Southwestern Electric Power Company (SWEPCO or the Company) publishes this notice that on August 31, 2011, it filed its Petition and Statement of Intent with the Public Utility Commission of Texas (PUCT or the Commission) in Docket No. 39708, and with those municipal authorities in its Texas service territory that have original jurisdiction over SWEPCO’s electric rates. This notice is being published in accordance with Section 36.103 of the Public Utility Regulatory Act and with Commission Procedural Rule 22.51(a)(1). SWEPCO is proposing to change its rates for electric service provided to all of its approximately 181,000 Texas retail customers in a two-step process beginning with the April 2012 billing month, which starts on March 29, 2012. All such customers and all classes of customers will be affected by this change.
STATEMENT OF INTENT TO CHANGE RATES
SWEPCO is proposing a three-step rate plan for the purpose of including the costs associated with the construction and operation of the John W. Turk, Jr. (Turk) power plant in Texas retail rates (Turk Rate Plan). The Turk Rate Plan will allow these costs to be included in rates in a three-step process, which will result in more gradual rate increases than would be the case absent adoption of the Turk Rate Plan. The first two steps of the three-step rate increase are presented for review in the current filing. The third step will be a general rate proceeding to be filed by SWEPCO after the Turk Power Plant is placed in service. SWEPCO proposes to increase its rates in this proceeding through the adoption of a rate rider designed to recover ongoing financing costs associated with the Company’s construction work in progress (CWIP) investment in the Turk Power Plant. SWEPCO’s proposed rate rider would increase SWEPCO’s rates in two steps. SWEPCO proposes that the first step rate change start with SWEPCO’s April 2012 billing month, which starts on March 29, 2012, and that the second step rate change start with SWEPCO’s November 2012 billing month, which starts on October 26, 2012. The effect of the requested rate increases on the Company’s revenues is stepped, as described above. The first step rate increase is designed to increase SWEPCO’s revenues over existing revenues by $10.05 million over the seven months the first step increase will be in effect. This increase is an annualized 3.8% increase, or a 7.3% increase, exclusive of fuel revenues. The second step rate increase is designed to increase SWEPCO’s revenues over existing revenues by approximately $46.66 million over the thirteen months that the second step is expected to be in effect. This increase is an additional annualized 5.7% increase for a total 9.5% increase over currently existing rates, or an additional 11.1% increase for a total annualized 18.4% increase, exclusive of fuel revenues, over currently existing rates. The impact of the rate change on various customer classes will vary from the overall impact described in this notice. The first step of the proposed Turk Rate Plan will cause the overall bill of a typical residential customer consuming 1,000 kWh of energy per month to increase by approximately $3.31, for a 4.2% increase, or a 6.7% increase, exclusive of the fuel portion of the bill. The second step of the proposed Turk Rate Path will cause the overall bill of a typical residential customer to increase approximately $4.00 above the first step increase, for a total of approximately $7.31. This is an additional 5.1% increase, for a total 9.3% increase over currently existing rates. Exclusive of the fuel portion of the bill, this is an additional 10.8% increase, for a total 17.5% increase over currently existing rates. SWEPCO has requested that its proposed rate change be approved effective October 4, 2011, with collection of the higher charges under the rider to begin with SWEPCO’s April 2012 billing month, as noted above. The proposed effective date is subject to suspension and extension by actions that may be taken by the Commission and other regulatory authorities.
DEFERRED ACCOUNTING
In addition to its proposed rate rider, SWEPCO is requesting that the Commission issue an accounting order permitting the Company to defer operation and maintenance expenses, carrying costs (above the level recovered through the proposed rate rider), and depreciation expense (along with a return on the deferred amount) into a regulatory asset account once the Turk power plant is placed in service. Such an accounting order would permit the Company to preserve these expenses for review in a future base rate case, but would not impact SWEPCO’s rates at this time.
PROPOSED REVISION OF TARIFFS
SWEPCO is not requesting a change in base rates. Rather, SWEPCO is requesting that the Commission approve a new tariff, the proposed rate rider discussed above. SWEPCO is not requesting revisions to any of its existing tariffs.
CONTACT INFORMATION
Persons with questions or who want further information on the application may contact SWEPCO at 428 Travis Street, Shreveport, Louisiana 71101, or call toll-free at (888) 216-3523 during normal business hours. A complete copy of the filing is available for inspection at the address listed in the previous sentence.
Persons who wish to intervene in or comment upon these proceedings should notify the Commission as soon as possible, as an intervention deadline will be imposed. A request to intervene or for further information should be mailed to the Public Utility Commission of Texas, P.O. Box 13326, Austin, Texas 78711-3326. Further information may also be obtained by calling the Public Utility Commission at (512) 936-7120 or (888) 782-8477. Hearing- and speechimpaired individuals with text telephones (TTY) may contact the Commission at (512) 936-7136. A request for intervention or for further information should refer to Docket No. 39708. Unless otherwise ordered by the presiding officer, motions to intervene will be due 45 days from the date SWEPCO filed its Petition and Statement of Intent with the Commission. The 45th day after SWEPCO filed its Petition and Statement of Intent with the Commission is October 15, 2011.
