Local customers of American Electric Power, already faced with at least one electricity rate increase this year, may well see another rate hike added to their power bills as early as January, according to a plan AEP filed with the Public Utilities Commission of Ohio late last week.

But both the company and the Ohio Consumers Counsel say this proposed two-year increase, adding a $2.24 rider to the bills of residential customers who use 1,000 kilowatt hours of power each month, is a good thing and will be more than offset by energy savings over the long term.

"Our demand for electrical energy is constantly going up, and it's not coming down anytime soon. If we don't address this issue our energy costs will skyrocket as more power plants will have to be built," said Anthony Rodriguez, spokesman for the Ohio Consumers Counsel.

"The best alternative is for consumers to be more energy efficient," he said. "Even though it will cost a small amount each month from January 2010 through the end of 2011, this will result in a significant savings of double that investment if customers fully participate in these energy-efficiency programs."

According to a news release from AEP Ohio, the company filed a plan with the PUCO on Thursday that would "...implement energy efficiency and demand reduction programs that could save consumers and businesses $631 million in reduced bills over the life of the program, result in 3,000 new jobs through 2011, and reduce power plant emissions."

The plan is part of AEP's response to Ohio Substitute Senate Bill 221, requiring investor-owned electric utilities to create programs that help customers conserve and reduce demand for electrical power.

S.B. 221 was signed into law by Gov. Ted Strickland earlier this year.

Terri Flora, spokeswoman for AEP Ohio in Gahanna, said the company began initiating a variety of energy efficiency programs in April of this year. Customers are encouraged to voluntarily participate in the programs.

"A big part of this is education," she said. "Some people think they need to make massive changes in their lifestyles to save energy, but a lot can be accomplished through relatively simple things like monitoring the use of air conditioning, heating, and appliances, or just turning off the lights when no one is using a room."

Flora added that the company has also instituted incentive programs like offering in-store discounts or coupons for the purchase of energy-efficient lighting fixtures, ceiling fans, LED holiday lights, and other products, including compact fluorescent light bulbs to replace less efficient incandescent lighting.

Weatherization and incentives to purchase major energy efficient appliances are among other future programs being considered by AEP.

"We're doing this incrementally to see what programs work best, and new programs will be added in following years to help customers use energy more efficiently," Flora said.

"This is something that has to be done, and energy conservation is the best alternative, but these energy efficiency programs have a cost," she said. "If we don't do this, new power plants will have to be built, which would cost much more."

Marietta resident John Scheve has had experience with similar energy-savings programs before.

"It sounds like a noble venture, but I'd have to know more details," he said. "I also own property in Florida, and Florida Power and Light periodically sends out information about how to save energy, and you get a rebate for more efficient use of energy.

"If the AEP plan is for something like that, it would be OK," Scheve said, adding that he also saved several hundred dollars on a recent air conditioner purchase in Florida because the appliance was energy efficient.

But Reno area resident Diana Merrow said her family has been practicing energy conservation and it hasn't made too much of a difference in her power bill.

"We're on a budget, and don't want any of our costs to go up, so we try to keep the lights off if no one is in the room, turn the air conditioner down in the summer, and use insulation and seal the windows, but I don't see a big change in my electric bill," she said.

"Everything seems to be going up (in cost), and I think these companies really need to be better regulated," Merrow added.

In March of this year the PUCO approved power rate increases of $7 a month in 2009, and another $6 per month in 2010 for the average AEP Ohio customer to cover rising fuel costs.

In addition to those increases, the PUCO also granted arrangements this year for the Ormet plant in Hannibal and Eramet Marietta to receive discounted electrical service.

Residential customers were expected to pay less than $2 on their monthly power bills to make up the difference for the Ormet discount.

The Eramet discount agreement, granted by the PUCO in October, was contingent upon capital investments and employment levels at the plant. But officials said the potential impact on customers was expected to be less than the increase caused by the Ormet deal.

Rodriguez said the plan AEP Ohio submitted to the PUCO was the result of a consolidated effort that included input from the power company, the Ohio Consumers' Counsel, Ohio Environmental Council, Sierra Club Ohio, Ohio Poverty Law Center and others.

"Everyone brought their professional experience to the table to develop a plan that would work and would be the most cost-effective in the long-term," Rodriguez said.

The AEP Ohio plan still has to receive approval from the state utilities commission, according to PUCO spokesman Matt Butler.

"I can't speculate on whether it will be approved or not," he said. "The commission is looking at the plan right now, but it's not on their weekly agenda at this time. And there are about four more meetings through the end of this year."

Butler said although AEP has requested a decision that will enable the company to include the proposed rider in January's power bills, he could not say whether the PUCO would meet the company's timeline.

He noted that because the two-year rate increase is being requested in the form of a rider to customers' bills, the usual public hearing would not be required.

"But customers can still submit written comments to the commission," he said.