In an effort to woo potential investors, AEP traveled to Tokyo, Japan in February for an investor relations dog-n-pony show. Early in their presentation, an AEP bullet point listed Ohio's regulator as being "supportive," but maybe that point should have been underscored as an understatement? AEP indicates the average 2011 return on equity for the industry was a stout 10.25 percent; while the S&P 500 recorded a lackluster 2 percent. But get this, for the same period AEP's total shareholder return was a whopping 20.8 percent. That said, one can only conclude AEP is revenue rich!
Having initially chased the Enron model, AEP attributes its success to a 2004 "re-dedication" towards a regulated business model, just a few years after Ohio had ushered in deregulation. Regardless, AEP's most revealing disclosure is that Ohioans are making a significant contribution to AEP's Gross Margin, or more specifically, Ohioans are paying way more than their fair share. Now pay close attention to this nugget of information, as it is imperative Ohioans comprehend these comparisons. AEP's presentation clearly outlines Ohioans contributed $52.0/MWH in 2011, while AEP's East Utilities contributed $41.1/MWH and their West Utilities contributed $32.5/MWH. This means Ohioans paid a 26.5 percent premium over the East, and a staggering 60.0 percent premium over the West. Also noteworthy is that AEP's 2012 guidance has Ohioans contributing even more!
All things considered, it is absolutely absurd AEP expects Ohioans to forego market opportunities for saving on electric spend, but instead, we are expected to remain "captive" customers impeded from accessing "competitive" markets. Paying an administratively set price of $255 per megawatt day for capacity, versus the $16 revealed by the market, is akin to extending AEP a "monopoly," and nobody on Planet Earth should understand that better than AEP and the PUCO. Again, the political nonsense underway in Columbus needs to end, and there is no better time than the present!
Ohioans are strongly encouraged to file complaints with the PUCO; collectively we can make a difference! Start your complaint by assigning the respective case numbers; 11-346-EL-SSO and 11-348-EL-SSO. Here is the PUCO's link: www.puc.state.oh.us/secure/PicForm/index.cfm?intype=complaint
Jim Ebert
Findlay
