Rate Matters (Tables)

6 Months Ended

Jun. 30, 2019

Regulated Generating Unit Expected to be Retired by 2020

Gross Investment		Accumulated Depreciation		Net Investment		Accelerated Depreciation Regulatory Asset (a)		Materials and Supplies		Cost of Removal Regulatory Liability		Expected Retirement Date	Remaining Recovery Period
(dollars in millions)
$	106.6	$	74.6	$	32.0	$	16.4	$	3.1	$	5.1	2020	27 years

Regulatory Assets Pending Final Regulatory Approval

	AEP
	June 30,		December 31,
	2019		2018
Noncurrent Regulatory Assets	(in millions)
Regulatory Assets Currently Earning a Return
Plant Retirement Costs – Unrecovered Plant	$	50.3	$	50.3
Kentucky Deferred Purchase Power Expenses	22.3		14.5
Oklaunion Power Station Accelerated Depreciation	16.4		5.5
Other Regulatory Assets Pending Final Regulatory Approval	5.4		9.3
Regulatory Assets Currently Not Earning a Return
Plant Retirement Costs – Asset Retirement Obligation Costs	35.3		35.3
Storm-Related Costs (a)	—		152.4
Other Regulatory Assets Pending Final Regulatory Approval	13.5		20.7
Total Regulatory Assets Pending Final Regulatory Approval (b)	$	143.2	$	288.0

(a) In June 2019, the PUCT approved AEP Texas’ request to securitize its total estimated distribution-related system restoration costs. See “Texas Storm Cost Securitization” discussion below for additional information.

(b) In 2015, APCo recorded a $91 million reduction to accumulated depreciation related to the remaining net book value of plants retired in 2015, primarily in its Virginia jurisdiction. These plants were normal retirements at the end of their depreciable lives under the group composite method of depreciation. APCo’s recovery of the remaining Virginia net book value for the retired plants will be considered in the Virginia SCC’s 2020 triennial review of APCo’s generation and distribution base rates.

	AEP Texas
	June 30,		December 31,
	2019		2018
Noncurrent Regulatory Assets	(in millions)
Regulatory Assets Currently Not Earning a Return
Rate Case Expense	$	0.7	$	0.2
Storm-Related Costs (a)	—		152.4
Total Regulatory Assets Pending Final Regulatory Approval	$	0.7	$	152.6

(a) In June 2019, the PUCT approved AEP Texas’ request to securitize its total estimated distribution-related system restoration costs. See “Texas Storm Cost Securitization” discussion below for additional information.

	APCo
	June 30,		December 31,
	2019		2018
Noncurrent Regulatory Assets	(in millions)
Regulatory Assets Currently Earning a Return
Plant Retirement Costs – Materials and Supplies	$	5.1	$	9.0
Regulatory Assets Currently Not Earning a Return
Plant Retirement Costs – Asset Retirement Obligation Costs	35.3		35.3
Other Regulatory Assets Pending Final Regulatory Approval	—		0.6
Total Regulatory Assets Pending Final Regulatory Approval (a)	$	40.4	$	44.9

(a) In 2015, APCo recorded a $91 million reduction to accumulated depreciation related to the remaining net book value of plants retired in 2015, primarily in its Virginia jurisdiction. These plants were normal retirements at the end of their depreciable lives under the group composite method of depreciation. APCo’s recovery of the remaining Virginia net book value for the retired plants will be considered in the Virginia SCC’s 2020 triennial review of APCo’s generation and distribution base rates.

	I&M
	June 30,		December 31,
	2019		2018
Noncurrent Regulatory Assets	(in millions)
Regulatory Assets Currently Not Earning a Return
Other Regulatory Assets Pending Final Regulatory Approval	$	—	$	3.3
Total Regulatory Assets Pending Final Regulatory Approval	$	—	$	3.3

	OPCo
	June 30,		December 31,
	2019		2018
Noncurrent Regulatory Assets	(in millions)
Regulatory Assets Currently Not Earning a Return
Other Regulatory Assets Pending Final Regulatory Approval	$	0.1	$	1.0
Total Regulatory Assets Pending Final Regulatory Approval	$	0.1	$	1.0

	PSO
	June 30,		December 31,
	2019		2018
Noncurrent Regulatory Assets	(in millions)
Regulatory Assets Currently Earning a Return
Oklaunion Power Station Accelerated Depreciation	$	16.4	$	5.5
Regulatory Assets Currently Not Earning a Return
Other Regulatory Assets Pending Final Regulatory Approval	—		0.5
Total Regulatory Assets Pending Final Regulatory Approval	$	16.4	$	6.0

	SWEPCo
	June 30,		December 31,
	2019		2018
Noncurrent Regulatory Assets	(in millions)
Regulatory Assets Currently Earning a Return
Plant Retirement Costs – Unrecovered Plant	$	50.3	$	50.3
Other Regulatory Assets Pending Final Regulatory Approval	0.3		0.3
Regulatory Assets Currently Not Earning a Return
Asset Retirement Obligation - Arkansas, Louisiana	6.3		5.3
Rate Case Expense – Texas	1.2		4.9
Other Regulatory Assets Pending Final Regulatory Approval	4.0		3.6
Total Regulatory Assets Pending Final Regulatory Approval	$	62.1	$	64.4

Total Estimated Distribution-Related System Restoration Costs

Total Estimated Distribution-Related System Restoration Costs
	(in millions)
Distribution-Related System Restoration Costs	$	264.6
Estimated Carrying Costs (through June 2019) (a)	26.9
Up-front Qualified Costs	4.4
Total Distribution-Related System Restoration Costs	295.9
less:
Insurance Proceeds and Government Grants	(3.1		)
Excess ADIT (b)	(63.5		)
Total Approved Distribution-Related System Restoration Costs	$	229.3

(a) Amount includes $16 million of debt carrying costs recorded as a reduction to Interest Expense in the second quarter of 2019.

(b)

As part of the financing order, AEP Texas agreed to offset a portion of their Excess ADIT that is not subject to rate normalization requirements against the total distribution-related system restoration costs.