AEP Ohio bills to rise under new PUCO ruling, but exact amount unclear

Utility settlement includes tax refunds, but also paves way for future distribution cost increases

Apr. 6, 2026 at 10:04am

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The Public Utilities Commission of Ohio (PUCO) has approved a distribution rate increase settlement with AEP Ohio, the central Ohio utility giant. While the settlement includes some temporary bill reductions from tax refunds, it also sets the stage for potentially significant future increases in distribution charges that could eclipse those savings.

Why it matters

This settlement highlights the ongoing challenges of balancing utility infrastructure investments, regulatory oversight, and the impact on customer bills during a period of economic uncertainty. The decision raises questions about transparency and the long-term affordability of electricity for Ohio households.

The details

The PUCO approved an $11 million base rate increase for AEP Ohio, far less than the utility's original $97 million request. However, the settlement also includes the elimination of 'tax riders' that AEP Ohio uses to recoup the costs of distribution infrastructure upgrades. This could lead to much larger increases in the future, with PUCO estimating potential monthly bill hikes of over $10 for the average residential customer by 2028 if AEP Ohio maxes out the new caps on these riders.

  • On April 1, 2026, the PUCO approved the distribution rate increase settlement with AEP Ohio.
  • For the next 18 months, AEP Ohio residential customers using 1,000 kWh per month will pay $1.22 less on their bills due to tax refunds.
  • In 2027, the annual cap on AEP Ohio's distribution infrastructure rider charges is set at $165.6 million.
  • For the first 5 months of 2028, the cap on AEP Ohio's distribution infrastructure rider charges is set at $87 million.

The players

Public Utilities Commission of Ohio (PUCO)

The state regulatory agency that approved the distribution rate increase settlement with AEP Ohio.

AEP Ohio

The central Ohio utility giant that reached the settlement agreement with PUCO, allowing it to raise distribution rates but capping certain infrastructure upgrade charges.

Ohio Consumers' Counsel

A state agency that has criticized the settlement, arguing it lacks transparency and will result in higher bills for Ohio consumers.

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What’s next

AEP Ohio is expected to submit its estimate of how much it needs to charge for distribution infrastructure upgrades within the next year, which PUCO will then review and approve if the investments are deemed necessary.

The takeaway

This settlement highlights the ongoing tension between utility companies' need to invest in grid modernization and the impact those costs have on customer bills, especially during a period of economic uncertainty. It underscores the importance of regulatory oversight and transparency to ensure fair and affordable electricity rates for Ohio households.