Public Service Company of Oklahoma (PSO), a subsidiary of American Electric Power (NYSE: AEP), today filed with the Oklahoma Corporation Commission (OCC) an application seeking a $132.6 million increase in the Company’s base – or nonfuel – rates.  This represents an 8.9 percent increase in total rates.
 
Calling today’s filing “critical,” PSO President and Chief Operating Officer Stuart Solomon said, “There are two primary reasons behind this proposal: first, the significant investments in new and existing electric facilities we’ve already made to make sure we can continue to serve new customers and meet increases in electricity demands; and second, the continued increases in the costs of operating and maintaining our system, both of which are necessary to provide safe and reliable electric service.
 
“We understand the challenges that increases in electric costs have on our customers who are already facing increases in the prices of other necessities, such as gasoline and groceries,” said Solomon. 
 
“We’re especially sensitive to challenges faced by lower income customers, and we will be reaching out to stakeholders to develop a proposal within 90 days on how to provide assistance for those customers,” he said.
 
“The bottom line is, PSO’s current rates do not cover its costs,” said Solomon.  “PSO has invested hundreds of millions of dollars and, at the same time, the costs of our operations have increased significantly over expense levels that are now included in rates.  We must make these investments and incur these costs on an ongoing basis in order to keep the lights on for our customers.”
 
The proposal is to increase base rates. Base rates cover PSO’s costs, except for fuel, including the costs of investments in electric assets, operating and maintenance costs of equipment and facilities, customer service and reliability-related expenses, taxes and administrative costs.
 
The impact on a customer’s bill from the proposed increase varies, depending on the customer’s usage levels and customer class.  Residential customers would see an increase of around 11 percent in their monthly bill. 
 
Solomon said the company works hard “to hold the line on costs in the midst of some very large increases in the costs of virtually everything that is purchased to provide safe, responsive and reliable service.”
 
PSO said that while electricity costs have increased, its prices – even with the proposed increase included – remain at or below national averages.
 
“We recognize we provide a valuable and essential service and we’re making sure we can provide the reliable electricity that our customers want and deserve,” said Solomon.  “The investments we’ve made in our electric system and our facilities will help us to meet the growing demands for electricity today and help us prepare for our customers’ future needs for electricity.”
 
By law, the OCC has 180 days to rule on PSO’s request, so any changes to base rates would likely not take effect until after the beginning of next year.   
 
PSO, a unit of AEP, is an electric utility company serving approximately 525,000 customers in eastern and southwestern Oklahoma.  Based in Tulsa, PSO has 4,400 megawatts of generating capacity, and is the largest provider of wind energy in the state.
News releases and other information about PSO can be found on the World Wide Web at www.PSOklahoma.com.
 
American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP’s transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP’s headquarters are in Columbus, Ohio.
 
This report made by American Electric Power and its Registrant Subsidiaries contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the registrants believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: electric load and customer growth; weather conditions, including storms; available sources and costs of, and transportation for, fuels and the creditworthiness and performance of fuel suppliers and transporters; availability of generating capacity and the performance of AEP’s generating plants; AEP’s ability to recover regulatory assets and stranded costs in connection with deregulation; AEP’s ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; AEP’s ability to build or acquire generating capacity (including the company’s ability to obtain any necessary regulatory approvals and permits) when needed at acceptable prices and terms and to recover those costs through applicable rate cases or competitive rates; new legislation, litigation and government regulation including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances; timing and resolution of pending and future rate cases, negotiations and other regulatory decisions (including rate or other recovery of new investments in generation, distribution and transmission service and environmental compliance); resolution of litigation (including disputes arising from the bankruptcy of Enron Corp. and related matters); AEP’s ability to constrain operation and maintenance costs; the economic climate and growth in AEP’s service territory and changes in market demand and demographic patterns; inflationary and interest rate trends; volatility in the financial markets, particularly developments affecting the availability of capital on reasonable terms and developments impairing AEP’s ability to refinance existing debt at attractive rates; AEP’s ability to develop and execute a strategy based on a view regarding prices of electricity, natural gas and other energy-related commodities; changes in the creditworthiness of the counterparties with whom AEP has contractual arrangements, including participants in the energy trading market; actions of rating agencies, including changes in the ratings of debt; volatility and changes in markets for electricity, natural gas, coal, nuclear fuel and other energy-related commodities; changes in utility regulation, including the potential for new legislation in Ohio and the allocation of costs within regional transmission organizations; accounting pronouncements periodically issued by accounting standard-setting bodies; the impact of volatility in the capital markets on the value of the investments held by AEP’s pension, other postretirement benefit plans and nuclear decommissioning trust; prices for power that AEP generates and sells at wholesale; changes in technology, particularly with respect to new, developing or alternative sources of generation; other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.