AEP Texas seeks determination regarding costs associated with storms

Published on August 10, 2018 by Kevin Randolph

AEP Texas filed a request this week with the Public Utility Commission of Texas (PUCT) seeking a determination that $415 million in transmission-and-distribution-related system restoration costs associated with Hurricane Harvey and other weather events were reasonable and necessary and therefore eligible for recovery.

This proceeding focuses on quantifying the costs. AEP Texas will request, likely in early 2019, to recover the costs in separate proceedings, likely through requesting approval to finance the amount through the issuance of securitization bonds.

“Hurricane Harvey created catastrophic disruption of utility service and enormous damage to T&D utility infrastructure in the 13-county area impacted by the storm,” Judith Talavera, AEP Texas president and chief operating officer, said. “AEP Texas expended very substantial human, material, and financial resources following the storm in order to rapidly, safely, and successfully restore service. It is very important that we be allowed to recover the costs associated with our efforts.”

This initial filing specifically seeks a determination regarding approximately $295 million of distribution-related restoration costs that the company will seek to recover through a securitization process and $120 million in transmission-related costs that the company will seek to recover through the existing interim Transmission Cost of Service (TCOS) process and a future AEP Texas rate case.

The request focuses on the AEP Texas Central Division service territory and will not affect consumers living in the AEP Texas North Division.

The AEP Texas service area covers roughly 97,000 square miles and has 240 miles of coastal exposure. The company maintains and operates about 8,000 miles of transmission lines and approximately 43,000 miles of distribution lines.

Hurricane Harvey, a Category 4 hurricane, was the most intense storm to hit the AEP Texas service territory since Hurricane Celia, a Category 3 storm, struck the area in 1970.