1. Reliability Valuation in AEP Texas
A Study on Cost Vs Returns

2. Introduction Study performed in 2009 Regression analysis
What is a reliability program?
Does it move the needle?
Reduction vs prevention
2009 – we’ve implemented a lot of changes to the reliability programs since then
Regression analysis – compared dollars spent in the past vs reliability improvement on those outage types
Does it move the needle? - Do we see real SAIDI or SAIFI benefits?
Reduction vs. prevention? - Does it make an outage smaller (sectionalizing) or does it prevent it to begin with (forestry)

3. Caveats Analysis – Correlation or Causation? Diminishing Returns
Some outages mis-labeled
Diminishing Returns
Some programs very O&M heavy
Results specific to AEP Texas
The good ol’ disclaimer…
Just because numbers went down, we can’t be entirely sure the investment is what drove that
Some programs can only go so far before you saturate your system or before you run out of things to do
GOOD OL’ DISCLAIMER – Past performance does not guarantee future results

4. Results Explanation Projection Dollars per customer minutes out
Percent capital

5. Strong Performers D-Line inspection and repair: Lightning mitigation:
$1.00/CMI, 24% capital
Lightning mitigation:
$1.03/CMI, 100% capital
Sectionalizing:
$1.70/CMI, 99% capital
Station animal guards:
$4.71/CMI, 80% capital

6. More Strong Performers
Replacing older relays
$5.42/CMI, 100% capital
Installing station SCADA
$5.67/CMI, 95% capital
Feeder ties/upgrades
$8.50/CMI, 95% capital

7. Weaker Than Expected Wire replacement: Performance-based forestry
$33.98/CMI, 95% capital
O&M savings from OT work
Performance-based forestry
$48.64/CMI, 24% capital
Pole replacement:
$495.05/CMI, 78% capital
Safety
Possibly skewed
Performance-based means targeting areas that have already had tree problems (non-proactive.)

8. Other Notable Findings
Cycle-based forestry
$15.70/CMI, 18% capital
Hybrid forestry
$27.55/CMI, 18% capital
System hardening – not much data in 2009
Distribution Automation – almost no data in 2009
Cycle-based forestry – purely trimming circuits on a cycle.
Hybrid – some cycle, some performance-based.

9. Conclusion No plans to repeat the study at AEP
SAIDI and SAIFI not the only drivers
Customer satisfaction
Overtime O&M reduction
Safety
Don’t skimp on inspections!