Council to consider resolution denying AEP rate increase
May 14, 2017 at 8:42 p.m.
Updated May 15, 2017 at 6 a.m.
The Victoria City Council is expected to vote on a resolution that denies an increase in rates from AEP Texas Inc. during a meeting Tuesday.
Periodically, AEP, a major electric utility, is able to file for a statewide rate increase, which is referred to as the distribution cost recovery factor. The rate increase reflects AEP's calculations of its maintenance and repairs of distributions lines, which supply electricity to residences.
A portion of electricity bills covers electricity used, while another portion covers the power line the electricity travels through. The power line portion of the bill is regulated.
AEP distributes electricity to residences and businesses within Victoria and to cities across the state.
The rate increase submitted by AEP last month totaled more than $28 million statewide, which would impact all electric utility customers who live in Victoria if granted. The increase also has to be approved by the Public Utility Commission of Texas.
City Attorney Thomas Gwosdz, who is expected to present the resolution to the council Tuesday, said he was not sure how much a statewide increase would affect Victoria residents.
However, cities have the authority to object to the approval of those rates, he said. The city of Victoria, along with other cities serviced by AEP, have requested that AEP lower its rate.
"We've determined that those rates are excessive, and we are negotiating with AEP to have the rates reduced," Gwosdz said Friday.
The company has already agreed to reduce the rate increase by $3.5 million, he said.
The Public Utility Commission of Texas is expected to approve a negotiated rate once it is reached.