AEP Ohio has announced a rate increase for customers who rely on the Standard Service Offer (SSO) for their electric generation supply. This change, effective from June 2023 through May 2024, is primarily due to increased generation supply prices resulting from recent competitive auctions.
According to AEP Ohio, the rate hike is a result of increased costs for energy supply companies to procure energy. Energy supply auctions play a crucial role in determining electricity rates for consumers, especially in regions like Ohio where customers can choose their electricity provider. AEP Ohio procures electricity for its SSO customers through these competitive auctions. Recent auctions held in November 2022 and March 2023 saw a significant uptick in generation supply costs due to factors like global demand, supply chain disruptions, and geopolitical tensions, including the war in Ukraine.
"These increased procurement costs must be passed on to consumers, leading to a projected 28% hike in the monthly bills of SSO customers from June 2023 to May 2024," said an AEP Ohio spokesperson. "A typical residential customer using 1,000 kilowatt-hours monthly will see their bill rise approximately 28%, from an average of $155 to about $198."
Customers who are part of a municipal aggregation program, enrolled in the Percentage of Income Payment Plan (PIPP), or who have individually chosen a different generation supplier will not be affected by this rate increase.
To help customers manage this transition, AEP Ohio has offered several avenues for relief and savings. These include the Average Monthly Payment Plan (AMP), which evens out payments across the year to avoid seasonal spikes, and Extended Payment Arrangements for those behind on payments. Additionally, eligible customers can consider Time-of-Use Rates, where adjusting power use to off-peak times can lead to savings.
One solution that homeowners can consider to mitigate the impact of the rate increase is going solar. "Solar panels convert sunlight into electricity that can be used to power your home, reducing the amount of energy you need to purchase from your utility provider," explained a solar energy expert. "By generating your own electricity, you can significantly decrease your reliance on the grid and, consequently, lower your monthly energy bills. With the impending 28% increase in electricity rates for SSO customers, the savings from solar power become even more substantial."
Furthermore, solar panels provide a degree of protection against future rate increases. Once installed, the cost of generating solar power remains relatively constant over time, primarily limited to maintenance costs. This stability contrasts with the volatility of energy prices in the broader market, influenced by factors such as global demand, supply chain issues, and geopolitical events.
Many utility companies, including AEP Ohio, offer net metering programs for residential customers who generate their own electricity from solar power. Net metering allows customers to feed excess energy back into the grid, offsetting the cost of electricity drawn from the utility. "Customers receive credits for the excess energy produced, providing additional savings and a quicker return on investment," added the solar energy expert.
Ohioans are also encouraged to take advantage of various federal, state, and local incentives, including tax credits, rebates, and financing programs, to reduce the upfront cost of solar panel installation and improve their return on investment.
The rate adjustment is set to commence in June 2023 and will remain in place until May 2024. For a detailed understanding of how this might affect your bill and to explore all available options, AEP Ohio encourages customers to reach out by phone at 800-672-2231, through their website, or using their social media channels.
While rate increases can be challenging, being informed and proactive can help homeowners mitigate their impact. By exploring energy-saving strategies like solar power and taking advantage of available assistance, homeowners can better navigate this upcoming change and potentially save on their energy bills.