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Transcript of 1 American Electric Power Company Transmission Formula Rate AEP Appalachian Transmission Co., Inc....
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American Electric Power Company
Transmission Formula RateAEP Appalachian Transmission Co., Inc.
AEP Indiana Michigan Transmission Co., Inc.
AEP Kentucky Transmission Co., Inc.
AEP Ohio Transmission Co., Inc.
AEP West Virginia Transmission Co., Inc.
Annual Formula Rate Update
June 2012
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True-up Process
• Annual update for the Rate Year beginning July 1, 2012 through June 30, 2013
• True-up – Rates effective July 1, 2010 (billed January – June 2011) --
$0.41/MW Day
– Rates effective July 1, 2011 (billed July – December 2011) -- $1.36/MW Day
– Trued-up to Actual 2011 Cost Data with Average ending Ratebase Balances (2010-2011) -- $0.68/MW Day
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Regulatory Changes
• July 2011 FERC issued an order approving the internal corporate reorganization consummated on December 31, 2011 under which Columbus Southern Power Company (“CSP”) merged into Ohio Power Company (“Reorganization Transaction”).
• March 2012 AEP submitted for filing amendments to Attachment H-20 of the PJM Interconnection L.L.C. (“PJM”) Open Access Transmission Tariff (“PJM Tariff”) to incorporate proposed revisions to incorporate changes necessitated by the internal corporate reorganization.
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Status of State Regulatory Process
• West Virginia Transco: Issued an order on June 5, 2012--W Va Commission would approve with certain modifications – current evaluation in process.
• Appalachian Transco: Va Transco has been approved to enter into limited service agreements with AEPSC and APCo.
• Kentucky Transco: Awaiting final order by the KPSC.
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Annual Update 2012
• http://www.aep.com/about/codeofconduct/OASIS/TariffFilings/
Docket No. ER10-355-000, AEPTCo FERC Formula Rate Filing
• Annual Update 2012 - AEPTCo PJM
• Notice of Annual Filing (PDF)
• Formula Rate Update AEP Transmission Companies Summary (DOC)
• ATRR Summary of AEP Transmission Companies (XLS)
• Appalachian Transmission Company (XLS)
• Indiana Michigan Transmission Company (XLS)
• Kentucky Transmission Company (XLS)
• Ohio Transmission Company (XLS)
• West Virginia Transmission Company (XLS)
• TransCo NITS Attachment C (XLS)
• FERC Exclusion of State Formation Costs (XLS)
• ADIT TransCo Detail (XLS)
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Summary of Rates
Charge July 1, 20122011 FERC Form 1
(projected plant 2012)
July 1, 20112010 FERC Form 1
(projected plant 2011)
Change
Point-to Point Rate $/MW Month
$90.92 $36.75 $54.17
Schedule 12 $2,199,548 N/A $2,199,548
AEP East Zone
Network Service Peak Load
24,530.8 MW 23,492.3 MW 1,038.5MW
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Primary Drivers Change in Rate
• Increased capital spend in Ohio
• 4% increase in the East Zone Network Service Peak Load
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Revenue Requirement used to calculate the Existing Zonal ATRR for PJM OATT
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
Calendar Year
Virginia $153,300 $111,736
I&M $1,222,638 $2,787,822
KPCo $117,182 $146,026
OPCo $10,020,532 $27,235,255
West Virginia $183,347 $123,356
East Transco's $11,696,999 $30,404,195
2011 Projected 2012 Projected
TransCo's Revenue Requirement
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Gross Plant Investment – 2011 Projected vs.
2011 Actual Average Balance Gross Plant Investment
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
$90,000,000
Calendar Year
Virginia $0 $0
I&M $7,632,533 $4,029,966
KPCo $0 $0
OPCo $77,934,167 $38,518,862
West Virginia $0 $0
East Transco's $85,566,700 $42,548,828
2011 Projected 2011 True-Up
Gross Plant Investment InvestmentRequirement
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2012 Projected Capital Spend
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
$180,000,000
$200,000,000
Calendar Year
APTCo $7,500,000 $0 $0
IMTCo $3,720,000 $3,128,014 $18,325,850
KTCo $0 $0 $0
OHTCo $12,959,861 $74,770,454 $170,448,460
WTCo $5,635,000 $0 $0
TOTAL $29,814,861 $77,898,468 $188,774,310
2010 Projected 2011 Projected 2012 Projected
TransCo's Projected Plant Growth
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Revenue Requirement For PJM Socialized ‘Schedule 12’ Investment
Company/Project Investment
$
In-Service RTEP Revenue Requirement
$
I&M/
Jefferson 765kv line
5,231,516
2012 655,786
OPC/
Lima Sterling6,809,19
62012 747,660
OPC/
Wapakoneta-West Moulton
3,359,043
2011 386,386
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Summary Comparison
2011 Projected – 2011 True-up
Line 1 REVENUE REQUIREMENT Virginia I&M KPCo OPCo West Virginia East Transco's2 2011 Projected $153,300 $1,222,638 $117,182 $10,020,532 $183,347 $11,696,9993 2011 True-Up $111,993 $804,737 $138,961 $5,047,043 $121,707 $6,224,4414 True-Up Inc/(Dec) ($41,307) ($417,901) $21,779 ($4,973,489) ($61,640) ($5,472,558)5 Percentage Inc/(Dec) -26.95% -34.18% 18.59% -49.63% -33.62% -46.79%
6 GROSS INVESTMENT Virginia I&M KPCo OPCo West Virginia East Transco's7 2011 Projected $0 $7,632,533 $0 $77,934,167 $0 $85,566,7008 2011 True-Up $0 $4,029,966 $0 $38,518,862 $0 $42,548,8289 True-Up Inc/(Dec) $0 ($3,602,567) $0 ($39,415,305) $0 ($43,017,872)
10 Percentage Inc/(Dec) 0.00% -47.20% 0.00% -50.58% 0.00% -50.27%
11 NET INVESTMENT Virginia I&M KPCo OPCo West Virginia East Transco's12 2011 Projected $0 $7,591,647 $0 $77,646,358 $0 $85,238,00513 2011 True-Up $0 $4,014,917 $0 $38,413,947 $0 $42,428,86414 True-Up Inc/(Dec) $0 ($3,576,730) $0 ($39,232,411) $0 ($42,809,141)15 Percentage Inc/(Dec) 0.00% -47.11% 0.00% -50.53% 0.00% -50.22%
16 WORKING CAPITAL Virginia I&M KPCo OPCo West Virginia East Transco's17 2011 Projected $607 $1,857 $451 $1,424 $1,063 $5,40218 2011 True-Up $43 $16,278 $73 $33,778 $39 $50,21119 True-Up Inc/(Dec) ($564) $14,421 ($378) $32,354 ($1,024) $44,80920 Percentage Inc/(Dec) -92.92% 776.58% -83.81% 2272.05% -96.33% 829.49%
21 RATE BASE Virginia I&M KPCo OPCo West Virginia East Transco's22 2011 Projected $136,951 $7,570,943 ($28,732) $80,351,996 $98,343 $88,129,50123 2011 True-Up $76,511 $3,307,550 ($25,977) $29,062,757 $53,038 $32,473,87924 True-Up Inc/(Dec) ($60,440) ($4,263,393) $2,755 ($51,289,239) ($45,305) ($55,655,622)25 Percentage Inc/(Dec) -44.13% -56.31% -9.59% -63.83% -46.07% -63.15%
RATE BASE
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Summary Comparison2011 Projected – 2011 True-up (cont.)
Line 1 O&M EXPENSE Virginia I&M KPCo OPCo West Virginia East Transco's2 2011 Projected $109,685 $216,036 $93,556 $187,276 $144,210 $750,7633 2011 True-Up $82,995 $289,312 $121,867 $1,277,242 $95,590 $1,867,0064 True-Up Inc/(Dec) ($26,690) $73,276 $28,311 $1,089,966 ($48,620) $1,116,2435 Percentage Inc/(Dec) -24.33% 33.92% 30.26% 582.01% -33.71% 148.68%
Line 6 DEPRECIATION Virginia I&M KPCo OPCo West Virginia East Transco's7 2011 Projected $26,809 $67,866 $26,802 $314,593 $26,769 $462,8398 2011 True-Up $20,106 $72,806 $20,101 $264,172 $20,076 $397,2619 True-Up Inc/(Dec) ($6,703) $4,940 ($6,701) ($50,421) ($6,693) ($65,578)
10 Percentage Inc/(Dec) -25.00% 7.28% -25.00% -16.03% -25.00% -14.17%
Line 11 TAXES OTHER THAN INCOME Virginia I&M KPCo OPCo West Virginia East Transco's12 2011 Projected $0 $0 $350 $0 $50 $40013 2011 True-Up $0 $64,669 $0 $195,659 $0 $260,32814 True-Up Inc/(Dec) $0 $64,669 ($350) $195,659 ($50) $259,92815 Percentage Inc/(Dec) 0.00% -100.00% -100.00% 64982.00%
Line 16 INCOME TAXES Virginia I&M KPCo OPCo West Virginia East Transco's17 2011 Projected $4,961 $283,921 ($1,041) $2,568,975 $3,813 $2,860,62918 2011 True-Up $2,471 $100,404 ($827) $871,229 $1,590 $974,86719 True-Up Inc/(Dec) ($2,490) ($183,517) $214 ($1,697,746) ($2,223) ($1,885,762)20 Percentage Inc/(Dec) -50.19% -64.64% -20.56% -66.09% -58.30% -65.92%
EXPENSES
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Summary Comparison2011 Projected – 2011 True-up (cont.)
Line 1 RETURN ON RATE BASE Virginia I&M KPCo OPCo West Virginia East Transco's2 2011 Projected $11,845 $654,815 ($2,485) $6,949,689 $8,506 $7,622,3703 2011 True-Up $6,420 $277,546 ($2,180) $2,438,742 $4,451 $2,724,9794 True-Up Inc/(Dec) ($5,425) ($377,269) $305 ($4,510,947) ($4,055) ($4,897,391)5 Percentage Inc/(Dec) -45.80% -57.61% -12.27% -64.91% -47.67% -64.25%
6 WACC ON RATE BASE Virginia I&M KPCo OPCo West Virginia East Transco's7 2011 Projected 8.65% 8.65% 8.65% 8.65% 8.65% 8.65%8 2011 True-Up 8.39% 8.39% 8.39% 8.39% 8.39% 8.39%9 True-Up Inc/(Dec) -0.26% -0.26% -0.26% -0.26% -0.26% -0.26%
10 Percentage Inc/(Dec) -2.98% -2.98% -2.97% -2.98% -2.97% -2.98%
RETURN ON RATE BASE
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NITS True-UpFERC Case No. ER10-355PJM AEP Formula RateInterest Calculation on True-Up of NITS Revenue Requirement
AEP Zone MW Billing
Determinant Days in MonthProjected MW
Day Rate Revenues as BilledTrue-Up MW Day
RateRevenues @
True-Rate(A) (B) (C) (D)=(A)*(B)*(C ) (E) (F)=(A)*(B)*(E) (G)=(D)-(F) (H)=Quaterly Total (I)=Quarterly Average (J)=Prior Quarter (N) (K)=(I)+(J) (L) (M)=(K)*(L) (N)=(H)+(J)+(M)
January-11 23,492.30 31 0.41 296,839 0.68 495,582 (198,743) February-11 23,492.30 28 0.41 268,113 0.68 447,622 (179,509)
March-11 23,492.30 31 0.41 296,839 0.68 495,582 (198,743) (576,994) (192,331) - (192,331) 3.25% (1,563) (578,557) April-11 23,492.30 30 0.41 287,264 0.68 479,595 (192,331) May-11 23,492.30 31 0.41 296,839 0.68 495,582 (198,743) June-11 23,492.30 30 0.41 287,264 0.68 479,595 (192,331) (583,405) (194,468) (578,557) (773,026) 3.25% (6,281) (1,168,244) July-11 23,492.30 31 1.36 993,421 0.68 495,582 497,839
August-11 23,492.30 31 1.36 993,421 0.68 495,582 497,839 September-11 23,492.30 30 1.36 961,375 0.68 479,595 481,780 1,477,459 492,486 (1,168,244) (675,757) 3.25% (5,491) 303,724
October-11 23,492.30 31 1.36 993,421 0.68 495,582 497,839 November-11 23,492.30 30 1.36 961,375 0.68 479,595 481,780 December-11 23,492.30 31 1.36 993,421 0.68 495,582 497,839 1,477,459 492,486 303,724 796,210 3.25% 6,469 1,787,652
365 0.68 1,794,518 (6,866) 1,787,652 7,629,594 5,835,076
Interest Accrual From End of True-up Calendar Year Until Beginning Of Rate Year
Accrual Balance @ 12/31/2011 1,787,652 First Quarter Rate 3.25%
Accrual For First Quarter 14,525
Accrual Balance @ 3/31/2012 1,802,177 Second Quarter Rate 3.25%
Accrual For Second Quarter 14,643
Refund (Surcharge) Balance @ 6/30/2012 1,816,820
Interest To Accrue During Rate Year Starting 7/1/2012 (See Note 2) 32,142
Note 1: The Quarterly Average reflects in the calculation of interest the delay in recepit of cash due to timing of invoicing. Total to be Refunded (Surcharged) During Rate Year, Including Interest 1,848,962
One Twelfth of Refund (Surcharge) Amount During Rate Year 156,806
Refund Interest Rate per Part 18 FRC Sec
35.19aCumulative Excess (Under) Collection
Note 2: Calculation of rate year interest assumes refund will be made ratably over rate year at the interest rate pursuant to 18 C.F.R. 35.19a in effect during quarter preceding the Rate Year.
Basis of Interest Accrual
Prior Quarter Cumulative Refund
(Surcharge)Quarterly Interest
Cumulative Refund
(Surcharge)Year by Month
Ended:
Excess (Under) Collections at Quarter End
Average of Excess (Under) Collections
During Quarter (Note 1)
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Questions
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