Council approves 2012 budget and resolution objecting to AEP rate increases

After voting to approve the 2012 budget, the Hillsboro City Council passed a resolution officially objecting to the Ohio Public Utilities Commission for allowing "deferred costs" to be charged in 2012 to AEP customers, resulting in "unconscionable" bills, and requesting a reversal of its decisions. 

The legislation also allows for Hillsboro Mayor Drew Hastings to take "all legal action necessary" to make the city's position known. 

The city will be paying an additional $10,000 a month in electric costs, according to the resolution, as a result of the rate increases. 

As previously reported by The Highland County Press, Jeff Rennie, an AEP spokesman, said the "new rates are the result of a compromise between AEP, the Public Utilities Commission of Ohio and many other companies and groups. The plan calls for AEP to change gradually to prices set by market forces."

That change - according to some area business owners and residents - resulted in 2012 utility bills that in some cases were more than double and triple the costs in 2011.

Prior to Monday's council meeting, held in the Hillsboro Municipal Courtroom, the finance committee met to discuss the proposed budget. 

Hillsboro Auditor Gary Lewis told the committee that in accordance with the most recent city electric bills, it was an increase of approximately $120,000. The bill at Shaffer Park saw the highest increase, with the February bill three times the previous bill cycle. 

Finance committee chairperson Peter Pence said that he assumed the financial repercussions of "the AEP fiasco have not been factored into the budget?"

Lewis said that it had not but that it was something the city would continue to monitor. Lewis said that he is hopeful the PUCO will examine the issue, which would hopefully result in a rate reduction. 

During a meeting of the Highland County Board of Commissioners this week, commissioner Tom Horst read from a list of county invoices from AEP. One bill increased from $212 to $790, and another increased from $180 to $978, and another from $444 to $617. Hillsboro uptown business owner Brent Huffman said his bill increased by nearly 150 percent, from $214 to $497. Bob Higgins, who owns residential apartment buildings in Hillsboro, said one tenant's bill went from $50 a month to $300. 

In his report to council, Hastings said that the PUCO/AEP issues were timely and needed immediate action. 

"I think it's important that we go on record with that," Hastings said. "I think it speaks strongly to how most of us feel about the issue. I thought it was well thought out. I'd like to thank, really, this whole community, who pulled together with this."

Hastings said that significant work has been done by the Highland County Board of Commissioners, Highland County Chamber of Commerce President Katy Farber, Ohio 86th District Rep. Cliff Rosenberger and people in the mayor's office to "keep this on the front burner."

"I've really been impressed with the kind of independent synergy where everybody has kind of come together on the same page and showed them that we're not going to take this problem laying down," Hastings said.

According to the resolution, "in mid-December 2011, the PUCO authorized AEP to collect more revenue from consumers, and this authorization is now being reflected in the electric bills that have gone out to consumers and will continue to go out to consumers ... and these increases have resulted in excessive and unconscionable increases to residential and small business customers and to the City of Hillsboro by amounts exceeding 40 percent, and the impact has been reported in the newspapers ...

"The PUCO authorized AEP to increase the default supply price by about $300 million, authorized AEP to increase the CRES supplier price (going from about $16 to $255 in 2012) and authorized AEP to increase the amount of revenue it collects for providing local distribution service, thereby significantly increasing AEP’s revenue while limiting the ability of consumers (acting individually or through community aggregation programs) to avoid the increase by obtaining lower-priced electricity supply from a CRES supplier," according to the legislation. 

The city will be paying an additional $10,000 a month in electric costs if the PUCO does not address the issue. 

"That the City of Hillsboro, hereby proclaims its adamant PROTEST [city's capitalization] against these increases and deferred costs and respectfully asks PUCO to reverse its decision authorizing said increases and, if it does not, that said PUCO decision should be appealed to the Ohio Supreme Court by the parties opposing said increases who have standing," according to the resolution. "It should be known that the City of Hillsboro and the citizens of Hillsboro and Highland County who have been affected by these increases need RELIEF [city's capitalization]. We request that PUCO act with all due speed to issue an opinion that protects the consumers, businesses, governments, schools and other electric customers from these EXCESSIVE, UNCONSCIONABLE, AND UNBEARABLE COSTS [city's capitalization]."

Hastings thanked Hillsboro Deputy Law Director Laura Curliss for her work on the legislation, saying that, "I think (the resolution) makes its point. I think Ms. Curliss did a good job drafting this, setting the tone for it. Actually, it was a little more temperate than I would have done it ... and I'm glad that it was done that way. But I think that it gets the point across. I think it speaks to what our problem is." 

Council voted 5-0 to pass the resolution. 

Council also voted 5-0, each, to authorize the 2012 annual appropriations budget and a resolution for the transfer of various funds. 

The PUCO announced Friday that it would soon address the "significant impacts" that the rate changes have had to customers who are "primarily small businesses, school districts and local governments." 

“My fellow commissioners and I are deeply troubled by what we have heard from business owners, elected officials and the governor on this issue,” PUCO Chairman Todd A. Snitchler stated.

Highland County Commissioner Tom Horst said after Monday's council meeting that he is hoping the PUCO will consider holding a hearing on the increases in the Hillsboro area so that affected residents will be able to attend. 

Rep. Rosenberger said that he would encourage the PUCO to consider meeting in Hillsboro, but that it was his impression that they typically meet at their offices in Columbus.