1. 1 Presentation to: SWEDE Conference Austin, TX May 2, 2013 Tom Weaver, PE Historical Voltage Range VVO Range 120 124 128 116 112 108 104 “A” Service “A” Utilization “B” Utilization “B” Service American Electric Power’s Experience with Volt/Var Optimization

2. 2 Volt VAR Impacts on Customer’s Motors Real Power consumption is 8% lower @ 115V than at 125V kVAR ↓ ~ 20% kW ↓ ~ 8%

3. 3 Volt VAR Optimization Architecture 3 Volt VAR Controllers Mesh Network Mesh Master EOL Monitors Line Regulators Line Capacitors DMS - GENe Fiber or Mesh

4. 4 AEP’s Volt / VAR Optimization Technology Deployments AEP Ohio : – 17 circuits in service – Additional circuits being considered to meet EE State Targets Indiana & Michigan Power Co.: – 9 circuits in service – Planning to include VVO as an EE Program Public Service Company Oklahoma : – 11 circuits in service Kentucky Power Co. : – 25 circuits going in service in 2013 – Planning to include VVO as an EE Program

5. 5 5 AEP Ohio: Gahanna – 4505 Voltage Profile Substation EOL 2 CAP 2CAP 3 Without AdaptiVolt™ = 6-7-11 @ 4:30 pm With AdaptiVolt™ = 6-6-11 @ 4:30pm REG Flatter voltage profile, lower voltage, reduced tap changer operations

6. 6 AEP Ohio: East Broad 1406 Voltage Profile Normal Operation = 7-23-10 @4:44pm Volt / Var Control Operating = 7-24-10 @4:44pm Substation EOL 55 CAP 1 CAP 3 CAP 4 REG 1 REG 2 CAP 2

7. 7 Demand and Energy Reduction Results VVO technology works as-expected  Testing demonstrates ~2-4% energy and demand reduction is achievable.

8. 8 Example of Energy Savings on Circuit 4503

9. 9 SCADA / PI View

10. 10 SCADA / PI View

11. 11 “Value” of VVO Compared to Generation Alternatives Levelized cost of VVO is in the low part of the Energy Efficiency range due to low initial capital cost and no on-going fuel cost “LEVELIZED COST OF ENERGY ANALYSIS “– VERSION 3.0 Lazard, February 2009

12. 12 VVO for Energy Efficiency / Capacity Reduction Energy Efficiency (24/7 Operation) – Help meet state Energy Efficiency targets – Receive incentives / participate in DR markets – TRCs 2 to 3 – better than many current programs – Reduce Energy Consumption by Customers – Not limited by “participation rates” – Reduce Emissions – Relieve Transmission Congestion Capacity (Demand Reduction Only ) – Reduce amount of capacity required at peak / critical times – Short payback period if generation charges are based on peak demand – Defer investment in capacity replacement or upgrades – Engage in DR Market – Relieve Transmission Congestion

13. 13 Questions? Tom Weaver – tfweaver@aep.com