Meter Tampering Presentation American Electric Power Texas Central Company Texas North Company

PROCESS DEALING WITH METER TAMPERING Discover tampering –Sources of Leads Field employees/Meter Readers Inversion/removal reports 30% drop report Zero usage Report Broken Seal Report Call Center/anonymous tips Law Enforcement REPs/CRs Landlords

PROCESS DEALING WITH METER TAMPERING Employee is sent to the location of the suspected tampering to investigate. Employee checks enclosure seal. If enclosure seal is cut/missing, meter is removed and the wire connections and meter seal are checked. If tampering is discovered, the Revenue Protection Coordinator is contacted to coordinate gathering the evidence

PROCESS DEALING WITH METER TAMPERING Revenue Protection Coordinator ensures: Photographs are taken, Physical evidence is secured, The enclosure is left in a safe condition, Proper charges are assessed against the customer.

NUMBER OF PERSONNEL ASSIGNED TO ENERGY THEFT All field employees are trained to detect and have responsibility for helping to identify tampering 4 full time Revenue Protection Coordinators strategically located throughout AEP Texas

CHANGES MADE IN THE LAST YEAR Within the last year, AEP has not made any substantive changes as to how it detects and investigates tampering. The only changes made have been in what and how to make the evidence available to the REPs.

NUMBER OF TAMPERING INCIDENTS YearTCCTNCTOTAL YTD

BACKBILLING STATISTICS—2008 NUMBER OF MONTHS BACKBILLED 1-3 Months22% 4-6 Months40% 7-12 Months65% Months80% **Only 20% of the tampering cases involve back-billing for more than 18 months

BACKBILLING STATISTICS—2009 NUMBER OF MONTHS BACKBILLED 1-3 Months25% 4-6 Months47% 7-12 Months73% Months86% **Only 14% of the tampering cases involve back-billing for more than 18 months

METER READ STATISTICS Number of meters read per day –AEP Texas reads an average of 61,186 meter per day. Some are manually read, some are read with AMR mobile collectors and some are read through a power line carrier

METER READ STATISTICS Number of meters read per day/per meter reader –The average meters physically read each day by meter readers is 274. The actual reads per day can vary from 100 to 400 depending on rural or urban routes.

METER READ STATISTICS Do meter readers have instant communications with the meter theft team at the TDU? –Typically, Meter readers make notations in the hand-held processor. Their data is then produced in reports that are reviewed for required action. If there is a dangerous or hazardous condition, the Meter Reader may be able to communicate with cell phone or company radio.

METER READ STATISTICS When discovered, how promptly is the investigation started? –All incidences of meter tampering are investigated as soon as possible. –If it is a field service employee that makes the discovery, they investigate while at the location. –If it is discovered by a Meter Reader, he will use a coding system in his hand-held processor that initiates an investigative order once the data is uploaded into the computer system at night. –If a noted hazard is reported, it is investigated immediately.

METER READ STATISTICS When is the meter replaced? –The meter is replaced for a number of reasons if there is physical damage to the meter: Hole in the glass, Broken inner seal, Tampered potential link, Inserted resistor, Customer installed switch inside the meter, When there is evidence that a stolen meter is also being used at the premise.

METER READ STATISTICS Where does the old meter go? –AEP Texas places the meter in a secure evidence locker accessible only by our revenue protection coordinator.

METER READ STATISTICS How long do you keep the old meter? –The meter is kept for 3 years Do the meter readers have cameras? –No. Meter readers do not have a camera, but the specialists that follow-up on the investigation of suspected tampering do have cameras.

AGGREGATE $ AMOUNT CHARGED TO REP 2008 –Backbilling Total Backbilling$185,509 Unrecoverable $80,533 Total Value of Tampering$266,042 –Meter tampering fees and related charges $378,823.35

AGGREGATE $ AMOUNT CHARGED TO REP 2009 YTD –Backbilling Total Backbilling$157,348 Unrecoverable $47,026 Total Value of Tampering $204,374 –Meter tampering fees and related charges $452,128.74