Opportunities & Risk

Distribution Breakthroughs

AEP’s gridSMART® initiative integrates a host of advanced grid technologies into the existing electric network that will improve service quality and reliability, lower energy consumption and save money. The new technologies can help us improve our efficiency, identify and respond to outages more quickly and better monitor and control operation of the distribution grid. gridSMART® also provides customers with new and innovative programs and pricing options that allow them to monitor and control their own energy use, saving resources and money. We are deploying smart grid technologies in several of our jurisdictions with regulatory support.

Status of Our gridSMART® Projects Now in Progress:

gridSMART® is designed to demonstrate the potential benefits of the smart grid by integrating advanced grid technologies in several jurisdictions with regulatory support.

  • AEP Ohio is deploying a comprehensive group of smart grid technologies in an innovative demonstration project with more than 110,000 customers. The $150 million project is being funded through a $75 million federal grant, cost recovery support from the Public Utilities Commission of Ohio and in-kind contributions from vendors.
  • AEP Texas is deploying a one-million-meter smart grid network, along with $1 million in energy use display devices for low-income customers. The $308 million project is targeted for completion by the end of 2013. We are recovering costs through an 11-year surcharge on customer bills.
  • I&M has deployed a smart grid network to 10,000 customers. The $7 million project was funded pursuant to a settlement agreement approved by the Indiana Utility Regulatory Commission. I&M was the first to deploy this technology through the gridSMART® initiative.
  • PSO has deployed smart meters to more than 31,000 customers, approximately 14,300 of whom will be served on circuits equipped with advanced grid management technologies. The project is being financed through an $8.75 million American Reinvestment Recovery Act low-interest loan from the Oklahoma Department of Commerce. An additional $2 million in annual revenues for cost recovery was approved by the Oklahoma Corporation Commission.

Applying technology on our distribution system through monitoring and controlling voltage is another advancement to reduce the amount of energy that must be produced and delivered to customers on demand. Known as Volt/Var Optimization, this technology has proven its technical viability and energy efficiency potential. Typically, distribution lines deliver electricity at a voltage between 114 and 126 volts. Using the full range of voltage (closer to the 126 volts) is common practice in our industry; it has been a way to ensure the strength of the voltage between the point of origin and the customer. But studies and recent experience are showing that optimizing voltage – delivering electricity at the lower end of the range – reduces customer energy demand and consumption, and thus lowers their bills.

Deployment of Volt/Var Optimization began in AEP Ohio as part of the gridSMART® Demonstration Project and has since expanded to I&M, KPCo and PSO. AEP’s operating companies will be selectively reviewing options for deploying this technology where conditions are favorable.

Integrated Volt/Var Control installation was one of AEP’s 11 research projects awarded the 2011 Electric Power Research Institute’s Technology Transfer Award. The award recognizes the value of collaborative research to the electricity sector and its customers.

We continue testing Community Energy Storage technology, but technical challenges have stood in the way of making progress. Maintaining power with energy storage is designed to be seamless; customers connected to the systems may be unaware that there has been an outage and they are using stored electricity.  Perfecting energy storage would be a significant game changer for our industry because it would allow customers to store electricity to use when they need it most, reducing demand on our facilities using the stored energy during an outage or periods of peak demand and, by extension, reducing our operational costs and environmental impacts.

AEP’s Transmission Strategy

AEP’s transmission strategy is supporting economic development and job growth, while bringing us closer to our supply line.

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