SHREVEPORT, La. - A request to raise the cost of electricity for Southwestern Electric Power Company's customers in Texas is at the beginning of a long regulatory process not expected to end until late next year.
The rate increase would generate a boost of the company's annual non-fuel base rate revenues of more than $90 million, according to a news release. For a Texas residential customer using 1,000 kilowatt-hours per month, the request would result in an overall bill increase of approximately $15.71 per month, or 15%.
"We recognize that customers are concerned about their energy costs, especially during the pandemic," said Malcolm Smoak, SWEPCO president and chief operating officer, in a statement. "We continually work to balance customers' expectations about cost and service with the costs necessary to build, maintain and operate a strong and reliable electric system. In the months ahead, the Public Utility Commission and other stakeholders will carefully review our request."
Base rates refer to the costs of building, maintaining and operating SWEPCO's electric system, including power plants, transmission and distribution lines, and facilities to serve customers. Base rates do not include the fuel portion of the customer's bill, which pays for fuel and purchased power and is a pass-through to customers with no profit to the company.
SWEPCO filed the request with the Public Utility Commission of Texas in October and expects the entire approval process to take more than a year, a spokesperson said Friday. If approved, new rates would likely go into effect in the first billing cycle of January 2022.
SWEPCO has filed written testimony in support of the request with the PUC, and deadlines for those who object to the request are coming in February 2021. Hearings will follow in May, and the PUC will not make a final ruling until October at the earliest.
The request includes investments in generation, transmission and distribution facilities since 2016, plus increased operations and maintenance costs, the company says. It also includes costs related to generating unit retirements, increased tax costs related to accelerated depreciation and additional funds for vegetation management.