Dive Brief:
- The Public Utilities Commission of Ohio (PUCO) has ordered American Electric Power (AEP) to refund customers $6.9 million due to significantly excessive profits in 2010.
- AEP's Columbus Southern Power unit posted a $234 million profit with a 17.9% return on shareholder equity in 2010. PUCO staff recommended AEP pay $23 million.
- AEP said it should not pay anything as the combined profits of its Columbus and Ohio Power units were normal. The two units have since been merged. “We believe we did not over-earn, and we did not believe we had an excessive return,” said Terri Flora, AEP spokeswoman.
Dive Insight:
A 2008 Ohio law made it easier for utilities to raise rates but it also allowed for regulators to come after them if they post excessive profits. This is the second time the provision has been utilized. The first was when AEP was fined $43 million for its 2009 profits.