The Federal Energy Regulatory Commission (FERC) has agreed to set a hearing on the reasonableness of American Electric Power Co.'s (AEP) nonfirm, offpeak hourly rate for electric transmission service (Docket No. EL95-4-000).Commonwealth Edison Co. (CE) has alleged that Indiana Michigan Power Co., an AEP operating company, overcharges for hourly, nonfirm transmission services provided during offpeak hours. AEP calculates its rates for hourly transmission service based on a 16-hour day, but does not differentiate between peak and offpeak periods when pricing nonfirm service. CE has a large amount of low-cost nuclear capacity that is frequently available for sale during offpeak hours, which requires offpeak hourly transmission service on AEP's system. Under AEP's pricing scheme, CE must pay peak prices for offpeak nonfirm transmission.
FERC Asks AEP to Justify Rate Differential
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