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SWEPCO seeks 12.7 percent rate hike

By Ken Hedler
Dec. 17, 2016 at 4 a.m.


AEP Southwestern Electric Power Co. asked the state's Public Utility Commission on Friday to increase the company's rates by $69 million a year - or about 12.7 percent per customer.

SWEPCO, based in Shreveport, stated its primary need is for new revenue is to cover $34.4 million annually for additional investment in environmental controls in four coal-fired power plants to comply with new regulations of the Environmental Protection Agency. The plants are Welsh Plant units 1 and 3 in Pittsburg, Pirkey Plant in Hallsville, Dolet Hills in Mansfield, Louisiana, and Flink Creek in Gentry, Arkansas.

If SWEPCO prevails, residential customers using 1,000 kilowatt-hours per month would see an estimated increase from $99 to $109 per month, company spokesman Scott McCloud said. However, he added the typical home in East Texas uses an average of 1,285 kilowatt-hours a month.

City spokesman Shawn Hara said the city received a packet Friday from SWEPCO, and commented, "We will be reviewing it on behalf of our ratepayers."

SWEPCO also cited:

  • The need for $24.5 million for additional generation, transmission and distribution investment, and changes in operating costs to continue "delivering affordable, reliable and safe energy" to homes, businesses and communities.

  • $8 million for a change in transmission cost recovery to align with actual incurred regional transmission costs in the Southwest Power Pool, to help ensure reliability and access to affordable power through the regional transmission system.

  • And $2 million for additional vegetation management funding to clear transmission and distribution lines and to improve secure reliability, especially during storms.

"We work hard to provide high quality customer service while at the same time managing our costs and continuing to make needed investments in generation, transmission and distribution infrastructure," Venita McCellon-Allen, SWEPCO president and chief operating officer, said in a statement. "We recognize the impact that price increases can have on individuals, families and businesses. We believe our electric rates will continue to provide good value for the money."

SWEPCO serves 530,000 customers, including 184,000 in East Texas and the Panhandle, 230,000 in northwestern and central Louisiana and 116,000 in western Louisiana.

The Public Utility Commission approved a 6-percent rate increase from SWEPCO in March 2014 that generated about an extra $16.8 million annually, commission spokesman Terry Hadley said.

Longview, Kilgore, White Oak and other area cities joined in 2014 to legally fight SWEPCO's rate increase.

Hadley said consumers, businesses and other parties that oppose the proposed rate increase request may file a request to the commission for a public hearing. The state Office of Administrative Hearings would conduct the hearing, and an administrative law judge would forward a recommendation to the three Public Utility Commission commissioners, who would have the final say.

"This is a process that typically takes several months," Hadley said. "Ultimately, it is up to the three (appointed) commissioners to approve any rate change."

SWEPCO is part of American Electric Power, based in Columbus, Ohio, and one of the largest electric utilities in the country.

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