Business Performance

Aging Infrastructure

The U.S. electric power grid was built more than a century ago. Although investments have been made to improve reliability and enable the grid to handle new and emerging technologies, a number of factors are increasingly affecting reliability. These include the age of the equipment, weather events, permitting challenges for new infrastructure, and economics. AEP has developed a diagnostic tool to help us better manage reliability through maintenance.

A new central Asset Health Center (AHC) platform is being implemented by our Transmission team to virtually monitor the condition of substation equipment in the field. The AHC is being developed to prevent failures, enable condition-based maintenance and prioritize replacement of aging or poorly performing equipment.

Investing in our infrastructure is strategically important for AEP because capital investments improve customer satisfaction and system reliability while improving operating efficiencies and delivering value to our shareholders. But there is a finite amount of available resources, and there are competing demands for their use. In 2014, we expect to invest $2.8 billion (excluding AFUDC debt and equity) in our transmission and distribution business and approximately $875 million in our regulated generation business to improve reliability and the customer experience. Ensuring that capital is deployed and invested where it maximizes the value to our customers is the focus of a collaborative effort called “Enabling Capital Excellence,” part of the company’s commitment to continuous improvement.

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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