Industrial Energy Users-Ohio has filed a complaint at FERC arguing that the treatment of certain transmission charges, including Network Integration Transmission Service (NITS), as nonbypassable at AEP Ohio violates the PJM OATT and FERC's Order No. 888 requirements.

At AEP Ohio, the utility assumes the NITS obligation on behalf of all customers, under the reasoning that the charge is regulated and not hedgeable. Retail suppliers are relieved of paying for NITS.

IEU-Ohio said that, "Under the requirements of Order No. 888, and as reflected in the provisions of the Pro Forma Open Access Transmission Tariff ("Pro Forma OATT") adopted in Order No. 888 and in the provisions of the PJM OATT, transmission service must be made available to Eligible Customers under the rates, terms, and conditions set forth in the OATT. Eligible Customers include retail customers that are taking, or are eligible to take, unbundled retail service."

"AEP-Ohio, however, has denied retail customers the opportunity to secure transmission services under the PJM OATT. Beginning June 1, 2015, AEP-Ohio has resold, billed for, and collected for certain PJM transmission services, including Network Integration Transmission Service ('NITS'), through a nonbypassable transmission rider, the Basic Transmission Cost Recovery Rider ('BTCR'), which has been approved by the Public Utilities Commission of Ohio. Retail customers are functionally barred by AEP-Ohio from securing these transmission services directly from PJM or indirectly through a competitive retail electric service ('CRES') provider," IEU-Ohio said

"Further, AEP-Ohio has implemented the BTCR by using billing determinants that alter the transmission service bills that would otherwise be available to IEU-Ohio members (and all other AEP-Ohio customers) under the PJM OATT. The PJM OATT specifies that the rates for certain transmission services, including NITS, are to be assessed using a one coincident-peak ('1CP') billing determinant. Pursuant to the BTCR effective June 1, 2015, however, AEP-Ohio resells, bills, and collects for NITS (and other transmission services) based on the higher of the retail customer’s monthly demand or a minimum billing demand ('demand ratchet'), rather than the 1CP. As a result of AEP-Ohio's application of a different billing determinant, billings for transmission service under the nonbypassable retail tariff have been and will continue to be substantially higher for IEU-Ohio members than what would be billed under the PJM OATT. IEU-Ohio members estimate that their collective transmission bills from AEP-Ohio will be at least $1.307 million more annually under the BTCR than if those customers obtained transmission services at the rates, terms, and conditions set forth in the PJM OATT," IEU-Ohio said

"AEP-Ohio enforces the BTCR's nonbypassability and unlawful billing determinants by requiring generation suppliers serving retail customers, either directly or as a supplier of default generation service to AEP-Ohio, and retail customers that seek to contract directly with PJM for transmission service, to enter into agreements and Declarations of Authority that transfer billing responsibility for listed transmission services to AEP-Ohio. PJM has apparently accepted these new arrangements. As a further consequence of the actions of AEP-Ohio and PJM, customers such as the members of IEU-Ohio are at risk of being double-billed for unbundled transmission service. This occurs because some retail customers have entered into retail contracts at a fixed price that includes the cost of transmission service," IEU-Ohio said

Among other relief, IEU-Ohio sought a FERC finding that implementation of the BTCR is unlawful, that customers may secure transmission service directly from PJM at the rates, terms, and conditions set forth in the PJM OATT, and that refunds be granted.

See the full complaint here (EL16-10)