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Justices rule against AEP in fuel-cost case, so Ohio customers avoid a cost

By: Dan Gearino |

The Ohio Supreme Court has sided with utility regulators in a dispute with American Electric Power over how much the company can charge customers for coal, part of a larger debate that is not yet resolved.

In a unanimous ruling yesterday, the court rejected AEP’s argument that it should have been able to keep $71.6 million that it received related to a coal contract in 2009.

The Columbus-based utility disagreed with the Public Utilities Commission of Ohio about how much of the money should be credited to consumers. The commission allowed AEP to keep some, but not all, of the $71.6 million.

“This is a very complicated opinion, and we are still evaluating it,” said AEP spokeswoman Vikki Michalski. “We are disappointed that the court didn’t accept our challenges in this case.”

A PUCO spokesman had no comment.

Consumers will see no change as a result of the decision. If AEP had prevailed, the company might have been able to charge customers for the amount in dispute.

This case deals with the way AEP pays for fuel for its power plants. In 2009, the PUCO set up a system that allows the company to cover its fuel costs through a charge that changes every three months.

The case is part of a larger debate about how to account for the costs of AEP’s coal contracts from 2009 to 2011. The PUCO is reviewing a related case, one that is likely to end up in court.

Consumer advocates and business groups have raised concerns that AEP did not get the most competitive prices on some of the contracts, and that the company did not properly credit consumers for certain income related to the contracts.