Electric ratepayer Peine filed her Formal Challenge to American Electric Power Service Corporation’s 2013 Formula Rate Annual Update with the FERC on Wednesday. Her examination of transmission rates, conducted under federal transparency rules, revealed AEP has improperly charged Arkansas ratepayers for general advertising and promotional expenses, charitable donations and related expenses, economic development expenses unrelated to transmission, lobbying expenses, merger expenses, and other non-transmission expenses totaling $92,511. The complaint asks that FERC grant the challenge and order refunds to ratepayers of amounts wrongly included in rates.
According to Peine, “The problem has been that no one reviews these FERC filings on a micro-level to determine if unallowable expenses are included.”
AEP/SWEPCO has already acknowledged over $16,000 in wrongful charges as a result of Peine’s discovery efforts, and has made provisions to credit ratepayers for this amount. However, Peine contends that an additional $95K was also wrongly charged to electric customers in their monthly bills and has not yet been refunded.
The total includes expenses such as lunch with Larry Smith, mayor of Cave Springs, and others in November 2012 while presenting a big-fat-check to the Illinois River Watershed Partnership for the development of a 30-acre watershed sanctuary at Cave Springs. Mayor Smith later gave testimony before the APSC that SWEPCO’s preferred route 33 is perfectly reasonable, even though it would damage the Trail of Tears and National Military Park at Pea Ridge, and that the alternate route proposed to pass through his own city was not reasonable.
Other corporate expenses incorrectly recovered from all AEP ratepayers, including its Arkansas transmission subsidiaries, were expenses for AEP’s “Lemonade Stand” TV commercial that AEP ran during a particularly nasty Ohio regulatory battle with rival FirstEnergy in 2012. The commercial attempted to influence the Public Utility Commission of Ohio’s decision in a case involving AEP’s corporate reorganization to comply with Ohio’s electric deregulation laws.
Oh... ho ho ho... the Lemonade Ad?