Dive Brief:

• The Ohio Supreme Court has ruled American Electric Power (AEP) cannot collect on disputed fuel costs related to a 2009 generation deal.
• Utility regulators had initially determined that all of a $71.6 million fuel termination settlement should be credited to ratepayers, but on appeal had allowed AEP to retain some of that amount.
• Judges ruled unanimously that AEP was wrong in trying to keep the proceeds related to the fuel contract.

Dive Insight:

This is a complicated case that involves a rate stabilization arrangement in some years and a fuel recovery charge in others, but the upshot is that the Ohio Supreme Court unanimously determined that utility regulators did not overstep their bounds when they determined the AEP companies could not hold on to all of $71.6 million related to a fuel contract settlement. (AEP was operating as Ohio Power and Columbus Southern Power.)

“The critical flaw in Ohio Power’s arguments is that it wants the commission (and now this court) to consider the 2008 settlement agreement in isolation, looking solely at the date it was executed and not at whether the agreement had any effect on 2009 fuel cost," Chief Justice Maureen O’Connor wrote in the opinion. "In short, Ohio Power ignores the impact of the settlement agreement on 2009 [fuel adjustment clause] costs.”