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1 Wind Opportunities for West Virginia and AEP / Appalachian Power Canaan Valley Resort, WV September 18 th, 2007.

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Presentation on theme: "1 Wind Opportunities for West Virginia and AEP / Appalachian Power Canaan Valley Resort, WV September 18 th, 2007."— Presentation transcript:

1 1 Wind Opportunities for West Virginia and AEP / Appalachian Power Canaan Valley Resort, WV September 18 th, 2007

2 2  AEP Overview  2007 Appalachian Power Wind RFP  Wrap-up Overview

3 3 The AEP Footprint Strength & Scale in Assets & Operations AEP enjoys significant presence throughout the energy value chain 5.1 million customers in 11 states Industry-leading size and scale of assets: Coal & transportation assets: Control over 8,000 railcars Own/lease and operate over 2,600 barges & 51 towboats Coal handling terminal with 20 million tons of capacity

4 4 AEP’s Climate Strategy  Being proactive and engaged in the development of climate policy  International Emissions Trading Association (IETA)  Electric Power Research Institute (EPRI)  Pew Center on Global Climate Change  e8  Global Roundtable on Climate Change  Investing in science/technology R&D  FutureGen Alliance  US DOE research on carbon capture and sequestration at our Mountaineer Plant  EPRI – combustion technologies  MIT Energy Laboratory  B&W – Oxy-Fuel  Taking voluntary, proactive action now, demonstrating voluntary programs can work and setting policy precedents thru CCX  Chicago Climate Exchange (CCX)  EPA Climate Leaders  EPA SF-6 Emission Reduction Partnership for Electric Power Systems Program  Asia-Pacific Partnership  DOE 1605B- voluntary reporting of GHGs Program  Business Roundtable Climate Resolve  Numerous forestry activities  Evaluating longer term investment decisions such as new generation and carbon capture and storage (e.g., IGCC, Ultra-supercritical) AEP MUST BE A LEADER IN ADDRESSING CLIMATE CHANGE

5 5 AEP’s Long-term GHG Reduction Portfolio Renewables (Biomass Co-firing, Wind) Off-System Reductions and Market Credits (forestry, methane, etc.) Commercial Solutions of New Generation and Carbon Capture & Storage Technology Supply and Demand Side Efficiency AEP IS INVESTING IN A PORTFOLIO OF GHG REDUCTION ALTERNATIVES

6 Years of Wind Experience  5 MW Ft. Davis Wind Farm: Early AEP R&D Project ( ) Decommissioned  75 MW Southwest Mesa PPA: Project built on AEP owned land (1998) SWEPCo  150 MW Trent Wind Farm: AEP owned / developed IPP wind farm (2001) AEPEP  160 MW Desert Sky Wind Farm: AEP owned IPP wind farm (2001) AEPEP  147 MW Weatherford PPA: (2005) PSO  151 MW Blue Canyon II PPA: (2005) PSO  94.5 MW Sleeping Bear PPA: Completion in Summer 2007 PSO  200 MW Fowler Ridge PPA: Completion in Q4 – 2008 * I&M / APCo SPP / PSO ERCOT SPP / PSO Desert SkyTrent SPP / PSO * Subject to State Regulatory Approvals

7 7 Appalachian Power  About Appalachian Power (APCo):  Serves approximately 1 million customers in West Virginia, Virginia and Tennessee.  Headquarters in Charleston, W. Va.,  4,085 employees, including generating plants  6,732 transmission miles  49,563 distribution miles  6,282 MW of generation (coal, hydro & gas)  $5.6 billion in assets  Appalachian Power participates in AEP-East / PJM Pool with 4 other AEP utility units

8 Appalachian Power Wind RFP  RFP issued on behalf of APCo for 260 MW  Wind projects to be online by 12/31/08  20 year purchased power agreement  Time of day pricing (peak, off-peak, seasonal)  Energy, capacity and environmental benefits (RECs)  Price and non-price evaluation factors  Bids  22 project bids from 12 Bidders that participated in combined APCo / I&M Wind RFPs  Approximately 2,300 MW total wind were bid  Bids received from projects located in IL, IN, MD, WV and PA

9 9 Wind in PJM Interconnect Queue 1 1. Does not include OH, IN and IL wind projects in MISO queue

10 10 Supply Acquisition Timeline 2007 Issue RFPApril 2 Bidders Meeting – CharlestonApril 12 th Bids DueMay 1st Evaluate Bids / Short ListMay 1 – 15th Negotiate PPAsJune - September Seek approval of PPA and cost recoverySeptember APCo Regulatory ApprovalsNovember/December Bidder Regulatory ApprovalsDecember Project Online (PTC in-service deadline)Late 2008

11 11 APCo RFP Status  1 st PPA: Fowler Ridge Wind Project  100 MW for APCo and 100 MW for I&M  Part of 750 MW project when fully built out  Attractive pricing  2008 completion  Experienced team – Developed by BP Wind Energy  Additional PPA announcements forthcoming

12 12 Challenges for Wind  Nationwide:  Turbine availability - limited  Turbine costs – going up  Construction costs – going up  Transmission – pacing item for wind  Lack of long-term PTC – impacts market  Location of resources - rural  Intermittency – wind is not a capacity resource  West Virginia:  Permitting process- can be lengthy

13 13 What is AEP doing?  Broad base of portfolio solutions such as IGCC  Committing to add wind to its generation mix  Leading development of transmission solutions via its I-765 transmission superhighway  Committing to R&D on battery storage solutions which could help integration of renewables  Engaging on policy front

14 14 Existing 765 kV New 765 kV AC-DC-AC Link

15 15 Questions Jay Godfrey Director – Renewable Energy Supply American Electric Power (614)


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