Allegheny Power 2013 Annual Report Download - page 142

127
In accordance with PUCO Rules and a PUCO directive, on July 31, 2012 the Ohio Companies filed their three-year portfolio plan
for the period January 1, 2013 through December 31, 2015. Estimated costs for the three Ohio Companies' plans total approximately
$250 million over the three-year period, which is expected to be recovered in rates to the extent approved by the PUCO. Hearings
were held with the PUCO in October 2012. On March 20, 2013, the PUCO approved the three-year portfolio plan for 2013-2015.
Applications for rehearing were filed by the Ohio Companies and several other parties on April 19, 2013. The Ohio Companies filed
their request for rehearing primarily to challenge the PUCO's decision to mandate that they offer planned energy efficiency resources
into PJM's base residual auction. On May 15, 2013, the PUCO granted the applications for rehearing for the sole purpose of further
consideration of the matter. On July 17, 2013, the PUCO denied the Ohio Companies' application for rehearing, in part, but authorized
the Ohio Companies to receive 20% of any revenues obtained from bidding energy efficiency and demand response reserves into
the PJM auction. The PUCO also confirmed that the Ohio Companies can recover PJM costs and applicable penalties associated
with PJM auctions, including the costs of purchasing replacement capacity from PJM incremental auctions, to the extent that such
costs or penalties are prudently incurred. On August 16, 2013, ELPC and OCC filed applications for rehearing under the basis that
the PUCO's authorization for the Ohio Companies to share in the PJM revenues was unlawful. The PUCO granted rehearing on
September 11, 2013 for the sole purpose of further consideration of the issue.
On September 16, 2013, the Ohio Companies filed with the Supreme Court of Ohio a notice of appeal of the PUCO's July 17, 2013
Entry on Rehearing related to energy efficiency, alternative energy, and long-term forecast rules stating that the rules issued by the
PUCO are inconsistent with and are not supported by statutory authority. On October 23, 2013, the PUCO filed a motion to dismiss
the appeal. The Ohio Companies' response was filed on November 4, 2013. The motion is still pending and additional briefing has
followed. The Ohio Companies filed their merit brief with the Supreme Court of Ohio on February 24, 2014.
SB221 requires electric utilities and electric service companies in Ohio to serve part of their load from renewable energy resources
measured by an annually increasing percentage amount through 2024. The Ohio Companies conducted RFPs in 2009, 2010 and
2011 to secure RECs to help meet the renewable energy requirements established under SB221. In September 2011, the PUCO
opened a docket to review the Ohio Companies' alternative energy recovery rider through which the Ohio Companies recover the
costs of acquiring these RECs and selected auditors to perform a financial and management audit. Final audit reports filed with the
PUCO generally supported the Ohio Companies' approach to procurement of RECs, but also recommended the PUCO examine,
for possible disallowance, certain costs associated with the procurement of in-state renewable obligations that the auditor
characterized as excessive. Following the hearing, the PUCO issued an Opinion and Order on August 7, 2013 approving the Ohio
Companies' acquisition process and their purchases of RECs to meet statutory mandates in all instances except for part of the
purchases arising from one auction and directing the Ohio Companies to credit non-shopping customers in the amount of $43.3
million, plus interest, and to file tariff schedules reflecting the refund and interest costs within 60 days following the issuance of a
final appealable order on the basis that the Ohio Companies did not prove such purchases were prudent. The Ohio Companies,
along with other parties, timely filed applications for rehearing on September 6, 2013. On December 18, 2013, the PUCO denied
all of the applications for rehearing. Based on the PUCO ruling, a regulatory charge of approximately $51 million, including interest,
was recorded in the fourth quarter of 2013 included in Amortization of regulatory assets, net within the Consolidated Statement of
Income. On December 24, 2013, the Ohio Companies filed a notice of appeal and a motion for stay of the PUCO's order with the
Supreme Court of Ohio. On February 10, 2014, the Supreme Court of Ohio granted the Ohio Companies' motion for stay, which
went into effect on February 14, 2014. On February 18, 2014, the Office of Consumers' Counsel and the Environmental Law and
Policy Center also filed appeals of the PUCO's order.
In March 2012, the Ohio Companies conducted an RFP process to obtain SRECs to help meet the statutory benchmarks for 2012
and beyond. With the successful completion of this RFP, the Ohio Companies achieved their in-state solar compliance requirements
for 2012. The Ohio Companies also held a short-term RFP process to obtain all state SRECs and both in-state and all state non-
solar RECs to help meet the statutory benchmarks for 2012. The Ohio Companies recently reported that they met all of their annual
renewable energy resource requirements for reporting year 2012. The Ohio Companies conducted an RFP in 2013 to cover their
all-state SREC and their in-state and all-state REC compliance obligations.
The PUCO instituted a statewide investigation on December 12, 2012 to evaluate the vitality of the competitive retail electric service
market in Ohio. The PUCO provided interested stakeholders the opportunity to comment on twenty-two questions. The questions
posed are categorized as market design and corporate separation. The Ohio Companies timely filed their comments on March 1,
2013, and filed reply comments on April 5, 2013. On June 5, 2013, the PUCO requested additional comments and reply comments
on the topics of market design and corporate separation, which the Ohio Companies timely filed on July 8, 2013 and July 22, 2013,
respectively. The PUCO held a series of workshops throughout 2013, which included an en banc workshop on December 11, 2013.
The PUCO Staff filed a report on January 16, 2014, which contained a limited discussion of the workshops and the PUCO Staff’s
recommendations. The Ohio Companies submitted comments on February 6, 2014 and Reply Comments on February 20, 2014.