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SWEPCO rate hike faces local resistance; Longview City Council to consider denial recommendation

SWEPCO rate hike faces local resistance; Longview City Council to consider denial recommendation
News
Wednesday, September 21, 2011 - 9:48am

In 2009, AEP Southwestern Electric Power Co. raised utility rates for the first time in 17 years. This year, the company wants to raise prices again, this time in a utility tax adding as much as 17.5 percent to customers’ bills over two years.

The price increase likely is headed for further negotiations with Longview and other cities, however, with the City Council to consider a recommendation at Thursday night's meeting that the increase be denied.

SWEPCO has proposed a three-step rate plan designed to pay for construction and operation of the John W. Turk power plant in Arkansas. The company wants its request approved effective Oct. 4, with collection of higher charges under the rider to begin with SWEPCO’s April billing month.

“It is an application filed by SWEPCO to increase its rates in two steps by $56.71 million in the first year and by another $56.71 million in the second year,” Longview City Attorney Jim Finley said. “Following the second-year increase, SWEPCO would submit an application for a third increase for a yet undetermined amount.”

All 181,000 SWEPCO customers in Texas would be affected by the rate increase if approved by the Public Utility Commission of Texas, ultimately paying one-third of the Turk plant’s cost.

In the first year, typical residential customers that use 1,000 kilowatt hours of energy per month would see their monthly bills increase 4.2 percent. In the second year, those customers’ bills would increase another 5.1 percent.

In addition, SWEPCO wants state commissioners to issue an accounting order that allows the company to defer operation and maintenance expenses, carrying costs and depreciation expense into a regulatory asset account after the Turk plant is placed in service.

“Such an accounting order would permit the company to preserve these expenses for review in a future base rate case, but would not impact SWEPCO’s rates at this time,” company officials stated in a public notice printed Sept. 14 in the Longview News-Journal. “SWEPCO is not requesting a change in base rates. Rather, SWEPCO is requesting that the (Public Utility) Commission approve a new tariff ... SWEPCO is not requesting revisions to any of its existing tariffs.”

Read the full story here.

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