In re Fuel Adjustment Clauses for Columbus S. Power Co. & Ohio Power Co.
Annotate this CaseThis appeal stemmed from the Public Utilities Commission’s first annual review of the fuel-adjustment clause (FAC) mechanism that was part of the first electric security plan (ESP) for two American Electric Power operating companies, Columbus Southern Power and Ohio Power Company. The FAC allowed the companies to recover fuel costs for providing generation service as those costs were incurred without being required to file a new rate case. An auditor found that the companies had underrecovered fuel costs through the FAC in 2009. After review, the Commission concluded (1) all of the proceeds that AEP had received from a 2008 contract settlement agreement with a coal supplier should be offset against Ohio Power’s FAC underrecovery; and (2) only the share of the settlement proceeds allocable to Ohio retail customers must be credited. Ohio Power appealed, and Industrial Energy Users-Ohio (IEU) cross-appealed. The Supreme Court affirmed the Commission’s orders, holding that Ohio Power and IEU did not carry their burden of showing reversible error in the Commission’s orders.
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