Rate Matters (Tables)

9 Months Ended

Sep. 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	$	80.6	$	26.0	$	21.9	$	3.2	$	5.1	2020	27 years

(a)

In October 2018, PSO changed depreciation rates to utilize the 2020 end-of-life and defer depreciation expense to a regulatory asset for the amount in excess of the previously OCC-approved depreciation rates for Oklaunion Power Station. See “2018 Oklahoma Base Rate Case” discussion below for additional information.

Regulatory Assets Pending Final Regulatory Approval

	AEP
	September 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	26.2		14.5
Oklaunion Power Station Accelerated Depreciation	21.9		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	37.8		35.3
Storm-Related Costs (a)	—		152.4
Other Regulatory Assets Pending Final Regulatory Approval	26.8		20.7
Total Regulatory Assets Pending Final Regulatory Approval (b)	$	168.4	$	288.0

(a) In September 2019, AEP Texas securitized $235 million of storm-related costs. As a result of the securitization, the regulatory asset balance was transferred to Securitized Assets on the balance sheets. See “Texas Storm Cost Securitization” discussion below for additional information.

(b) In 2015, APCo recorded a $91 million reduction, before cost of removal of $17 million, 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
	September 30,		December 31,
	2019		2018
Noncurrent Regulatory Assets	(in millions)
Regulatory Assets Currently Not Earning a Return
Rate Case Expense	$	2.3	$	0.2
Storm-Related Costs (a)	—		152.4
Total Regulatory Assets Pending Final Regulatory Approval	$	2.3	$	152.6

(a) In September 2019, AEP Texas securitized $235 million of storm-related costs. As a result of the securitization, the regulatory asset balance was transferred to Securitized Assets on the balance sheets. See “Texas Storm Cost Securitization” discussion below for additional information.

	APCo
	September 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	37.8		35.3
Other Regulatory Assets Pending Final Regulatory Approval	—		0.6
Total Regulatory Assets Pending Final Regulatory Approval (a)	$	42.9	$	44.9

(a) In 2015, APCo recorded a $91 million reduction, before cost of removal of $17 million, 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
	September 30,		December 31,
	2019		2018
Noncurrent Regulatory Assets	(in millions)
Regulatory Assets Currently Not Earning a Return
Cook Plant Study Costs	$	10.7	$	—
Other Regulatory Assets Pending Final Regulatory Approval	0.1		3.3
Total Regulatory Assets Pending Final Regulatory Approval	$	10.8	$	3.3

	OPCo
	September 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
	September 30,		December 31,
	2019		2018
Noncurrent Regulatory Assets	(in millions)
Regulatory Assets Currently Earning a Return
Oklaunion Power Station Accelerated Depreciation	$	21.9	$	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	$	21.9	$	6.0

	SWEPCo
	September 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	6.8		5.3
Rate Case Expense – Texas	1.4		4.9
Other Regulatory Assets Pending Final Regulatory Approval	4.2		3.6
Total Regulatory Assets Pending Final Regulatory Approval	$	63.0	$	64.4