Business Performance

Grid Resiliency

One of the greatest physical threats to the electricity infrastructure is severe weather. AEP was fortunate that 2013 brought less severe weather to our service territory than 2012 did, when an early-summer derecho (a severe windstorm accompanied by heavy rain and hail) knocked out power to more than 1.4 million of AEP’s 5.3 million customers and caused millions of dollars in damage. In addition to financial costs, outages also create political and social risks, especially when the disruption is prolonged.

One of the greatest physical threats to the electricity infrastructure is severe weather.

To improve the performance of the physical infrastructure of the grid, we created a Distribution Storm Hardening Strategy Team to recommend strategies that will ease the impacts of severe weather events on our customers by making the infrastructure more resilient and easier to fix when it does break.

New design criteria to strengthen, or harden, the distribution system took effect in early 2014. We have elected to design new and replacement poles to withstand wind speeds and ice accumulation above and beyond the National Electrical Safety Code (NESC) requirement for our service territory. The ice build-up component has been increased to one inch of ice in the central and northern portions of AEP’s service territory from a quarter- to a half-inch, respectively. In the southern portion of our territory, where high winds are the primary driver of major storm damage, we have increased the system’s ability to withstand high winds from 60 mph to 90 mph. Along the Gulf coast we continue to design facilities to withstand 150 mph winds.

These hardening measures are predicted to increase the strength of electric structures by at least 25 percent with nominal increase in cost. In addition, we developed an assessment tool to help us determine where to deploy capital funds to maximize the benefits of grid-hardening initiatives. Among the criteria to be used are the number of customers served; the type of customer (how many on a particular circuit are considered “critical” customers, such as hospitals and nursing homes, law enforcement agencies, and water or wastewater facilities); the age of the poles; and the average duration of outages. This will allow us to put our resources to work where they deliver the most value for our customers.

Nationally, the hardening effort has been driven by state utility commissions, and there is regulatory support for these initiatives in our service territories.

On Dec. 31, 2013, the Oklahoma Corporation Commission approved Public Service Company of Oklahoma’s application to broaden the scope of an existing cost recovery rider to include the costs of system hardening and grid resilience activities to strengthen the company’s distribution system against weather-related events. Examples of system hardening include installing stronger structures and decreasing the distance between poles. Grid resiliency activities include installing devices such as line reclosures and other hardware that splits the system into sections so that, in the event of a fault on one section, the impact remains isolated.

In Indiana, Senate Enrolled Act 560 of 2013 provides a regulatory framework for utilities to implement a Transmission, Distribution and Storage System Improvement Charge (TDSIC) to pay for these initiatives. The TDSIC rider is used to recover costs associated with certain electric infrastructure expansion projects, including those intended to improve safety or reliability; modernize the system; or improve an area’s economic development prospects. Prior to implementing the TDSIC rider, the company will file a seven-year plan with the Indiana Utility Regulatory Commission with details of the projects under consideration.

In Ohio, the existing Distribution Investment Rider helps us fund distribution system improvements, including grid hardening.

AEP is among other utilities participating in the Electric Power Research Institute’s three-year Grid Resiliency Project. Started in 2013, the project will provide our industry with new tools and strategies to improve the distribution system’s ability to withstand severe weather events.

Our Commitment to Zero Harm

At AEP, our focus on zero harm - zero injuries, illnesses or fatalities - means compliance with regulations is just a starting point. We are committed to continuous safety and health improvement.

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