New AEP rate plan expected to benefit competitors

As utilities, retail energy providers and even the regulators themselves sort through the final ruling on American Electric Power’s new rate hike, it appears as though AEP’s major competitors will benefit most from the decision, The Columbus Dispatch reports.

According to the news source, independent electric suppliers hoping to encourage AEP customers to switch energy providers will now be able to do so at a much lower cost. Per the ruling, many of the fees that went along with attracting AEP customers have been passed on to consumers, which would have set such providers back hundreds of millions of dollars.

But AEP is still happy with the decision, as it will allow the utility to collect three years of rate increases, and also includes a provision that guarantees income no matter what competition develops.

Now, retail providers operating in Ohio, including FirstEnergy Solutions, Direct Energy and Border Energy, will better be able to raise awareness about switching electricity suppliers, which can often lead to lower electricity rates.

As of June 30, one-third of AEP’s customer base had already switched to one of AEP’s many competing electricity suppliers.