The Public Utility Commission of Texas approved a settlement agreement that reduces AEP Texas Inc.'s annual revenue requirement by $27 million, in part to adjust for the impacts of a 2017 reduction in the federal income tax rate from 35% to 21%.
As part of the agreement, the American Electric Power Co. Inc. subsidiary agreed to reduce the revenue requirement in its distribution-cost recovery factors to $55.6 million, down from an initial request of $82.6 million. AEP Texas Central Co.'s revenue requirement was cut by $21.2 million and AEP Texas North Co.'s was cut by $5.8 million, according to an Aug. 30 PUCT order.
AEP's Central and North divisions merged into AEP Texas, effective Dec. 31, 2016, but they are still legally separate entities. The divisions were directed by the commission to charge separate rates and riders, and maintain separate tariffs unless otherwise approved by regulators.
The terms of the settlement took effect Sept. 1. (PUC Docket No. 48222)