1/31/2006
AEP Ohio files post-stipulation report

COLUMBUS, Ohio, Jan. 31, 2006 – Columbus Southern Power Company and Ohio Power Company, collectively operating as AEP Ohio, have substantially met the terms and expectations of a 2003 stipulation agreement with the Public Utilities Commission of Ohio (PUCO) Staff, requiring improvements in electric distribution reliability, the companies said today in a report filed with the PUCO.   
 
As part of the stipulation agreement, AEP Ohio committed to improve the performance of its distribution circuits ranked in the lowest-performing 25 percent of AEP Ohio distribution circuits, as measured by system average interruption duration index (SAIDI).  According to the agreement, AEP Ohio would improve performance of the designated circuits by an average of 40 percent in the two-year period ending Dec. 31, 2005, while maintaining baseline SAIDI levels for the remaining 75 percent of AEP Ohio’s circuits.
 
In its filing, AEP Ohio indicates that “it has substantially met the terms and expectations of the stipulation agreement addressing distribution service quality issues within its service territory during the two-year period ending in 2005 as discussed in this report.”  AEP Ohio’s distribution system delivers electricity to homes and businesses.
 
During the stipulation period, AEP Ohio spent approximately $60.5 million to improve reliability on the designated circuits, without increasing rates or deferring costs.  This amount includes approximately $21.3 million of Capital investment and $39.2 million of Operation and Maintenance expenses.  This expenditure was above and beyond the $427 million that was spent, during the two-year period, that directly impacts distribution system performance.  The $427 million is comprised of approximately $245.7 million of Capital investment and $181.3 million of Operation and Maintenance expenses.
 
Among AEP Ohio’s accomplishments during the stipulation period:

  • Performance goals were exceeded for the lowest-performing 25 percent of AEP Ohio’s circuits
  • The work performed contributed to a progressive improvement in customer outage duration minutes
  • The PUCO’s Public Interest Center experienced a progressive reduction in AEP Ohio’s customer outage complaints, when the data are adjusted to recognize the effects of major storms.
 
“These accomplishments were the result of AEP Ohio’s aggressive work plan to address the leading causes of electric service distribution interruptions,” said AEP Ohio President and COO Kevin Walker.  “While we regularly pursue mitigation efforts as part of ongoing service reliability improvements, we recognized the need to accelerate our efforts.”  
 
Although AEP Ohio did not realize the SAIDI targets concerning the remaining 75 percent of circuits during the stipulation period, AEP Ohio encountered unforeseen circumstances and emerging issues, such as distribution line equipment failures and distribution station outages, that influenced the SAIDI results.  As a result, AEP Ohio developed and implemented remediation programs designed to address these issues. 
 
Increases in uncontrollable events, including vehicle accidents and mutual assistance support, also influenced SAIDI results.  From 2002 to 2005, service outages caused by vehicle accidents increased approximately 26 percent.  During a seven-month period from April to October 2005, approximately 15 percent of normally available AEP Ohio line resources, and 11 percent of forestry resources were dispatched to hurricane-ravaged southern states to assist in efforts to restore service, as part of the industry’s long-standing mutual assistance program.  This mutual assistance activity was more than double that of 2004.
 
In addition to the post-stipulation final report, AEP Ohio filed a self-complaint in which it proposes that the PUCO implement a process whereby AEP Ohio would present enhanced service reliability programs, including expected service reliability impacts and associated costs.
 
  “AEP Ohio recognizes that customer expectations are changing in the digital age, and our customers are much more sensitive to outage frequency and duration, including momentary interruptions,” said Walker.  “Those changing customer expectations make it clear that additional investments are needed to improve the electric grid in Ohio.  AEP Ohio’s distribution base rates were set more than a decade ago and, without additional infrastructure investments, we are challenged to maintain the desired reliability.  We look forward to continuing the dialogue with the PUCO, Ohio Consumers’ Counsel and other interested parties to ensure continued reliability and system performance.”
 
AEP Ohio provides electricity to 1.4 million customers of major AEP subsidiaries Columbus Southern Power Company and Ohio Power Company in Ohio, and Wheeling Power Company in the northern panhandle of West Virginia. AEP Ohio is based in Gahanna, Ohio, and is a unit of American Electric Power.
 
American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states.  AEP is the nation’s largest generator of electricity, owning more than 36,000 megawatts of generating capacity in the U.S.  AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.  AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia, West Virginia and Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas).  American Electric Power, based in Columbus, Ohio, is celebrating its 100th anniversary in 2006.

Doug Flowers
General Manager, Corporate Communications
AEP Ohio
(614) 883-6675

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