Business Performance

2014 Performance

We track our transmission and distribution reliability performance with several metrics that are used industrywide. These indicators show us how reliable our system is and how our customers are impacted when it is not. They do not include major storms. The investments we are making in our transmission and distribution system improve reliability and operating efficiency and prepare the system for new technologies in the future.

The System Average Interruption Duration Index (SAIDI) represents how many minutes the average customer experiences an interruption in electric service in a given year. During 2014, the AEP System SAIDI was 219.9 minutes, excluding major events, a 9.8 percent increase from 2013. The growth of vegetation contributed to about 32 percent of SAIDI results and failure of distribution line equipment accounted for about 21 percent of service interruptions.

The System Average Interruption Frequency Index (SAIFI) represents the number of interruptions experienced by customers in a year. During 2014, the system’s SAIFI was 1.375, a 3.5 percent increase from 2013. Vegetation and distribution line equipment failures were also the major contributors to SAIFI performance.

The Customer Average Interruption Duration Index (CAIDI) represents the average length of time it takes to restore service when an outage occurs. AEP’s 2014 CAIDI was 160.0 minutes, a 6.2 percent increase from 2013. A combination of factors are responsible, including a reduction in the number of shorter-duration outages that historically affected larger numbers of customers that skew the metric upward and an increase in non-major storm events.

Vegetation-related outages and equipment failure are among the biggest challenges to AEP’s service reliability. Managing vegetation on our rights of way (ROW) is key to maintaining transmission and distribution system reliability. AEP manages the trees and vegetation around power lines using a combination of performance-based (such as targeting low performing circuits) and cycle-based maintenance strategies. Maintaining a regular tree-trimming cycle is a significant expense that directly affects customer bills. During the past five years, AEP has invested more than $1 billion in vegetation management, including $281.9 million in 2014. The issue of reliability has prompted several states to consider or implement shorter intervals between tree trimming programs.

In 2014, the Public Service Commission of West Virginia approved a new vegetation management program for Appalachian Power and Wheeling Power. The new program will move tree trimming and other vegetation management to a four-year cycle. It will take six years to fully implement the program, which will lessen future storm impacts. In its approval, the Commission concluded that severe weather incidents since 2009 made it clear that utility distribution and transmission systems should be made more resistant to damage from vegetation during major storms.

In early 2015, the Public Utilities Commission of Ohio reaffirmed the value of two existing programs designed to improve reliability and replace or upgrade aging infrastructure. AEP Ohio’s Distribution Investment Rider allows for proactive investments in aging distribution infrastructure in order to maintain and improve service reliability. The PUCO also approved AEP Ohio’s request to continue its Enhanced Service Reliability Rider that supports a proactive vegetation management program to reduce the impact of weather events to reliability and to maintain overall system reliability.

Representative transmission reliability projects that are under way across our service territory include several major upgrades and enhancements across the state of Ohio to modernize the state’s transmission network. Power plant retirements in West Virginia centered in the Kanawha and Ohio River valleys require new transmission to accommodate changes in power flows that will occur as a result of the retirements. The new lines and upgraded substations are expected to be in-service in spring 2017. In another project, AEP is building its first 500-kV station in Louisiana that is expected to be in service in March 2016. Once complete, this project will relieve potential overloads on neighboring transmission lines, support local growth and provide a stronger platform for power from the Dolet Hills Power Plant, which we partially own.

One of the most significant reliability projects under way is in Texas along the Lower Rio Grande Valley (LRGV) to deliver additional electricity to the fast-growing area. This project will provide emerging wind generation and other resources access to the grid. The projects are being jointly constructed by Texas-based Electric Transmission Texas, LLC. (ETT), a joint venture of subsidiaries of AEP and Berkshire Hathaway Energy Company and Sharyland Utilities. ETT has other projects under way, including more than 20 projects with various completion dates scheduled through 2024. ETT will have more than $3 billion in investments over the next decade.

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