American Electric Power wants its Ohio customers to pay $61.8 million to cover the cost of damage caused by three violent storms last June and July. There’s a lot at stake for all Ohioans in that record request, which is before the Public Utilities Commission of Ohio.
If the commission authorizes the temporary rate increase AEP seeks, it also should use this case to require utilities to take proactive measures to help avoid weather-related damages. Otherwise, the economic impact on Ohio homes and businesses will grow.
AEP could buy more private insurance, bury more power lines, and develop a more regular tree-trimming schedule to mitigate the expense of storm damage. Commission members could instruct the Columbus-based utility to examine its staffing needs: AEP spent $58.3 million on emergency pay and accommodations for workers from other companies who came to its service territory after the storms to help restore power.
AEP argues it could have done little to prepare for winds in excess of 80 miles an hour, as one of the storms reached. But utilities would have more incentive to take proactive measures if they knew they couldn’t pass along the entire bill for storm damage to customers.
AEP’s proposal would increase rates by about 2 percent for a year — roughly $3 a month for a typical household. The utility got PUCO to approve a $30 million pass-through — the current record — for damage caused by Hurricane Ike in 2008.
Major storms can cripple a region and deprive customers of electricity for days, even weeks. Such power outages typically occur in the summer, when demand peaks. They can range from annoying to life-threatening.
Utility customers shouldn’t be expected merely to write bigger checks when storm damage occurs. PUCO should make sure that all Ohio utilities exercise due diligence to prevent or reduce storm damage.