Fort Wayne News-Sentinel

Story entered Wednesday, 03/17/1999

DAILY BUSINESS

AEP credits to average $42 this summer

Residential customers will get about $14 a month for three months if a settlement is approved.

By LYNNE McKENNA FRAZIER
The News@Sentinel

American Electric Power Co. customers will get a break in their electric bills this summer because of problems with its nuclear plant operations.

AEP will credit its Indiana residential customers an average of $14 a month during July, August and September -- for a total of $55 million -- if a proposed settlement is approved. The proposal was filed Tuesday jointly by the electric company and state and nonprofit agencies that sought the refund.

The agreement must be approved by the Indiana Utility Regulatory Commission, which is expected to hold a hearing on the proposal this month.

AEP was accused of overcharging customers for fuel because of the shutdown of its Donald C. Cook nuclear plant. The agreement includes a five-year freeze on the base rate AEP can charge.

Under the agreement, AEP customers will be charged for fuel as if Cook were operating, a ruling that keeps those costs well below the state average, said Mike Brian for AEP in Fort Wayne, the utility's Indiana operations base.

AEP welcomes the settlement, he said. "This gets the litigation and uncertainty behind us."

Customers will get back almost all the questionable fuel charges, said Anne E. Becker, Indiana's Utility Consumer Counselor.

"We are gratified to see AEP accept responsibility for the outage at the Cook nuclear plant," said Chris Williams, executive director of the Citizens Action Coalition.

Under the agreement, AEP will collect slightly more money for the eventual decommissioning of the Cook plant. The company also will be able to spread $150 million in charges for maintenance at the plant and $100 million in fuel charges over five years, lessening the impact on stockholders, Brian said.

The Cook plant in Bridgman, Mich., has been closed since September 1997, when problems with the cooling system arose during a routine safety check.

The loss of the cheaper nuclear power drove up AEP's fuel costs, which were passed on to its Indiana customers.

The Office of Utility Consumer Counselor, along with Citizens Action Coalition and Indiana Consumers for Fair Utility Rates, argued that those costs were the responsibility of AEP management and should not have been passed on to customers.

Tuesday's agreement was submitted to the IURC by all the parties involved in the case.

Industrial customers were represented by a private attorney.

The settlement affects all customers who do not buy electricity on the wholesale market, Brian said.

Cook's restart has been repeatedly delayed. Bob Powers, who recently took over as plant manager, has asked for a review of all engineering studies and other reports, Brian said.

That is to be completed by June, when a new schedule for starting up the plant again should be released.