San Benito joins AEP fight; Coalition of cities opposes rate hike plan

SAN BENITO — Count the city in to try to curb AEP Texas’ latest rate hike proposal.

Last night, city commissioners joined a growing number of cities approving a resolution to hold off the power company’s proposed June 5 rate increase.

As part of the alliance, San Benito and other cities will hire attorneys to try to negotiate a reduced rate with the power company.

“It doesn’t allow AEP to adopt these changes until they work it out with the PUC,” City Manager Manuel De La Rosa, referring to the Public Utilities Commission, told commissioners.

Commissioners agreed to hire Lloyd Grosselink Attorneys to negotiate lower rates.

“We are a coalition of cities. Everybody’s joining in,” De La Rosa said. “Most of the cities right now are suspending the rates.”

Under AEP’s proposal, the amounts charged to providers for south and central Texas residential customers using 1,000 kilowatt hours of electricity a month would increase about $4.75 a month.

However, the power company is also proposing decreasing its rates by $5.01 across the state’s northern regions.

The power company’s request to the PUC reflects the amounts that are charged to providers for the delivery of electricity over AEP’s transmission and distribution lines.

AEP’s rates are included as part of the electric bill customers receive from their electric provider.

Last week, Harlingen commissioners also joined the coalition of cities pushing to reduce AEP’s proposed rate increase.

“AEP intends to increase their system-wide distribution rate by $38.3 million per year, an increase of 4.2 percent for customers in the Central division and a decrease of system-wide transmission rates in the North division by $3.16 million, a decrease of 0.7 percent,” a Harlingen document stated.

After the Harlingen meeting, AEP spokesman Danny Lucio said the company is proposing the rate increase “to reflect the current costs to service each customer class.”

The rate increase will also allow AEP “to recover costs and to update tariffs,” Lucio said in an interview.

For 12 years, AEP hasn’t gone before the Public Utilities Commission for a rate increase, Lucio added.

It’s not the first time city officials have fought to lower AEP’s rate increases.

“As we’ve done in the past, we are planning to participate in the case and will intervene on behalf of the cities of McAllen, Victoria and the 42 cities in the Lower Rio Grande Valley Development Council,” attorney Thomas Brocato wrote in the document released by Harlingen. “As a ratemaking proceeding, cities are entitled to reimbursement of their legal and consulting expenses. Thus, there will be no direct charge to your city as a participant in the rate case.”

In previous battles, negotiations have helped curb AEP rate increases, Harlingen Assistant City Manager Gabriel Gonzalez said last week.

According to Gonzalez, the cost of transmitting electricity to the region is leading AEP to propose the rate increase.

However, Lucio denied the cost of electrical transmission was behind the proposed rate hike.

But Gonzalez said the cost of transmitting electricity to the Valley is higher because most electricity is generated north of the region.

fdelvalle@valleystar.com