1. 1 Presentation to: VA Governor’s Conference on Energy October 16, 2013 Tom Weaver, PE American Electric Power’s Experience with Volt/Var Optimization Historical Voltage Range VVO Range 120 124 128 116 112 108 104 “A” Service “A” Utilization “B” Utilization “B” Service

2. Volt VAR Optimization – Basic Concepts 2 Historical Voltage Range VVO Range 120 124 128 116 112 108 104 “A” Service “A” Utilization “B” Utilization “B” Service CVR Calculation – 60 W Incandescent Bulb

3. 3 Volt VAR Impacts on Customer’s Motors Real Power consumption is 8% lower @ 115V than at 125V kVAR ↓ ~ 20% kW ↓ ~ 8%

4. 4 Volt Var Optimization will reduce customer peak demand and energy consumption at the meter 123 Volts 119 Volts 1100 kW 609,000 kWh 1067 kW 590,730 kWh Example: Customer Demand and Energy Savings “Big Box” Store

5. 5 Volt VAR Optimization Architecture 5 Volt VAR Controllers Mesh Network Mesh Master EOL Monitors Line Regulators Line Capacitors DMS - GENe Fiber or Mesh

6. 6 AEP’s Volt / VAR Optimization Technology Deployments AEP Ohio : – 17 circuits in service – 80 circuits included in Phase II gridSMART to meet State EE Targets Indiana & Michigan Power Co.: – 9 circuits in service – day on/off testing October - December – Filed for inclusion of the 9 circuits as an EE Program in IN – Proposed that 75 circuits be included as EE by 2019 Public Service Company Oklahoma : – 11 circuits in service Kentucky Power Co. : – 25 circuit project in progress – 21 circuits to start day on/off testing in October

7. 7 Example of Energy Savings on Circuit 4503 using Utilidata AdaptiVolt System

8. 8 SCADA / PI View

9. 9 “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

10. 10 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

11. 11 Questions? Tom Weaver – tfweaver@aep.com