RATE STUDY

AEP Columbus Southern Power rings in the new year with new rate changes.

Effective January 2015, the AEP Columbus Southern Power rates went through a significant change that will have a varying degree of effect on residential rates.  When thinking about the effect the rates will have on my bill, I like to break down the rates into the flat/fixed portions and the usage-based rates.  I think it simplifies the math into something a little easier to understand.  Below you can see the breakdown of the residential rates in December 2014 and the new changes in January 2015.

While no one remembers or still uses the slope formulas we learned in school, they become a very useful tool for us to visualize the impact of rate changes.  Effectively, those sets of rates get broken down into a simple fixed portion you pay for service (regardless of usage), and then the cost per kilowatt-hour.

In December, the rate simplified down to a flat cost of $9.38/month and $.1699/kWh for the first 800 kWh. In January, the flat portion jumped up to $14.95/month, but the first 800 kWh were billed at a much lower $.1452/kWh. What this essentially means is that while the standard monthly charges went up $5.57, your usage cost went down $.0247/kWh – a whopping 14.5% decrease.  If you look at the graph below, you can see that this rate change increases the bill for customers using less than 225 kWh in a month, but decreases the charges for customers who are using above that.

Nationwide_Energy_Parnters_Graph1

From 800 kWh to 2000 kWh, the usage rate in December was $.11/kWh – a considerable drop from the cost for the first 800 kWh.  In January, that rate decreased to $.1051/kWh – less of a drop than the first 800 kWh, but any price drop is appreciated.  Both rates decrease by half a cent above 2000 kWh.
The rate change will benefit most customers.  As I write this, the temperature in Columbus sits at 0 degrees – so customers like me who have electric heat can definitely appreciate this relief. Most customers should see a savings of roughly $15 this month due to the usage-based rate decreases.

Nationwide_Energy_Parnters_Graph2

In 2014, AEP Ohio’s rates increased roughly 17%, so this decrease provides great relief to a customer base that has seen the cost of electricity steadily increase for some time.  While the rate decreases help when usages are at their highest, it still pays to save energy.  Every kilowatt-hour saved costs $0 – a number I like to pay. For more information on tips and recommendations on how to save visit the Help Me Save portion of our website or call our customer service team at 1(877)818-2637.

 

John Kitson started at Nationwide Energy Partners in 2009 and is currently the Billing Manager for the company. With a background in IT and communications, John actively enjoys working to communicate and understand the changes occurring within the energy industry. A native of South Florida, he now resides in Columbus, OH.

 

Karen McConkey

West Palm Beach, FL