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Memo <br /> <br />To: Mr. John DyChes <br />Frorrg Mr. Robert Hards <br />cc: Mr. Paul Roop <br />Date= 02/28/02 <br />Re= AEP's rate change <br /> <br />Dear Mr. Dyches, <br />I have evaluated the information supplied by you conceming the elimination of the Public <br />Authority rate by AEP. According to the memo from Howard W. Dobbins and Thomas B. <br />Nicholson, dated January 10,2002, AEP has undergone a dramatic change in their billing <br />structure. They have created an unbundled structure that separates charges for generation, <br />transmission, and distribution services and are moving from a cost-of-service structure to a <br />market pdce structure. This billing change is going to cause an increase in the electric bill <br />charged to the City by AEP as the new rate is going to reflect a MGS, (medium general <br />service) or LGS, ( large general service) rate schedule. <br /> <br />There were several issues concerning this change that needed to be addressed. <br /> <br />You had asked if there was a way that we could serve the individual loads from our system. <br /> <br />· It is my understanding that we, as an electric utility, are not allowed to serve customers <br /> outside our current service territory. <br /> <br />· If we were able to serve outside our service territory, the cost of line construction, dght-°f- <br /> way agreements and attachment agreements would be prohibitive. <br /> <br />According to yesvachoice.com, there are currently no electdc providers, other than AEP, in <br />Henry County. If we had an option of choosing another provider, the only charges that would <br />be affected would be for generation. According to the memo from GDS Associates, Inc., <br />AEP's average unbundled generation charges currently range from 2.7 cents/kwh to 3.2 <br />cents/kwh, depending on the load factor of service. Though the cost per kwh of generation <br />seems Iow, the MGS rate schedule list OA'I-I- Transmission, Retail Transmission, and <br />Distribution charges separately. For billing purposes, each of these charges will be added <br />together to get an actual cost per kwh. In addition to the cost per kwh', a KW demand charge <br />and a customer charge will be added to get a final bill. An example of the billing charges for <br /> <br />· Page I <br /> <br /> <br />