March 14, 2024

What is happening?

On the last day of February, AEP filed a request to adjust delivery rates with the Texas PUC under proceeding 56165. The filing is part of a normal process where rates are regularly reviewed and adjusted based on changes in costs to operate the utility delivery system and the amount of energy it delivers for customers.

AEP requested the new rates take effect in early April, although we do not anticipate invoices showing any adjustments that soon.

What is the impact?

Due to changes in the amount of energy used by the different customer types and the need for significant new investments to support overall increases in energy demands in Texas, AEP has asked to adjust its rate structures.

They have requested increased standing monthly charges for larger accounts, with customer charges decreasing but metering charges increasing, especially for Transmission voltage level accounts.

More impactfully, they also ask for a significant adjustment to system cost allocations as commercial account usage has increased dramatically, shifting cost obligations to those account types. They requested demand-based charges for small and medium commercial accounts to rise by over 50%, but those charges for the highest voltage accounts decreased by almost 40%.

The total requested revisions by customer type are:

• Residential accounts will see an increase of ~15%
• Small Commercial (under 10 kW) will see a decrease of ~9%
• Secondary voltage Commercial over 10 kW will see an increase of ~14%
• Primary voltage accounts will see an increase of 22%
• Transmission voltage accounts will see a decrease of 28%

What is new?

AEP is also asking to establish a new customer type related to Battery Energy Storage Systems (BESS), which would assess a monthly customer charge as well as a relatively small demand-based delivery component based on peak charging demand.

What happens next?

Over the next several months, extensive hearings and investigations will be conducted into the requested changes, likely resulting in some adjustments to the request before final approval is granted. Tradition will continue monitoring the process to provide an update once the PUC approves final rates.