COLUMBUS (AP) -- American Electric Power is proposing a rate reduction for Ohio customers beginning in the summer of 2015 -- one the state's ratepayer watchdog says may not go far enough.
The utility expects its electricity rates to fall by as much as 9 percent over the three-year period starting in June of 2015, which adds up to a monthly savings of around $9 per month for a typical household.
AEP's plan still needs approval from the Public Utilities Commission of Ohio. A decision is expected sometime this summer.
The lower rates are expected because of falling prices for electricity in wholesale market fueled by plentiful supplies and sluggish demand.
The Ohio Consumers' Counsel, who represents utility ratepayer interests, says the utility's rates are above market rates and would still be too high even with the reduction.
"There are 33 states that have residential electricity prices that are, on average, lower than electricity prices for consumers in Ohio," said Marty Berkowitz, a spokesman for the OCC office. "Of the four major Ohio electric utilities, AEP is one of the two utilities charging the highest rates to customers."
The office is still deciding whether the utility's proposal is enough of a decrease.
AEP, based in Columbus, provides electricity in Ohio to 1.5 million customers mainly in central, southeastern, eastern and northwestern Ohio.
The company said its rate proposal would not lower bills for those customers who buy electricity from competitive suppliers who operate within AEP's territory. Those rates should stay the same over the three years, AEP said.
AEP also wants the utilities commission to allow it to continue charging customers a fee for maintaining its operations. In addition, AEP proposed a temporary charge that would allow the company to cover the costs of unpaid bills through late payment charges for those who buy electricity from competitive suppliers.
Company spokeswoman Terri Flora told The Advocate newspaper in Newark that the idea would allow the company to offer budget or payment plans to those customers.
AEP could bill all of its utility customers if revenue from late payment charges does not cover the costs of the bad debt, Flora said. "We're not talking $5 or $10," she said. "We might be talking pennies."