Nov. 18--An administrative law judge Tuesday recommended approval of AEP-PSO's $30 million cost-recovery request, which comes less than a year after the last major bill increase, utility officials said.

The newly conceived "capital reliability rider," filed in August by American Electric Power-Public Service Company of Oklahoma, technically would add less than $1 to the average residential customer's monthly bill over one year to pay for projects done since the last rate case.

At the same time, the utility would decrease the fuel cost portion on bills by a matching $30 million over the same period and exempt low-income customers.

"Basically it's an offset," AEP-PSO spokesman Stan Whiteford said. "There was always a desire to provide some relief for low-income customers, and that seemed a pretty good way to address that."

Administrative Law Judge Jacqueline T. Miller heard testimony in Oklahoma City on the deal reached between AEP-PSO, Oklahoma Corporation Commission staffers, the state Attorney General's Office and business advocacy groups. Miller will submit her report by Friday, but the three-member Corporation Commission has final say on the rider increase.

"It could go on the signing agenda within the next month," Whiteford said.

AEP-PSO hopes to add the rider and the reduced fuel cost adjustment by January.

The commission approved AEP-PSO's last major rate request, $81 million annually, in

January. Those recoveries involve utility investments made over

the last couple of years, and AEP-PSO hopes the new rider mechanism will help limit bigger rate cases down the road, Whiteford said.

The rider seeks to recover specific infrastructure investments such as utility poles, wire, switches, substations, transmission towers and power plant equipment. Major rate cases would factor in manpower issues, depreciation and return on equity.

AEP-PSO often waits two years or more to bring its major rate requests to the Corporation Commission.

"There's this huge regulatory lag," Whiteford said. "What we're trying to avoid are larger rate cases, where we wait several years and let these things build up."

AEP-PSO already implements quarterly or annual riders for other costs, including tree maintenance.

The utility serves about 527,000 residential, industrial and commercial customers statewide.

AEP-PSO's capital reliability rider

--$30 million increase on bills, spread out over year, to cover infrastructure improvements.

--$30 million reduction in fuel cost factor paid on bills

--Exemption for customers on low-income energy assistance program

Rod Walton 581-8457 rod.walton@tulsaworld.com

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