5/1/2019
AEP Texas files base rate review request reflecting investment needed to provide safe and reliable service to support growing Texas economy

AUSTIN, Texas, May 1, 2019 – AEP Texas today filed a request with the Public Utility Commission of Texas (PUCT) to adjust the transmission and distribution rates charged to retail electric providers (REPs).  The company filed its last base rate case in November 2006.

The rate request reflects the amounts that are charged to the REPs for the delivery of electricity over AEP Texas’ transmission and distribution lines. The AEP Texas rates are included as part of the electric bill a customer receives from the REP.  AEP Texas is seeking approval of a $38.3 million increase in base rate revenues.  This amount includes an $83 million income tax refund associated with the Tax Cuts and Jobs Act of 2017 (TCJA) that AEP Texas proposes to implement through a four-year Income Tax Refund Rider (ITR). 

In addition, this application seeks a reduction to AEP Texas’ transmission cost of service of approximately $3.16 million and a combined rate for the two divisions.  AEP Texas also is proposing a one-time transmission credit of $29 million associated with the effects of the TCJA.

“Providing safe and reliable electricity is AEP Texas’ mission,” said Judith E. Talavera, AEP Texas president and chief operating officer. “The continued growth in Texas, as well as the need to upgrade and maintain the existing transmission and distribution (T&D) infrastructure, has resulted in AEP Texas’ investment of nearly $6 billion in its T&D system since the last rate case.

“The State of Texas is fortunate to have a dynamic and diverse economy and much of the economic growth has been taking place throughout the AEP Texas service territory.” Talavera continued.   

The AEP Texas filing includes a proposal to consolidate rates for the company’s North and Central Divisions.  The AEP Texas North Division covers the west Texas service territory and includes the cities of Abilene, San Angelo, McCamey, Stamford, Marfa, Presidio and numerous other towns and communities.  The AEP Texas Central Division covers the south Texas service territory and includes the cities of Corpus Christi, Victoria, Kingsville, Bay City, McAllen, San Benito, Pharr, Refugio, Laredo and numerous other towns and communities.  

If the request is approved by the PUCT, the amounts charged to the REPs for a residential customer using 1,000 kWh a month of electricity in the AEP Texas North Division would decrease around $5.01 a month.  A customer with a retail plan that charges 12.5 cents per kWh would see their rate decrease to 12.0 cents per kWh, or a 4 percent decrease in their total bill, if their REP passes on the change in rates.    

If the request is approved by the PUCT, the amounts charged to the REPs for a residential customer using 1,000 kWh a month of electricity in the AEP Texas Central Division would increase around $4.75 a month. A customer with a retail plan that charges 12.5 cents per kWh would see their rate go to 12.97 cents per kWh, or a 3.8 percent increase in their total bill, if their REP passes on the change in rates.

The Transition to Competition charge scheduled to expire in October 2020 will result in an $8.35 reduction in charges billed to the REPs for residential customers using 1,000 kWh a month in Central Division, meaning that residential customers throughout the AEP Texas service territory ultimately should see a decrease in charges.   

AEP Texas is requesting a return on equity of 10.5 percent with a capital structure of approximately 55 percent debt/45 percent equity.

AEP Texas, a unit of American Electric Power, delivers electricity to over a million homes, businesses and industries in south and west Texas. AEP Texas provides regulated energy delivery service to consumers, regardless which retail electric provider they choose. The region headquarters is in Corpus Christi. For more information, visit aeptexas.com.

American Electric Power, based in Columbus, Ohio, is focused on building a smarter energy infrastructure and delivering new technologies and custom energy solutions to our customers. AEP’s approximately 18,000 employees operate and maintain the nation’s largest electricity transmission system and more than 219,000 miles of distribution lines to efficiently deliver safe, reliable power to nearly 5.4 million regulated customers in 11 states. AEP also is one of the nation’s largest electricity producers with more than 32,000 megawatts of diverse generating capacity, including more than 5,000 megawatts of renewable energy. AEP’s family of companies includes utilities AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana, east Texas and the Texas Panhandle). AEP also owns AEP Energy, AEP Energy Partners, AEP OnSite Partners, and AEP Renewables, which provide innovative competitive energy solutions nationwide. For more information, visit aep.com.

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Larry Jones
AEP Texas Corporate Communications
(512) 203-4916
lajones@aep.com

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