SWEPCO Requests Texas Rate Hike of Nearly 13%

Southwestern Electric Power Company (SWEPCO), a unit of American Electric Power (AEP), submitted a request (Docket No. 45524) to the Public Utility Commission of Texas (PUCT) to increase retail base rates for its 184,000 customers in East Texas and the Panhandle by approximately $69 million annually, the utility announced on December 16.

If approved by the commission, overall rates would increase annually by an average of about 12.7 percent. This, SWEPCO explained, represents the net amount of the proposed annual base rate increase of $105.9 million – minus $36.9 million for existing transmission and distribution charges that currently are shown as line items on customers’ bills, but will be moved to base rates.

Residential customers using 1,000 kilowatt-hours (kWh) per month would see an estimated increase of $12.67, or 13 percent – or in an actual bottom line of between $99 to $109 per month, company spokesperson Scott McCloud told the local Longview News-Journal on December 16.

According to the utility, the primary need for new revenue, the filing said, is to cover $34.4 million annually for additional investment in environmental controls at four major power plants. The investments are necessary to comply with (pre-President Trump) U.S. Environmental Protection Agency (EPA) regulations.

Specifically, the request comprises four major components:

  • $34.4 million for new environmental controls at four power plants to comply with EPA mandates – Welsh Plant Units 1 and 3 in Pittsburg, Texas; Pirkey Plant in Hallsville, Texas; Dolet Hills Plant in Mansfield, Louisiana.; and Flint Creek Plant in Gentry, Arkansas;
  • $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;
  • $2 million for additional vegetation management dollars to clear transmission and distribution lines and to improve service reliability, especially during storms; AND.
  • $24.5 million for additional generation, transmission, and distribution investments.

“The goal is always to serve Texas customers with a strong electric system that provides affordable, reliable and safe energy,” said SWEPCO CEO Venita McCellon-Allen, adding, “After investing nearly $700 million to fulfill new federal mandates, we believe SWEPCO has responsibly met these environmental and financial challenges in order to maintain a diverse energy mix with reliable 24/7 power sources serving our customers.

“Even with this proposed increase, SWEPCO rates will be close to the current state average for utilities serving the regulated parts of the state, and still well below the national average,” McCellon-Allen said.

If approved, the new rates could go into effect in mid-to late 2017.

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