Texas Commission Approves Southwestern Electric Power Co Rate Increase
The Public Utility Commission of Texas has approved a base rate increase for Southwestern Electric Power Company (American Electric Power). Southwestern Electric Power Company serves 187,500 customers in Northeast Texas and the Texas Panhandle.
Southwestern Electric Power Company orginally filed its request at the Public Utility Commission of Texas on October 13, 2020. The Public Utility Commission of Texas decision authorized an annual increase of $41.6 million in its order.
The Public Utility Commission of Texas approved the increase in base rates to recover Southwestern Electric Power Company’s investments in generation, transmission and distribution facilities since 2016, plus increased operations and maintenance costs to provide reliable and safe service to Texas customers. The Commission also approved cost recovery for the Dolet Hills Power Plant, which was retired Dec. 31, 2021.
The bill for a Texas residential customer using 1,000 kilowatt-hours (kWh) will increase approximately $8.31 per month, or 8.48%. The increase will begin with bills issued March 1.
The overall increase includes new base rates, a surcharge to recover retroactive amounts for the base rate increase, and cost recovery for the retirement of the Dolet Hills Power Plant. By Texas law, new rates are retroactive to March 18, 2021. The surcharge for the retroactive amounts will be in effect for an estimated six months. The Public Utility Commission of Texas found the early retirement of Dolet Hills to be prudent and established cost recovery separate from base rates through a rate rider, estimated to be in effect through 2046, the previously Public Utility Commission of Texas-approved life for the plant.
For commercial, industrial, municipal and lighting rate classes, the new base rate impacts vary by rate class and usage characteristics.
“The base rate increase is necessary for Southwestern Electric Power Company to continue meeting customers’ expectations and to maintain and operate a strong, reliable electric system,” said Southwestern Electric Power Company President and Chief Operating Officer Malcolm Smoak.
“We recognize that customers are concerned about their energy costs, especially during the pandemic,” said Smoak. “We will continue to work with customers to help them stay on track with their electric bills.”
Base rates refer to the costs of building, maintaining and operating Southwestern Electric Power Company’s electric system, including power plants, transmission and distribution lines, and facilities to serve customers. Base rates do not include the fuel portion of the customer’s bill, which pays for fuel and purchased power and is passed through to customers with no profit to the company.
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