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What Do AEP Energy Listed Rates Mean?
The 'average rate' you see on your AEP Energy bill and in the advertisements includes several different charges - there are usage based charges, utilities charges, monthly utility fees, monthly administrative fees from the provider, and various other taxes. Becuase some of these costs vary with usage while others do not, the 'average rate' you see on your bill will ironically be higher when your usage is lower. That's because the fixed monthly fees are spread over a smaller number of kWh or ccf.
Why Do AEP Energy Electricity Rates Vary Across the State?
That's a great question - why does Electricity pricing change ? There are good reasons for those differences.
As Electricity systems were built out in the early 20th century, different areas built a variety of generating plants, transmission lines, substations, and infrastructure. As a result, some areas of the state may have newer, more efficient plants, and others might have older, less efficient systems that cost more to operate for each unit of electricity they create. Then there are differences in the voltages and capacity of the transmission pipes and lines which cause more variation in the efficiency of the distribution system. Finally, different parts of Ohio have different utilities (the companies responsible for maintaining electrical distribution infrastructure), which each have their own shareholders, costs, and management.
Ultimately, these regional rate variations are not the fault of AEP Energy or any other energy providers and they are certainly not due to anyone trying to cheat or gouge consumers. The decisions the generators and utilities have made over many years as the power grid was constructed have resulted in an environment where it might cost 1-3 cents less to create and transmit Electricity to a home compared to another region. It just depends on the costs that were incurred to create the infrastructure in that area, how densely populated the area is, along with the decisions that were made over decades about what kinds of power plants to build and where to put them.