AEP Ohio seeks electric rate increase to improve power grid

• AEP Ohio has requested a 2.14% base rate increase from the Public Utilities Commission of Ohio.
• The rate increase, which requires regulatory approval, would fund grid modernization and improvements.

American Electric Power of Ohio has asked the state to allow it to raise rates for its electric customers.

On Friday, AEP Ohio filed a request with the Public Utilities Commission of Ohio to increase base electricity rates by 2.14%, the company told The Dispatch. If approved, the increase will amount to a rise of $3.95 per month for a customer using 1,000 kilowatt hours.

The process to change a base rate includes hearings and testimony and could take more than a year, so if it’s approved it will be a while before customers see their monthly bills rise, Laura Arenschield, AEP Ohio director of communications said via email.

Related electric grid article: Ohio electric grid operator warns of system stress with expected summer demand surge

If the increase is approved, it would allow the electricity provider to invest in updates to the power grid, including replacing poles, wires and transformers and equipment that protects against outages, according to AEP Ohio.

”AEP Ohio understands that affordable power is important,” a press release from the company states. “We work hard to invest efficiently and get the most benefit for customers out of every dollar we spend.”

The pitch for a rate hike comes as Ohio leaders have grown increasingly concerned whether there is adequate power available to the state.

Ohio could face an energy shortfall within two years if something isn’t done to bolster the electrical grid the state relies on, according to a study by the Ohio Business Roundtable released in February. Without improvements by 2027, blackouts during severe weather could become more common, energy costs may increase and businesses considering a home in Ohio may look elsewhere, Pat Tiberi, chief executive officer of the Ohio Business Roundtable said at the time.

And if Ohio’s surge in data centers continues, the state could eat up so much electricity that demand for power in the Columbus region will be similar to all of Manhattan by 2030, according to AEP.

The last time AEP Ohio filed a request to increase its base rate was in 2020. But the company warned customers in April that some could see their bills increase this summer as well.

Depending on who residents get their electricity from, consumers could see their bills rise in June due to a jump in supply charges, according to AEP Ohio. This summer’s increase will come from the power generator rather than AEP Ohio, which will not profit off the charge.

For an average resident using 1,000 kilowatt-hours of electricity every month, this pass-through charge is expected to jump by around $27 per month, according to AEP Ohio. The summer hike is largely due to supply and demand of power generation.

The increase will only apply to customers who do not shop for their electricity supply from a competitive provider or who are not part of a governmental aggregation.

Dispatch investigative reporter Max Filby can be reached by email at mfilby@dispatch.com. Find him on X at the handle @MaxFilby or on Facebook at @ReporterMaxFilby.