Reliability Investments

Maintaining the approximately 260,000 miles in our transmission and distribution network comes with an array of challenges while we are upgrading the infrastructure to meet modern day needs. These challenges include the age of our infrastructure, the threat of external interruptions, the transformation of our generation fleet, the difficulty of siting new facilities, new and future environmental regulations, and the magnitude of investments needed. In response, we are investing in infrastructure and using technology and data analytics to predict, prevent and mitigate service disruptions and to better communicate with our customers.

AEP’s investments to modernize transmission infrastructure provides direct long-term reliability benefits to our customers. Improved reliability is one of the most important benefits that electricity customers receive from transmission investments. Based on a sampling of 14 transmission line rebuild projects that have been completed, customer outage duration was reduced by 97 percent from pre-investment levels.

In a report commissioned by AEP from the Brattle Group on the direct and indirect impact of our transmission investments, Brattle applied this historical effectiveness to a sample of 62 transmission local reliability upgrades targeted for completion in the 2012-to-2019 capital budget. The report concludes that the investments will yield an estimated customer outage reduction benefit of approximately $75 million per year and a net present value of $1.4 billion of benefits over the lifetime of these local transmission investments. Learn more about valuing the grid. (link to section)

Transource Energy, a partnership between American Electric Power and Great Plains Energy, is building a new overhead electric transmission project in Pennsylvania and Maryland to increase consumer access to more affordable power in the region.

Regional Transmission Organizations (RTOs) often determine upgrades to the transmission grid and assign companies, such as AEP, these projects to improve reliability. Recently, the Midcontinent Independent System Operator (MISO) approved construction of a new 765-kilovolt (kV) transmission line stretching approximately 70 miles across northern Indiana to maintain reliability in that region, assure access to regional sources of competitively priced power and provide additional energy to the area.

The project is being built by Northern Indiana Public Service Company (NIPSCO) and Pioneer Transmission, a joint venture between AEP Transmission and Duke Energy. The 70-mile line approved by MISO is the first segment of a larger 290-mile proposed transmission project in that region. The new Greentown-Reynolds project is one of 17 priority projects approved by MISO; it is expected to be in-service in mid-2018.

Through joint ventures such as Transource®, a partnership to invest in competitive transmission projects, AEP is well-positioned to expand transmission investment outside of our traditional service territory. So far, these joint ventures enabled us to expand our transmission footprint to 13 states with projects under development in two additional states. In 2017, Transource announced plans to develop the Independence Energy Connection (IEC), a new overhead electric transmission project in Pennsylvania and Maryland, to increase consumer access to more affordable power in the region. The $320 million project will connect two existing 500-kV transmission lines in Pennsylvania to two existing substations in Maryland.

As AEP continues to improve the reliability of the grid, one of the most recent advances came in the Transmission Operations Center. Our transmission system operators use a State Estimator tool to view grid behavior for system overloads in real-time and under certain conditions. In the past, the tool had only data associated with AEP’s transmission system and minimal information about how neighboring systems were functioning. AEP began modeling neighboring utilities’ transmission systems in the State Estimator to get a more accurate view of overall grid behavior.

Being able to “see” how neighboring utilities’ transmission systems are behaving allows us to more effectively plan and complete our own transmission projects. As we invest large amounts of capital, we face challenges with coordinating outages with other utilities. This information now gives us a clearer view of these situations that put stress on the grid. In addition, these improvements give us a competitive advantage to better prepare system operators to monitor and operate in regions outside of our traditional service territory. This is important as we grow our footprint through our Transource business unit.