AEP Ohio Rate Increase 2023 - Choose Your Supplier
AEP Ohio Default Utility Rates for 2023
Will your business be affected by the recent AEP Ohio rate increase? More importantly, do you know how your default electricity rates with your utilities are set?
The rates are set by auctions held by the utility working in accordance with the Public Utility Commission of Ohio (PUCO). In the state of Ohio, customers are given the option to choose between AEP Ohio or a Competitive Retail Energy Supplier (CRES) to provide their electric generation. If customers choose AEP Ohio, the company uses a competitive market auction to acquire generation supply.
During this process, energy supply companies submit their bids to offer energy supply to AEP Ohio customers at the lowest possible price for a specified time period. This generation supply is called the Standard Service Offer (SSO), and its rates are updated every June.
An independent monitor oversees the competitive auction process that determines the SSO rate, which is approved by the Public Utilities Commission of Ohio. AEP Ohio is obligated by law to pass on the energy supply cost to its customers without any markup.
This rate hike will affect AEP Ohio customers in cities like Columbus, OH, the state capital, and surrounding cities. If you’re a business owner in Columbus, OH, and you’re not locked in with a third party energy supplier (ie: Direct Energy, Constellation Energy, AEP Energy (Retail), or IGS Energy to name a few), then you’re currently on a default rate with the local utility, paying a rate between $0.055/kWh - $0.072/kWh.
Effective June 2023, these rates are scheduled to increase to a rate of $0.10269/kWh.
AEP held their auctions twice with their first tranche hedged November 1, 2022 with 45% of the load at a rate of $119.98/MWh ($0.11998/kWh.)
The second tranche hedged recently on March 7,2023 with the remaining 55% at a rate of $88.55/MWh ($0.08855/kWh.)
See below for Auction results:
When you look at their weighted-average rate, you have an actual rate of $0.10269/kWh, which will be the average price-to-compare (PTC) in the AEP utilities. The weighted-average-rate is broken down below:
If you have yet to secure your electricity rates and wish to have a transparent, open-book pricing model on the wholesale electricity market, we can assist you in taking proactive steps to protect your business from AEP's anticipated rate hike. Please don't hesitate to contact us for more information on how we can help you.
For a detailed utility territory map of AEP Ohio, please take a look at the two territories below or visit the PUCO
Electric Certified Territories Map.
AEP Ohio suffered significant damage to its transmission system due to severe storms several months ago, leading to power outages in Columbus neighborhoods. As a result, AEP is now requesting additional funding from its customers to upgrade its infrastructure and replace aging equipment. In exchange for this funding, AEP has proposed investing $2.2 billion over six years to improve the reliability of the grid and launch pilot programs that could serve as backup power sources during local outages. According to Marc Reitter, the president and chief operating officer of AEP Ohio, this proposal outlines the company's plan to make electric grid investments that will strengthen its ability to provide reliable power to customers.
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