June 15, 2012

Update:  On June 13, 2012, AEP-Ohio filed rebuttal testimony for William Allen and William Avera. In Mr. Allen’s rebuttal, he makes very similar arguments as before, for instance that: 1) several parties, including OMAEG witnesses, inaccurately stated that the retail stability rider (“RSR”) provides a guaranteed 10.5% return on equity (“ROE”) for AEP-Ohio; 2) the proposed distribution investment rider (“DIR”) should not be modified to include an adjustment for accumulated deferred federal income taxes (“ADFIT”), as suggested by PUCO Staff; 3) the two-tier capacity pricing structure is not confusing as supported by the increase in customer shopping; and, 4) AEP-Ohio will be financially harmed if it is required to provide capacity to CRES providers at RPM rates and the RSR is eliminated. Mr. Avera’s rebuttal testimony attempts to justify AEP-Ohio’s ROE by proposing various economic methods for calculating AEP-Ohio’s ROE. The AEP-Ohio rebuttal witnesses will be subject to cross examination on Friday, June 15, 2012. Then, the attorney examiners will set the remaining deadlines for briefs, which will be followed by oral arguments and a Commission decision on the merits.

Additionally this week, we reviewed the settlement proposal being led by FirstEnergy Solutions and participated in a conference call to discuss feedback from the OMAEG. At this time, there is little support of the proposal and without some overwhelming increase in support, the concept will be abandoned altogether.