FRANK LEWIS

PDT Staff Writer

An executive from OSCO Industries Inc. in Portsmouth testified before the Public Utilities Commission of Ohio (PUCO) Tuesday and urged the Commission to reject electricity rate hikes that have been proposed by AEP Ohio.

OSCO President John Burke traveled to Columbus to describe for Commission members the potential impact on OSCO of certain provisions of AEP Ohio’s proposed Electric Security Plan (ESP) and capacity pricing plan. (“Capacity” is the portion of a customer’s electricity generation rate associated with the costs an electric utility incurs to have enough power available to meet demand in its territory.)

Burke told Commissioners that AEP’s proposals, in particular a nonbypassable Retail Stability Rider and capacity prices the Ohio Manufacturers Association says are dramatically higher than current market rates, would “create operational strain” on OSCO. He explained that AEP Ohio’s proposed rate structure would “thwart the company’s ability to proactively manage its electricity costs and mitigate the impact of the rate hike by shopping with competitive suppliers.”

Burke told Commissioners the result would be significantly higher electricity costs for OSCO, which he said would undermine the company’s competitiveness.

According to Burke, the AEP Ohio proposal “holds customers captive to higher rates and essentially serves as a tax on shopping.” The proposed nonbypassable rider and above-market capacity charge, he says, are “not reasonable and should be rejected” by the PUCO.

Burke is one of six manufacturers testifying this week on behalf of the Energy Group of the Ohio Manufacturers’ Association (OMA). Members of the OMA Energy Group include manufacturers across Ohio with a significant interest in issues that affect the price and availability of electricity for their facilities in Ohio.

“Manufacturers like OSCO Industries are deeply concerned that AEP Ohio’s rate increase proposals will undermine companies’ competitiveness and diminish the resources available for capital investments, process improvements, worker training and job retention and creation efforts,” said Kevin Schmidt, the OMA’s director of energy services. “Those outcomes would be harmful not only for Ohio manufacturers but also for our state’s ongoing economic recovery.”

Earlier in the year, a local shoelaces manufacturer successfully helped fight to keep AEP from its first rate increase proposal.

On Feb. 14 State Rep. Dr. Terry Johnson, R-McDermott, and small business owner Bryan Davis of Sole Choice Inc., met with the Public Utilities Commission of Ohio (PUCO) to voice their opposition to the utility’s rate increases. That proposal would have raised his electric rate by 42 percent, he said.

“I told them, this is a job killer,” Davis said. “Decisions moving forward to hire people, this would have to be a determining factor. Say we wanted to hire six, we may only hire three.”

AEP Ohio currently has two cases before the Public Utilities Commission of Ohio (PUCO) that will have significant impact on electricity prices for Ohio businesses and residents: The Rate case deals with the default pricing or Standard Service Offer (SSO) pricing, for customers that choose not to shop in AEP Ohio’s service territory for the years 2012-2015. Capacity Pricing case deals with the price that AEP Ohio may charge competitive retail electric service (CRES) providers until June 1, 2015, for using its capacity to serve customers in AEP Ohio’s service territory who already are shopping or who choose to shop in the future.

The PUCO is expected to rule on AEP Ohio’s proposals sometime this summer.

Frank Lewis may be reached at 740-353-3101, ext. 232, or at flewis@heartlandpublications.com.