2011 True-up

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American Electric Power Company
Transmission Formula Rate
AEP 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
1
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
2
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.
3
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.
4
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)
5
Summary of Rates
Charge
Point-to Point Rate
$/MW Month
Schedule 12
AEP East Zone
Network Service Peak
Load
July 1, 2012
July 1, 2011
2011 FERC Form 1
(projected plant 2012)
2010 FERC Form 1
(projected plant 2011)
Change
$90.92
$36.75
$54.17
$2,199,548
N/A
$2,199,548
24,530.8 MW
23,492.3 MW
1,038.5MW
6
Primary Drivers
Change in Rate
• Increased capital spend in Ohio
• 4% increase in the East Zone Network Service
Peak Load
7
Revenue Requirement used to calculate the Existing
Zonal ATRR for PJM OATT
TransCo's Revenue Requirement
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
Virginia
2011 Projected
2012 Projected
$153,300
$111,736
$1,222,638
$2,787,822
KPCo
$117,182
$146,026
OPCo
I&M
$10,020,532
$27,235,255
West Virginia
$183,347
$123,356
East Transco's
$11,696,999
$30,404,195
Calendar Year
8
Gross Plant Investment – 2011 Projected vs.
2011 Actual Average Balance Gross Plant Investment
Gross Plant Investment
InvestmentRequirement
$90,000,000
$80,000,000
$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
$0
Virginia
I&M
2011 Projected
2011 True-Up
$0
$0
$7,632,533
$4,029,966
KPCo
$0
$0
OPCo
$77,934,167
$38,518,862
West Virginia
East Transco's
$0
$0
$85,566,700
$42,548,828
Calendar Year
9
2012 Projected Capital Spend
TransCo's Projected Plant Growth
$200,000,000
$180,000,000
$160,000,000
$140,000,000
$120,000,000
$100,000,000
$80,000,000
$60,000,000
$40,000,000
$20,000,000
$0
2010 Projected
2011 Projected
2012 Projected
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
Calendar Year
10
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 Sterling
6,809,196
2012
747,660
OPC/
WapakonetaWest Moulton
3,359,043
2011
386,386
11
Summary Comparison
2011 Projected – 2011 True-up
RATE BASE
Line
1
2
3
4
5
REVENUE REQUIREMENT
2011 Projected
2011 True-Up
True-Up Inc/(Dec)
Percentage Inc/(Dec)
Virginia
$153,300
$111,993
($41,307)
-26.95%
6
7
8
9
10
GROSS INVESTMENT
2011 Projected
2011 True-Up
True-Up Inc/(Dec)
Percentage Inc/(Dec)
Virginia
11
12
13
14
15
NET INVESTMENT
2011 Projected
2011 True-Up
True-Up Inc/(Dec)
Percentage Inc/(Dec)
Virginia
16
17
18
19
20
21
22
23
24
25
I&M
$1,222,638
$804,737
($417,901)
-34.18%
KPCo
$117,182
$138,961
$21,779
18.59%
OPCo
$10,020,532
$5,047,043
($4,973,489)
-49.63%
West Virginia
$183,347
$121,707
($61,640)
-33.62%
East Transco's
$11,696,999
$6,224,441
($5,472,558)
-46.79%
OPCo
$77,934,167
$38,518,862
($39,415,305)
-50.58%
West Virginia
$0
$0
$0
0.00%
East Transco's
$85,566,700
$42,548,828
($43,017,872)
-50.27%
$0
$0
$0
0.00%
OPCo
$77,646,358
$38,413,947
($39,232,411)
-50.53%
West Virginia
$0
$0
$0
0.00%
East Transco's
$85,238,005
$42,428,864
($42,809,141)
-50.22%
I&M
$7,632,533
$4,029,966
($3,602,567)
-47.20%
KPCo
I&M
$7,591,647
$4,014,917
($3,576,730)
-47.11%
KPCo
$0
$0
$0
0.00%
WORKING CAPITAL
2011 Projected
2011 True-Up
True-Up Inc/(Dec)
Percentage Inc/(Dec)
Virginia
$607
$43
($564)
-92.92%
I&M
$1,857
$16,278
$14,421
776.58%
KPCo
$451
$73
($378)
-83.81%
OPCo
$1,424
$33,778
$32,354
2272.05%
West Virginia
$1,063
$39
($1,024)
-96.33%
East Transco's
$5,402
$50,211
$44,809
829.49%
RATE BASE
Virginia
$136,951
$76,511
($60,440)
-44.13%
I&M
$7,570,943
$3,307,550
($4,263,393)
-56.31%
KPCo
($28,732)
($25,977)
$2,755
-9.59%
OPCo
$80,351,996
$29,062,757
($51,289,239)
-63.83%
West Virginia
$98,343
$53,038
($45,305)
-46.07%
East Transco's
$88,129,501
$32,473,879
($55,655,622)
-63.15%
2011 Projected
2011 True-Up
True-Up Inc/(Dec)
Percentage Inc/(Dec)
$0
$0
$0
0.00%
$0
$0
$0
0.00%
12
Summary Comparison
2011 Projected – 2011 True-up (cont.)
EXPENSES
Line
1
2
3
4
5
Line
6
7
8
9
10
Line
11
12
13
14
15
Line
16
17
18
19
20
O&M EXPENSE
Virginia
$109,685
$82,995
($26,690)
-24.33%
I&M
$216,036
$289,312
$73,276
33.92%
KPCo
$93,556
$121,867
$28,311
30.26%
OPCo
$187,276
$1,277,242
$1,089,966
582.01%
West Virginia
$144,210
$95,590
($48,620)
-33.71%
East Transco's
$750,763
$1,867,006
$1,116,243
148.68%
Virginia
$26,809
$20,106
($6,703)
-25.00%
I&M
$67,866
$72,806
$4,940
7.28%
KPCo
$26,802
$20,101
($6,701)
-25.00%
OPCo
$314,593
$264,172
($50,421)
-16.03%
West Virginia
$26,769
$20,076
($6,693)
-25.00%
East Transco's
$462,839
$397,261
($65,578)
-14.17%
TAXES OTHER THAN INCOME
2011 Projected
2011 True-Up
True-Up Inc/(Dec)
Percentage Inc/(Dec)
Virginia
I&M
KPCo
$350
$0
($350)
-100.00%
OPCo
$0
$64,669
$64,669
West Virginia
$50
$0
($50)
-100.00%
East Transco's
$400
$260,328
$259,928
64982.00%
INCOME TAXES
Virginia
$4,961
$2,471
($2,490)
-50.19%
I&M
$283,921
$100,404
($183,517)
-64.64%
KPCo
($1,041)
($827)
$214
-20.56%
OPCo
$2,568,975
$871,229
($1,697,746)
-66.09%
West Virginia
$3,813
$1,590
($2,223)
-58.30%
East Transco's
$2,860,629
$974,867
($1,885,762)
-65.92%
2011 Projected
2011 True-Up
True-Up Inc/(Dec)
Percentage Inc/(Dec)
DEPRECIATION
2011 Projected
2011 True-Up
True-Up Inc/(Dec)
Percentage Inc/(Dec)
2011 Projected
2011 True-Up
True-Up Inc/(Dec)
Percentage Inc/(Dec)
$0
$0
$0
0.00%
$0
$195,659
$195,659
13
Summary Comparison
2011 Projected – 2011 True-up (cont.)
RETURN ON RATE BASE
Line
1
2
3
4
5
RETURN ON RATE BASE
2011 Projected
2011 True-Up
True-Up Inc/(Dec)
Percentage Inc/(Dec)
Virginia
$11,845
$6,420
($5,425)
-45.80%
I&M
$654,815
$277,546
($377,269)
-57.61%
KPCo
($2,485)
($2,180)
$305
-12.27%
OPCo
$6,949,689
$2,438,742
($4,510,947)
-64.91%
West Virginia
$8,506
$4,451
($4,055)
-47.67%
East Transco's
$7,622,370
$2,724,979
($4,897,391)
-64.25%
6
7
8
9
10
WACC ON RATE BASE
2011 Projected
2011 True-Up
True-Up Inc/(Dec)
Percentage Inc/(Dec)
Virginia
8.65%
8.39%
-0.26%
-2.98%
I&M
KPCo
8.65%
8.39%
-0.26%
-2.97%
OPCo
8.65%
8.39%
-0.26%
-2.98%
West Virginia
8.65%
8.39%
-0.26%
-2.97%
East Transco's
8.65%
8.39%
-0.26%
-2.98%
8.65%
8.39%
-0.26%
-2.98%
14
NITS True-Up
FERC Case No. ER10-355
PJM AEP Formula Rate
Interest Calculation on True-Up of NITS Revenue Requirement
AEP Zone MW
Billing
Determinant Days in Month
(A)
(B)
January-11
23,492.30
31
February-11
23,492.30
28
March-11
23,492.30
31
April-11
23,492.30
30
May-11
23,492.30
31
June-11
23,492.30
30
July-11
23,492.30
31
August-11
23,492.30
31
September-11
23,492.30
30
October-11
23,492.30
31
November-11
23,492.30
30
December-11
23,492.30
31
Year by Month
Ended:
Projected MW
Day Rate
(C)
0.41
0.41
0.41
0.41
0.41
0.41
1.36
1.36
1.36
1.36
1.36
1.36
Revenues as Billed
(D)=(A)*(B)*(C )
296,839
268,113
296,839
287,264
296,839
287,264
993,421
993,421
961,375
993,421
961,375
993,421
365
True-Up MW Day Revenues @
Rate
True-Rate
(E)
(F)=(A)*(B)*(E)
0.68
495,582
0.68
447,622
0.68
495,582
0.68
479,595
0.68
495,582
0.68
479,595
0.68
495,582
0.68
495,582
0.68
479,595
0.68
495,582
0.68
479,595
0.68
495,582
0.68
7,629,594
Refund Interest
Excess (Under)
Average of Excess
Prior Quarter
Rate per Part
Collections at
Cumulative Excess
(Under) Collections
Cumulative Refund Basis of Interest
18 FRC Sec
Quarter End
(Under) Collection During Quarter (Note 1)
(Surcharge)
Accrual
35.19a
(G)=(D)-(F)
(H)=Quaterly Total (I)=Quarterly Average (J)=Prior Quarter (N)
(K)=(I)+(J)
(L)
(198,743)
(179,509)
(198,743)
(576,994)
(192,331)
(192,331)
3.25%
(192,331)
(198,743)
(192,331)
(583,405)
(194,468)
(578,557)
(773,026)
3.25%
497,839
497,839
481,780
1,477,459
492,486
(1,168,244)
(675,757)
3.25%
497,839
481,780
497,839
1,477,459
492,486
303,724
796,210
3.25%
1,794,518
Quarterly
Interest
(M)=(K)*(L)
Cumulative
Refund
(Surcharge)
(N)=(H)+(J)+(M)
(1,563)
(578,557)
(6,281)
(1,168,244)
(5,491)
303,724
6,469
1,787,652
(6,866)
1,787,652
5,835,076
Interest Accrual From End of True-up Calendar Year Until Beginning Of Rate Year
Accrual Balance @ 12/31/2011
First Quarter Rate
Accrual For First Quarter
1,787,652
3.25%
Accrual Balance @ 3/31/2012
Second Quarter Rate
Accrual For Second Quarter
1,802,177
3.25%
Refund (Surcharge) Balance @ 6/30/2012
Interest To Accrue During Rate Year Starting 7/1/2012 (See Note 2)
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
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.
One Twelfth of Refund (Surcharge) Amount During Rate Year
14,525
14,643
1,816,820
32,142
1,848,962
156,806
15
Questions
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