AEP Ohio April 2026 PUCO Order: Distribution Down, Transmission Rider Up

What the PUCO ordered on April 1, 2026

The Public Utilities Commission of Ohio adopted a settlement in AEP Ohio's distribution rate case on April 1, 2026 [puco-aep-2026]. The headline numbers:

Item	Amount	Source
Base distribution increase approved	$11 million	[puco-aep-2026]
Increase AEP originally sought	$97 million	[puco-aep-2026]
TCJA customer refunds (18 months)	~$105 million	[puco-aep-2026]
Net annual revenue change	−$58.7 million	[puco-aep-2026]
Return on equity	9.84%	[puco-aep-2026]

PUCO Chair Jenifer French said the settlement balances affordability with reliability and makes new data centers pay for grid costs they impose [puco-aep-2026]. AEP Ohio will charge a minimum monthly customer charge for new data center customers under the order [puco-aep-2026].

The Commission also approved a revised bill format to improve transparency [puco-aep-2026]. For a cultivator, that matters because Ohio bills stack supply, distribution, transmission riders, and taxes on one statement.

Distribution down, transmission rider up

Consumer advocates highlighted a split outcome: base distribution rose modestly, but the Buckeye Transmission Cost Recovery (BTCR) rider increased about 0.79 cents per kWh [occ-aep-factsheet]. Transmission is federally regulated; Ohio utilities recover it through riders that move independently of supply auctions.

For an indoor grow, transmission and distribution are not shoppable. Only the generation/supply portion is open to retail competition under Ohio switching rules.

Think in three buckets:

1. Supply (energy + embedded capacity in default service): shoppable
2. Distribution (wires, transformers, demand charges): AEP Ohio tariff
3. Transmission riders (BTCR and others): pass-through of regional grid costs

A retail fixed contract does not cap BTCR. See understanding your commercial utility bill for where each bucket appears.

Worked example: BTCR on a Columbus cultivator

Inputs we chose; replace with your meter data.

Input	Value
Monthly kWh	95,000
BTCR increase	0.79¢/kWh [occ-aep-factsheet]
Added monthly cost from BTCR step	95,000 × $0.0079 = $750.50
Annualized if rider flat	$9,006

That increment hits even if you locked a cheap supply contract in 2024. Demand charges on AEP Ohio commercial tariffs would add separately.

If TCJA refunds flow over 18 months as ordered [puco-aep-2026], your net bill change may differ from the BTCR math alone. Track credits on the new bill format when it rolls out.

Data center policy and cannabis load

Ohio regulators are explicitly separating large new data center load from general ratepayers [puco-aep-2026]. Cannabis cultivation is not named in the order, but C&I cultivators with high kW demand face the same delivery tariff logic: the utility sizes equipment for peak.

If you are expanding canopy in AEP territory:

• Confirm service upgrade costs before licensing deadlines
• Model demand charges alongside supply shopping
• Compare AEP default supply to retail offers using the current price to compare on your bill

Our FirstEnergy Ohio settlement post covers the other major Ohio utility benchmark for the same shopping decision.

What growers should do now

1. Pull April–August 2026 bills and mark BTCR, distribution energy, and demand lines.
2. Compare supply only against retail quotes; do not double-count riders as supply savings.
3. Read the PUCO docket (25-392-EL-AIR) if you dispute classification or demand ratchets [puco-aep-2026].
4. Align any new supply contract term with PJM capacity resets (June 1) that affect default benchmarks even on AEP Ohio.

The April 2026 order reduced net revenues [puco-aep-2026], but transmission riders can still push effective cents per kWh up [occ-aep-factsheet]. Treat the order as a delivery-side update, not a signal that total bills are falling automatically.

Reading the new AEP Ohio bill format

The PUCO-approved bill format change is not cosmetic for cultivators reconciling supply invoices against utility statements [puco-aep-2026]. When a retail supplier bills energy separately, you need line-for-line mapping to catch double billing or missing BTCR pass-through.

Ask your supplier account manager whether Ohio sales tax treatment changed with the format update. Tax sits outside energy math but affects cash.

Vegetation and reliability riders

The settlement allows AEP Ohio to continue vegetation management and capital investment programs subject to future PUCO review [puco-aep-2026]. Outage minutes matter in flower; riders funding tree trimming can be legitimate. Challenge only imprudent spend in the docket, not every reliability dollar.

Columbus metro cultivation context

Central Ohio indoor licenses cluster around Columbus and Springfield load pockets. Data center minimum charges in the order signal how Ohio allocates new large load [puco-aep-2026]. A 500 kW expand-to-800 kW grow should ask AEP service planning about upstream upgrade charges before lease signing.

Supplier comparison worksheet

Question	Why
Is capacity embedded or pass-through PJM?	June resets move default benchmarks
Does price include Ohio REC compliance?	Some quotes exclude compliance adders
Early termination if license revoked?	Confirm with counsel, not broker marketing
Consolidation for multi-meter sites?	Each meter may have separate demand ratchets

Use Ohio commercial electricity rates as context, not a substitute for 25-392-EL-AIR outcomes on your tariff class [puco-aep-2026].

TCJA refund cash flow

The order returns roughly $105 million to customers over 18 months through Tax Cuts and Jobs Act mechanisms [puco-aep-2026]. Track credit riders monthly; finance teams sometimes miss them against BTCR increases [occ-aep-factsheet], overstating net bill growth in models.

How the 9.84% return on equity affects future cases

The PUCO set AEP Ohio's return on equity at 9.84% in the April 2026 order [puco-aep-2026]. ROE is the authorized profit margin on the utility's invested capital in wires, substations, and related assets. It does not appear as a line item on your bill, but it sets the floor for how aggressively AEP can argue for future distribution increases when you request a service upgrade for a new flower room.

When AEP sizes a transformer for a 600 kW cultivation load, a portion of the upgrade cost may become customer contribution and a portion may roll into rate base recovered through future tariffs. Cultivators negotiating interconnection agreements should ask for a cost estimate breakdown before the PUCO docket closes on contested upgrade allocations. Ohio's cannabis program does not cap utility contribution rules; confirm with counsel and your engineer.

AES Ohio and Duke benchmarks in the same PJM zone

AEP Ohio's April order is one of three major Ohio delivery stories in 2026. FirstEnergy Ohio operating companies carry a higher default price to compare near 13.1 cents according to our FirstEnergy settlement coverage. Duke Energy Ohio benchmarks lower in the same market snapshots. Supply shopping uses those benchmarks; BTCR and distribution riders use AEP-specific tariff schedules regardless of which default supply rate your neighbor pays.

Multi-site operators with a Dayton AES meter and a Columbus AEP meter need separate rider tracking. PJM capacity resets on June 1 move default supply for all three utilities, but BTCR step-ups from Case 25-392-EL-AIR apply only on AEP Ohio statements [puco-aep-2026] [occ-aep-factsheet].

Utility territory	Supply benchmark (2026 summaries)	April 2026 delivery headline
AEP Ohio	See bill PTC	BTCR +$0.0079/kWh [occ-aep-factsheet]
FirstEnergy opcos	~13.1¢ (see FE post)	Separate PUCO settlement track
Duke Ohio	See bill PTC	Own rider schedule

Demand ratchets when you add canopy mid-year

Ohio commercial tariffs often include demand ratchets that bill a portion of your historical peak kW even when current-month demand falls. A cultivator that ran 350 kW during summer dehumidification may pay ratcheted demand through winter even if lights draw less. The April 2026 order did not eliminate ratchets; it adjusted distribution revenue, TCJA refunds, and transmission riders [puco-aep-2026].

Before energizing a second flower room, pull twelve months of interval data if available and model coincident peak with both rooms on the same photoperiod. Staggering 12-on/12-off schedules across rooms can shave kW while keeping total kWh similar. That lever affects distribution demand, not BTCR, which is kWh-linked [occ-aep-factsheet]. See demand charges explained and Ohio cultivation facility energy for load-shaping tactics that pair with supply shopping under Ohio switching rules.

TCJA refund tracking worksheet

The order returns roughly $105 million through Tax Cuts and Jobs Act mechanisms over 18 months [puco-aep-2026]. Finance teams should log credit riders monthly and reconcile against BTCR increases [occ-aep-factsheet]:

Month	BTCR $ impact (95k kWh example)	TCJA credit observed	Net change
Template	$750.50 [occ-aep-factsheet]	Enter from bill	Sum

Missing credits on accrual models overstates net bill growth. Pair refund tracking with understanding your commercial utility bill when the revised bill format rolls out [puco-aep-2026].

Vegetation management and outage minutes in flower

The settlement allows AEP Ohio to continue vegetation management and capital investment programs subject to future PUCO review [puco-aep-2026]. Outage minutes matter during flower; riders funding tree trimming can be legitimate even when BTCR rises [occ-aep-factsheet]. Challenge imprudent spend in the docket, not every reliability dollar [puco-aep-2026].