Texas Commission approves SWEPCO Rate Increase


The Public Utility Commission of Texas has approved a base rate increase for Southwestern Electric Power Co., a unit of American Electric Power (Nasdaq: AEP).

The PUCT approved the increase in base rates to recover SWEPCO’s investments in generation, transmission and distribution facilities since 2016, plus increased operations and maintenance costs to provide reliable and safe service to Texas customers. The Commission also approved cost recovery for the Dolet Hills Power Plant, which was retired Dec. 31, 2021.

The bill for a Texas residential customer using 1,000 kilowatt-hours (kWh) will increase approximately $8.31 per month, or 8.48%. The increase will begin with bills issued March 1.

The overall increase includes new base rates, a surcharge to recover retroactive amounts for the base rate increase, and cost recovery for the retirement of the Dolet Hills Power Plant. By Texas law, new rates are retroactive to March 18, 2021. The surcharge for the retroactive amounts will be in effect for an estimated six months. The PUCT found the early retirement of Dolet Hills to be prudent and established cost recovery separate from base rates through a rate rider, estimated to be in effect through 2046, the previously PUCT-approved life for the plant.

For commercial, industrial, municipal and lighting rate classes, the new base rate impacts vary by rate class and usage characteristics.

“The base rate increase is necessary for SWEPCO to continue meeting customers’ expectations and to maintain and operate a strong, reliable electric system,” said SWEPCO President and Chief Operating Officer Malcolm Smoak.

“We recognize that customers are concerned about their energy costs, especially during the pandemic,” said Smoak. “We will continue to work with customers to help them stay on track with their electric bills.”

Base rates refer to the costs of building, maintaining and operating SWEPCO’s electric system, including power plants, transmission and distribution lines, and facilities to serve customers. Base rates do not include the fuel portion of the customer’s bill, which pays for fuel and purchased power and is passed through to customers with no profit to the company.

SWEPCO filed its request at the PUCT on Oct. 13, 2020. The PUCT decision authorized an annual increase of $41.6 million in its Nov. 18, 2021, order and Jan. 14, 2022, final order. SWEPCO serves 187,500 customers in Northeast Texas and the Texas Panhandle

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