to raise rates.
The Public Utilities Commission of Ohio reversed a December
decision that had approved a settlement agreement that AEP Ohio had
reached with customer and other groups that approved the utility's
plans to raise rates and spin off its Ohio power plants. Instead,
the commission ordered the utility to return its rates to December
2011 levels until a new rate plan is approved.
Shares of AEP were recently trading 4.8% lower at $37.92, paring
earlier losses.
The commission's reversal was driven by concerns that the rate
change has led to huge utility bill increases for small commercial
customers and that the power-plant divestitures could "unfairly
impact" Ohio customers, said Matt Butler, a spokesman for the
commission.
"Our decision effectively hits the reset button on AEP's
electric security plan, allows us to start over from the beginning,
ensure that we have a complete picture of any proposal, and balance
the interests of all customers and the utility," PUCO Chairman Todd
Snitchler said in a statement.
AEP has 30 days to modify its rate-increase request before the
commission reopens the case and sets a new schedule that would lead
to a new decision.
AEP Chief Executive Nick Akins said earlier this month that the
company's plans to separate its Ohio power plants from the utility
was an important step for the company. AEP filed a request with
federal regulators this month for approval of the separation
plans.
An AEP Ohio spokesman declined to comment on Thursday's
decision.
Telephone calls to AEP's corporate headquarters weren't
immediately returned. A telephone call to Ohio's top consumer
advocate, Ohio Consumers Counsel, wasn't immediately returned.
-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468;
cassandra.sweet@dowjones.com
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