Local woman files complaint against SWEPCO with FERC

Wednesday, February 5, 2014

Eureka Springs resident Martha Peine has filed a complaint with the Federal Energy Regulatory Commission alleging that American Electric Power subsidiary Southwestern Electric Power Co. improperly charged its customers for thousands of dollars the company spent in lobbying, advertising, charitable contributions and other non-transmission expenditures -- totaling $92,511.

In her complaint, Peine has asked FERC to grant her formal challenge and order AEP to refund expenses "wrongly passed on to ratepayers."

"I found AEP improperly charged ratepayers for many items, like monitoring the Turk Plant construction," Peine said. "It's my understanding that Arkansas ratepayers are not supposed to pay Turk Plant construction costs."

Ratepayers affected by the alleged misspent $92,511 are in portions of Arkansas and the other eight states in the Southwest Power Pool's nine-state region.

"FERC has the power to make SWEPCO repay its ratepayers for any misuse of funds," Pat Costner, director and co-founder of Save the Ozarks, told the Citizen.

According to Peine, if the challenge is granted, a hearing would be scheduled -- in Washington, D.C. -- where SWEPCO would have the opportunity to justify its expenditures. While SWEPCO has 30 days from Peine's complaint -- filed on Jan. 22 -- to produce an answer to the charges, there is no time limit on FERC deciding whether to hold a hearing.

"I just have to wait and see what happens," Peine said.

Peine started to review SWEPCO's finances last August, and she filed a preliminary challenge with AEP in December.

"I thought there were unresolved issues," she said of the preliminary challenge and her reasoning for filing a formal complaint with FERC.

The preliminary challenge is included in Peine's filing with FERC, which is available to read online at http://www.LovelyCitizen.com/files/peine-ferc.pdf.

AEP and SWEPCO have already acknowledged more than $16,000 in wrongful charges as a result of Peine's efforts and have made provisions to credit ratepayers for that amount. The $92,511 is on top of that and includes expenses such as a $3,230 private flight to Little Rock for SWEPCO President Venita McCellon-Allen to attend a luncheon honoring Collette Honorable, chairman of the Arkansas Public Service Commission, and a meeting with Sen. Harrelson.

Other corporate expenses incorrectly charged to ratepayers, according to Peine, include the tab for lunch with Larry Smith, mayor of Cave Springs, and others in November 2012 while presenting a large check to the Illinois River Watershed Partnership for the development of a 30-acre watershed sanctuary at Cave Springs. Smith later gave testimony before the APSC supporting SWEPCO's application to construct the 345 kV transmission line from the Shipe Road station to the Kings River station.

"Martha's work shows that investor-owned utilities like AEP/SWEPCO need stronger oversight and Arkansas ratepayers need stronger protection," Pat Costner, director of Save the Ozarks, said in a statement. "Forty states have an agency designated by state law to represent the interests of utility consumers before state and federal regulators and in the courts. Why not Arkansas?"

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