COLUMBUS, Ohio, Dec. 27,
2023 /PRNewswire/ -- American Electric Power (Nasdaq:
AEP) subsidiaries Appalachian Power and Wheeling Power today filed
a settlement agreement with the Public Service Commission of
West Virginia (PSC) that addresses
the companies' Expanded Net Energy Cost (ENEC) cases. The agreement
outlines a process for recovering deferred fuel and purchased power
costs, major storm restoration expenses, power plant balances and
environmental compliance project expenses through
securitization.
The West Virginia Energy Users Group and the West Virginia Coal
Association joined Appalachian Power and Wheeling Power in signing
onto the agreement. The settlement is subject to review and
approval by the PSC.
"If approved by the Commission, this settlement agreement will
benefit our West Virginia
customers by spreading out the recovery of these necessary costs to
help keep customer bills affordable and support a reliable energy
system," said Peggy Simmons, AEP's
executive vice president of Utilities.
As part of the settlement, Appalachian Power and Wheeling Power
agreed to reduce their requested fuel deferral amount by
$50 million to minimize the impact on
customers. The agreement proposes to utilize West Virginia's utility securitization law to
address approximately $1.9 billion in
costs. This is a new option approved in the 2023 legislative
session, with broad support, to address customer affordability.
Securitization enables these costs to be recovered over a much
longer timeframe, mitigating the impact on customer bills.
Securitization will not affect the retirement of Appalachian
Power's and Wheeling Power's coal plants, and the companies intend
to run those plants, which benefit West
Virginia customers and support grid reliability, through the
end of their useful lives. The securitization plan will be filed by
Appalachian Power and Wheeling Power and will be subject to review
and approval by the PSC.
AEP is reaffirming the forecasted financial data previously
issued Nov. 10, 2023, relating to its
2024 operating earnings guidance, its projected 6%-7% long-term
earnings growth rate and its 14%-15% FFO/Debt target.
This report made by American Electric Power and its Registrant
Subsidiaries contains forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934. Although AEP
and each of its Registrant Subsidiaries believe that their
expectations are based on reasonable assumptions, any such
statements may be influenced by factors that could cause actual
outcomes and results to be materially different from those
projected. Among the factors that could cause actual results to
differ materially from those in the forward-looking statements are:
changes in economic conditions, electric market demand and
demographic patterns in AEP service territories; the impact of
pandemics and any associated disruption of AEP's business
operations due to impacts on economic or market conditions, costs
of compliance with potential government regulations, electricity
usage, supply chain issues, customers, service providers, vendors
and suppliers; the economic impact of increased global trade
tensions including the conflicts in Ukraine and the Middle East, and the adoption or expansion of
economic sanctions or trade restrictions; inflationary or
deflationary interest rate trends; volatility and disruptions in
the financial markets precipitated by any cause, including failure
to make progress on federal budget or debt ceiling matters,
particularly developments affecting the availability or cost of
capital to finance new capital projects and refinance existing
debt; the availability and cost of funds to finance working capital
and capital needs, particularly if expected sources of capital,
such as proceeds from the sale of assets or subsidiaries, do not
materialize, and during periods when the time lag between incurring
costs and recovery is long and the costs are material; decreased
demand for electricity; weather conditions, including storms and
drought conditions, and AEP's ability to recover significant storm
restoration costs; limitations or restrictions on the amounts and
types of insurance available to cover losses that might arise in
connection with natural disasters or operations; the cost of fuel
and its transportation, the creditworthiness and performance of
fuel suppliers and transporters and the cost of storing and
disposing of used fuel, including coal ash and spent nuclear fuel;
the availability of fuel and necessary generation capacity and the
performance of generation plants; AEP's ability to recover fuel and
other energy costs through regulated or competitive electric rates;
the ability to transition from fossil generation and the ability to
build or acquire renewable generation, transmission lines and
facilities (including the ability to obtain any necessary
regulatory approvals and permits) when needed at acceptable prices
and terms, including favorable tax treatment, and to recover those
costs; new legislation, litigation and government regulation,
including changes to tax laws and regulations, oversight of nuclear
generation, energy commodity trading and new or heightened
requirements for reduced emissions of sulfur, nitrogen, mercury,
carbon, soot or particulate matter and other substances that could
impact the continued operation, cost recovery, and/or profitability
of generation plants and related assets; the impact of federal tax
legislation on results of operations, financial condition, cash
flows or credit ratings; the risks associated with fuels used
before, during and after the generation of electricity and the
byproducts and wastes of such fuels, including coal ash and spent
nuclear fuel; timing and resolution of pending and future rate
cases, negotiations and other regulatory decisions, including rate
or other recovery of new investments in generation, distribution
and transmission service and environmental compliance; resolution
of litigation or regulatory proceedings or investigations; AEP's
ability to constrain operation and maintenance costs; prices and
demand for power generated and sold at wholesale; changes in
technology, particularly with respect to energy storage and new,
developing, alternative or distributed sources of generation; AEP's
ability to recover through rates any remaining unrecovered
investment in generation units that may be retired before the end
of their previously projected useful lives; volatility and changes
in markets for coal and other energy-related commodities,
particularly changes in the price of natural gas; the impact of
changing expectations and demands of customers, regulators,
investors and stakeholders, including heightened emphasis on
environmental, social and governance concerns; changes in utility
regulation and the allocation of costs within regional transmission
organizations, including ERCOT, PJM and SPP; changes in the
creditworthiness of the counterparties with contractual
arrangements, including participants in the energy trading market;
actions of rating agencies, including changes in the ratings of
debt; the impact of volatility in the capital markets on the value
of the investments held by AEP's pension, other postretirement
benefit plans, captive insurance entity and nuclear decommissioning
trust and the impact of such volatility on future funding
requirements; accounting standards periodically issued by
accounting standard-setting bodies; other risks and unforeseen
events, including wars and military conflicts, the effects of
terrorism (including increased security costs), embargoes,
wildfires, cyber security threats and other catastrophic events;
and the ability to attract and retain the requisite work force and
key personnel.
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SOURCE American Electric Power