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0 52nd EEI Financial Conference | aep.com
2017 AEP Fact Book
52nd EEI Financial Conference
November 5-8, 2017
Lake Buena Vista, Florida
1 52nd EEI Financial Conference | aep.com
Bette Jo Rozsa Managing Director Investor Relations 614-716-2840 [email protected]
Darcy Reese Director Investor Relations 614-716-2614 [email protected]
“Safe Harbor” Statement under the
Private Securities Litigation Reform Act of 1995
INVESTOR RELATIONS
This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its
Registrant Subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause
actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the
forward-looking statements are: the economic growth or contraction within and changes in market demand and demographic patterns in our service territories,
inflationary or deflationary interest rate trends, volatility in the financial markets, particularly developments affecting the availability or cost of capital to finance new
capital projects and refinance existing debt, the availability and cost of funds to finance working capital and capital needs, particularly during periods when the time lag
between incurring costs and recovery is long and the costs are material, electric load and customer growth, weather conditions, including storms and drought
conditions, and our ability to recover significant storm restoration costs, the cost of fuel and its transportation, the creditworthiness and performance of fuel suppliers
and transporters and the cost of storing and disposing of used fuel, including coal ash and spent nuclear fuel, availability of necessary generation capacity, the
performance of our generation plants and the availability of fuel, including processed nuclear fuel, parts and service from reliable vendors, our ability to recover fuel and
other energy costs through regulated or competitive electric rates, our ability to build transmission lines and facilities (including our ability to obtain any necessary
regulatory approvals and permits) when needed at acceptable prices and terms and to recover those costs, new legislation, litigation and government regulation,
including oversight of nuclear generation, energy commodity trading and new or heightened requirements for reduced emissions of sulfur, nitrogen, mercury, carbon,
soot or particulate matter and other substances that could impact the continued operation, cost recovery and/or profitability of our generation plants and related assets,
evolving public perception of the risks associated with fuels used before, during and after the generation of electricity, including nuclear fuel, a reduction in the federal
statutory tax rate could result in an accelerated return of deferred federal income taxes to customers, timing and resolution of pending and future rate cases,
negotiations and other regulatory decisions, including rate or other recovery of new investments in generation, distribution and transmission service and environmental
compliance, resolution of litigation, our ability to constrain operation and maintenance costs, our ability to develop and execute a strategy based on a view regarding
prices of electricity and gas, prices and demand for power that we generate and sell at wholesale, changes in technology, particularly with respect to energy storage
and new, developing, alternative or distributed sources of generation, our ability to recover through rates any remaining unrecovered investment in generation units that
may be retired before the end of their previously projected useful lives, volatility and changes in markets for capacity and electricity, coal and other energy-related
commodities, particularly changes in the price of natural gas, changes in utility regulation and the allocation of costs within regional transmission organizations,
including ERCOT, PJM and SPP, our ability to successfully and profitably manage our competitive generation assets, including the evaluation and execution of strategic
alternatives for these assets as some of the alternatives could result in a loss, changes in the creditworthiness of the counterparties with whom we have contractual
arrangements, including participants in the energy trading market, actions of rating agencies, including changes in the ratings of our debt, the impact of volatility in the
capital markets on the value of the investments held by our pension, other postretirement benefit plans, captive insurance entity and nuclear decommissioning trust and
the impact of such volatility on future funding requirements, accounting pronouncements periodically issued by accounting standard-setting bodies and other risks and
unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes, cyber security threats and other catastrophic events.
2 52nd EEI Financial Conference | aep.com
TABLE OF CONTENTS AEP Overview Operating Company Detail for:
AEP: The Premier Regulated Energy Company Appalachian Power Company (including Wheeling & Kingsport)
AEP Corporate Leadership Indiana Michigan Power Company
AEP Operational Structure Kentucky Power Company
AEP Service Territory Ohio Power Company
2016 Retail Revenue Public Service Company of Oklahoma
Generation Fleet Southwestern Power Company
Transmission Line Circuit Miles Detail AEP Texas
Distribution Line Detail
Rate Base & ROEs Regulated Generation
Summary of Rate Case Filing Requirements Regulated Generation Summary
Retail Recovery Mechanisms by Jurisdiction Owned Regulated Generation
Storm O&M Recovery Mechanisms by Jurisdiction Regulated Fuel Procurement – 2018 Projected
Jurisdictional Off-System Sales Sharing Summary Regulated Coal Delivery – 2018 Projected
Commission Overview Jurisdictional Fuel Clause Summary
Transforming Our Generation Fleet Transmission Initiatives
Transforming Our Generation Fleet AEP Transmission Holdco Legal Entity Structure
Investments Driving Emission Reductions AEP Transco Business Overview
Dramatic Reductions in Emissions AEP Transco Project Mix & Footprint
Large-scale Renewable Opportunities Transmission Investment Needs
Delivering Clean Energy Resources Transco State & FERC Regulatory Compacts
Renewable Resources FERC Formula Rate & Filings
Renewable Portfolio/Energy Efficiency Standards Active Joint Venture Projects
Regulated & Competitive Retirements Competitive Transmission – Transource
Regulated Environmental Controls Grid Assurance Executive Summary & Timeline
Competitive Environmental Controls BOLD Strategy
Additional Environmental Regulations Evolution of Transmission Trackers
Favorable Recovery of Transmission Investment
Financial Update
Capitalization & Liquidity Contracted Renewables & Other
Pension & OPEB Estimates Organizational Structure
AEP Banking Group Contracted Renewables
AEP Credit Ratings Competitive Generation – Owned & PPA
Long-Term Debt Maturity Profile Competitive 2016 Fleet Statistics
Debt Schedules Retail – AEP Energy
3 52nd EEI Financial Conference | aep.com
AEP: THE PREMIER REGULATED ENERGY COMPANY
American Electric Power is one of the largest electric utilities in the United States, delivering electricity and custom energy
solutions to nearly 5.4 million customers in 11 states. AEP’s headquarters is in Columbus, Ohio. (NYSE: AEP)
AEP’s regulated electric assets
include the following:
Approximately 23,000 megawatts of regulated
owned generating capacity and approximately
4,800 megawatts of regulated PPA capacity in
3 RTOs.
Approximately 40,000 circuit miles of
transmission lines, including more than 1,150
miles of Transco lines and over 2,100 miles of
765kV lines, the backbone of the electric
interconnection grid in the Eastern U.S.
AEP Transco has approximately $4.7B of
transmission assets in service with additional
capital expenditure plans of approximately
$4.3B from 2018 – 2020.
Approximately 219,000 miles of overhead and
underground distribution lines.
AEP consistently produces strong
financial results:
Expecting operating earnings growth of
5% to 7%.
Strong balance sheet including $64 billion of
assets.
Cash dividend paid every quarter since 1910.
Dividend payout ratio of 60 % to 70% of
operating earnings and growing dividend in
line with earnings.
WELL POSITIONED AS A REGULATED BUSINESS
4 52nd EEI Financial Conference | aep.com
AEP CORPORATE LEADERSHIP
Nicholas K. Akins
Chairman, President
and Chief Executive
Officer
Lisa M. Barton
Executive Vice President –
Transmission
David M. Feinberg
Executive Vice President,
General Counsel and
Secretary
Brian X. Tierney
Executive Vice President
and Chief Financial Officer
Charles E. Zebula
Executive Vice President –
Energy Supply
Lana L. Hillebrand
Executive Vice President
and Chief Administrative
Officer
Charles R. Patton
Executive Vice President –
External Affairs
Paul Chodak III
Executive Vice President –
Utilities
Mark C. McCullough
Executive Vice President –
Generation
5 52nd EEI Financial Conference | aep.com
AEP OPERATIONAL STRUCTURE*
* Does not represent legal structure
AEP, Inc.
Regulated Utilities
Appalachian Power Company
Indiana Michigan Power Company
Kentucky Power Company
Public Service Company of Oklahoma
Southwestern Electric Power Company
Ohio Power Company
Wheeling Power Company
Kingsport Power Company
AEP Texas AEP Generating
Company
AEP Transmission Holding Company
AEP Transmission Company
AEP Appalachian Transco
AEP Kentucky Transco
AEP Southwestern Transco
AEP Ohio Transco
AEP Oklahoma Transco
AEP Indiana Michigan Transco
AEP West Virginia Transco
Joint Ventures
Competitive Operations
AEP Energy Supply
AEP Energy
AEP Energy Partners
AEP Generation Resources
AEP OnSite Partners
AEP Renewables
6 52nd EEI Financial Conference | aep.com
AEP SERVICE TERRITORY
VERTICALLY INTEGRATED UTILITIES
Appalachian Power Company (APCo)
Indiana Michigan Power Company (I&M)
Kingsport Power Company (KGPCo)
Kentucky Power Company (KPCo)
Wheeling Power Company (WPCo)
Public Service Company of Oklahoma (PSO)
Southwestern Electric Power Company (SWEPCo)
Texas
Arkansas
Oklahoma
Louisiana Indiana
Michigan
Tennessee
Kentucky
West Virginia
Virginia
7 52nd EEI Financial Conference | aep.com
AEP SERVICE TERRITORY
TRANSMISSION AND DISTRIBUTION UTILITIES
AEP Texas Ohio Power Company (OPCo)
Ohio Texas
8 52nd EEI Financial Conference | aep.com
2016 RETAIL REVENUE
Top 10 Industrial Sectors Across the AEP System By
NAICS Code % of Total
Industrial Sales
331 Primary Metal Manufacturing 14.3%
325 Chemical Manufacturing 13.1%
324 Petroleum and Coal Products Manufacturing 11.8%
486 Pipeline Transportation 7.9%
322 Paper Manufacturing 6.6%
211 Oil and Gas Extraction 5.8%
212 Mining (except Oil and Gas) 5.6%
326 Plastics and Rubber Products Manufacturing 5.6%
336 Transportation Equipment Manufacturing 4.6%
311 Food Manufacturing 4.5%
Source: 2016 10-K
* Note: Figures do not include Other Revenues
CUSTOMER PROFILE
AEP’S SERVICE TERRITORY ENCOMPASSES APPROXIMATELY
5.4 MILLION CUSTOMERS IN 11 STATES
Percentage of AEP System Retail Revenues Percentage Composition by Customer Class *
2%
13%
5%
4%
2%
26%
8%
1%
14%
13%
12% Arkansas
Indiana
Kentucky
Louisiana
Michigan
Ohio
Oklahoma
Tennessee
Texas
Virginia
West Virginia
48%
28%
19%
5%
Residential
Commercial
Industrial
Wholesale
9 52nd EEI Financial Conference | aep.com
GENERATION FLEET Competitive - 2017 Generation Capacity
by Fuel Type Based on 3,311 MW*
Regulated - 2017 Generation Capacity by Fuel Type
Based on 29,771 MW**
**Includes: • 953 MW of OVEC entitlement• 2,512 MW of renewable PPAs• 1,149 MW of gas PPAs• 355 MW for AEP Texas North’s
portion of Oklaunion• 2,021 MW of Demand Response /
Energy Efficiency Programs
*Includes 177 MW ofwind PPA. Excludes 355 MW of PPA for AEP Texas North’s portion of Oklaunion.
Total Fleet - 2017 Generation Capacity by Fuel Type
Based on 33,082 MW***
***Includes: • 953 MW of OVEC entitlement• 2,898 MW of renewable PPAs• 1,149 MW of gas PPAs• 355 MW for AEP Texas North’s
portion of Oklaunion• 2,021 MW of Demand Response /
Energy Efficiency Programs
Coal/Lignite - Controlled43.5%
Natural Gas 30.2%
Hydro, Wind, Solar, &Pumped Storage 11.9%
Nuclear 7.7%
DemandResponse/EnergyEfficiency 6.8%
Coal/Lignite -Controlled 47.2%
Natural Gas 27.2%
Hydro, Wind, Solar, &Pumped Storage 12.7%
Nuclear 6.9%
DemandResponse/EnergyEfficiency 6.1%
Coal/Lignite - Controlled80.3%
Hydro, Wind, Solar, &Pumped Storage 19.7%
10 52nd EEI Financial Conference | aep.com
TRANSMISSION LINE CIRCUIT MILES DETAIL
Operating Company Level (Circuit Miles)
Operating
Company 765kV 500kV 345kV 230kV 161kV 138kV 115kV 88kV 69kV 46kV 40kV 34.5kV 23kV Total
APCo 732 95 381 107 0 2,833 0 37 980 730 0 155 0 6,050
OPCo 507 0 1,354 0 0 3,214 0 0 2,260 0 53 417 61 7,866
I&M 616 0 1,618 0 0 1,671 0 0 681 0 0 577 0 5,163
KGPCo 0 0 0 0 0 44 0 0 0 0 0 29 0 73
KPCo 257 0 8 0 48 358 0 0 428 166 0 3 0 1,268
PSO 0 0 608 34 8 1,990 10 0 621 0 0 0 0 3,271
SWEPCo 0 0 736 0 305 1,459 29 0 1,572 0 0 0 0 4,101
AEP Texas 0 0 855 0 0 3,891 0 0 3,654 0 0 0 0 8,400
WPCo 0 16 16 0 0 194 0 0 86 0 0 0 0 312
Transco - IM 15 0 23 0 0 14 0 0 61 0 0 17 0 130
Transco - Ohio 1 0 118 0 0 187 0 0 196 0 3 6 21 532
Transco - OK 0 0 1 0 0 102 0 0 0 4 0 0 0 107
Transco - WV 0 0 0 0 0 229 0 0 155 0 0 0 0 384
Total 2,128 111 5,718 141 361 16,186 39 37 10,694 900 56 1,204 82 37,657
State Level (Circuit Miles)
State 765kV 500kV 345kV 230kV 161kV 138kV 115kV 88kV 69kV 46kV 40kV 34.5kV 23kV Total
Arkansas 0 0 78 0 305 249 13 0 445 0 0 0 0 1,090
Indiana 615 0 1,408 0 0 1,450 0 0 443 0 0 478 0 4,394
Kentucky 257 0 8 0 48 358 0 0 428 166 0 3 0 1,268
Louisiana 0 0 105 0 0 285 1 0 328 0 0 0 0 719
Michigan 16 0 234 0 0 235 0 0 298 0 0 115 0 898
Ohio 509 0 1,472 0 0 3,359 0 0 2,454 0 56 424 82 8,356
Oklahoma 0 0 650 34 8 2,244 10 0 776 0 0 0 0 3,722
Tennessee 0 0 0 92 0 154 0 0 2 0 0 29 0 277
Texas 0 0 1,365 0 0 4,791 15 0 4,455 0 0 0 0 10,626
W. Virginia 382 16 329 0 0 1,448 0 37 437 686 0 57 0 3,392
Virginia 349 95 69 15 0 1,613 0 0 628 48 0 98 0 2,915
Total 2,128 111 5,718 141 361 16,186 39 37 10,694 900 56 1,204 82 37,657
Note: Transmission line circuit miles are current as of 12/31/16; excludes ETT, OVEC and Joint Ventures
11 52nd EEI Financial Conference | aep.com
DISTRIBUTION LINE DETAIL
Note: Year End 2016 data per Small World Graphics.
By
Operating
By State Line Miles* Company Line Miles*
Arkansas 3,991 | AEP Texas 43,182
Indiana 15,070 | APCo 51,438
Kentucky 10,042 | I&M 20,425
Louisiana 12,589 | KGPCo 1,572
Michigan 5,355 | KPCo 10,042
Ohio 45,726 | OPCo 45,727
Oklahoma 19,886 | PSO 19,886
Tennessee 1,572 | SWEPCo 25,096
Texas 51,698 | WPCo 1,537
Virginia 31,128 |
W. Virginia 21,848 |
Total 218,905 Total 218,905
* Includes approximately 34,000 miles of underground circuit miles
12 52nd EEI Financial Conference | aep.com
RATE BASES & ROEs
1 Rate base represents Net Utility Plant
plus Regulatory Assets less Net
Accumulated Deferred Income Taxes and
less Regulatory Liabilities from 2016 FERC
Form 1.
2 Operating ROE adjusts GAAP results by
eliminating any material nonrecurring items
and is not weather normalized. 12-month
rolling ROE.
3
Represents the midpoint of the ROE
range approved in the formula rate case
settled in February 2014.
4 ROE is 11.1% adjusted for SEET items.
* 10.4% Allowed top of band, 70 BPS
above authorized 9.7%, as approved in
2014. Base rates subsequently frozen in
VA by the Feb. 2015 Rate Freeze Law. A
9.4% ROE was approved in October 2016
to be applied to Rate Adjustment Clauses
(RACS) only.
** Per ESP III Order .
Chart excludes AEG's Rockport plant
investment. AEG sells capacity & energy
to I&M and KPCo under a PPA.
Vertically Integrated Utilities
Jurisdiction
Pro Forma Rate
Base1
($ millions)
Operating2 Earned ROE
as of 9/30/2017
Approved
ROE
Approved
Debt/Equity
Effective Date of last approved
rate case
APCo-Virginia 10.40%* 57/43 2/2/15
APCo-West Virginia/WPCo 9.75% 53/47 5/27/15
APCo - FERC 11.06% 54/46 6/1/16
APCo/WPCo Total $8,220 8.4%
Kingsport Power - Tennessee 9.85% 58/42 8/9/16
KgPCo- TN Total $106 8.5%
KPCo -Distribution/Generation 10.25% 56/44 7/1/15
KPCo-Kentucky Total $1,663 4.5%
I&M-Indiana 10.20% 48/52 2/28/13
I&M-Michigan 10.20% 49/51 3/29/12
I&M - FERC 10.81% 44/56 6/1/16
I&M Total $4,713 8.4%
PSO- Distribution/Generation 9.50% 56/44 1/15/16
PSO-Oklahoma Total $2,840 6.1%
SWEPCO-Louisiana 10.00%3 48/52 8/1/15
SWEPCO-Arkansas 10.25% 54/46 11/24/09
SWEPCO-Texas 9.65% 51/49 1/29/13
SWEPCO - FERC 11.10% 50/50 1/1/16
SWEPCO Total $4,902 5.9%
Transmission and Distribution Companies
Jurisdiction
Proforma Rate
Base1
($ millions)
Operating2 Earned ROE
as of 9/30/2017
Approved
ROE
Approved
Debt/Equity
Effective Date of last approved
rate case
AEP Ohio - Distribution** 10.20% 52/48 2/25/15
AEP Ohio - Transmission 11.49% 50/50 7/1/16
AEP Ohio Total $4,569 12.6%4
AEP Texas Central $2,881 9.96% 60/40 5/29/07
AEP Texas North $1,168 9.96% 60/40 3/4/08
AEP Texas Total $4,049 10.3%
Transcos
Company
Proforma Rate
Base1
($ millions)
Operating2 Earned ROE
as of 9/30/2017
Approved
ROE
Approved
Debt/Equity
Effective Date of last approved
formula rate filing
AEP Ohio Transco $1,827 14.0% 11.49% 50/50 7/1/16
AEP Kentucky Transco $63 10.8% 11.49% 50/50 7/1/16
AEP Indiana Michigan Transco $1,048 12.4% 11.49% 50/50 7/1/16
AEP West Virginia Transco $571 10.7% 11.49% 50/50 7/1/16
AEP Oklahoma Transco $635 10.0% 11.20% 50/50 7/1/16
13 52nd EEI Financial Conference | aep.com
SUMMARY OF RATE CASE FILING REQUIREMENTS FERC
AR IN KY LA MI OH OK TN TX VA WV FERC Transmission
GENERAL
Time Limitations Between Cases No Yes No No No No No No No Yes No N/A N/A
Rates Effective Subject to Refund Yes Yes Yes Yes Yes Yes Yes Yes Yes No No Yes Yes
Fuel Clause Renewal Frequency Annually Semi-Annually Monthly Monthly Annually N/A Annually Annually
Tri-
Annually Annually Annually N/A N/A
Approx # of months after filing to
implement rates 10
10 @ 50% if
no order 6 4 10 9 6 9 6
10
Note 8 10 2 or 7 Varies
Approx # of months after filing order
expected 10 10 6 4 10 9 6 9 6 8 10 2 or 7 N/A
Notice of Intent
Prior PSC Notice Required? Yes Yes Yes No Optional Yes Yes No Yes Yes Yes No No
Notice Period (days) 60 Varies 28 N/A 45 30 45 N/A 30 60 30 No No
CASE COMPONENTS
Base Case Test Year
Partially
Projected
Hist.(Forecast
Opt/ Hybrid)
Forecast
Optional
Hist.
(Formula
Rate)
Forecast
Optional
Partially/Fully
Projected Hist. Hist. Hist. Hist. Hist. Forecast
Historical/
Forecast Filed
Post Test/Year Adjustment Period
(Months) 12 12 12 -- -- --
Min 6,
no max 18 -- 3 12 -- Varies
Cash Return on CWIP Partial
Limited
Note 2
Optional
Note 3
Partial
Note 1 Yes
Limited
Note 4
No
Note 1 Yes
Limited
Note 5 Yes Note 7
Limited
Note 6 Varies
Note 1: CWIP that is projected to be placed into service within six months post test year is included in rate base (for LA, under separate docket only). No CWIP in annual formula rates.
Note 2: CWIP is not included in rate base for a general rate case. However, for Clean Coal Technology using Indiana Coal or Qualified Pollution Control Property, Cook Life Cycle Management
Projects and Federally Mandated Projects the Commission may add CWIP to utility property for ratemaking purposes between rate cases via a surcharge. In addition, legislation
(SB 251) was passed that will allow CWIP recovery through a tracker for Cook Life Cycle Management projects.
Note 3: KPCo uses capitalization instead of rate base which includes CWIP, however, there is also a partial AFUDC offset which partially negates the cash return effect of CWIP
in capitalization or rate base.
Note 4: Ohio (ESP) cases are cost-based. Distribution cases are cost-of-service based.
Note 5: Can request inclusion in rate base but requires a showing that it is needed to maintain financial integrity. The financial integrity standard in Texas is not clearly defined and has been
essentially impossible to meet.
Note 6: The general FERC rule has been to allow CWIP in rate base.
Note 7: Allows environmental CWIP in Rate Base.
Note 8: The SCC is required to issue a biennial order within 8 months of filing. Rates are to be implemented 60 days after order and are NOT subject to refund. Depending on the nature of the
RAC, the SCC has a statutory limit to issue decisions within 3 months for a transmission cost recovery RAC, 8 months for a environmental compliance, RPS-RAC or DR/EE-RAC,
and 9 months for cost recovery related to a new generating facility.
14 52nd EEI Financial Conference | aep.com
RETAIL RECOVERY MECHANISMS BY JURISDICTION Company State
SO2/Nox/CO2
Allowances & GHG
Offsets
Distribution
Vegetation
Management
Environmental
Investment Energy Efficiency
Renewables
Investment REPA
Other Purchased
Power
(Energy/Capacity)
OATT
I&M Indiana ECCR BR CCTR/FMR/BR
DSM/EE Program
Cost Rider SPR/BR FAC/BR FAC/BR BR/PJM Tracker
Michigan PSCR BR BR EO Rider BR PSCR/RES PSCR/PSCR PSCR
KPCo Kentucky Surcharge BR Surcharge DSM Adj. Clause BR N/A FAC/Tariff PPA BR
AEP Ohio Ohio N/A ESRR N/A EE/PDR
Rider N/A AER N/A BTCR
KGPCo Tennessee FERC Tariff BR/TRP&MS FERC Tariff N/A N/A N/A FERC Tariff FPPAR
APCo Virginia BR BR ERAC/BR EERAC GRAC/BR RPSRAC/FF FAC/BR & FF TRAC
West Virginia ENEC VMP
Surcharge ENEC/BR
EE/DR Recovery
Rider BR ENEC ENEC/ENEC ENEC
Arkansas ECR BR Surcharge/BR EECR BR ECR ECR/BR BR
SWEPCo Louisiana EAC Formula BR/FAC Formula BR EECR/Formula BR Formula BR FAC FAC/Formula BR Formula BR
Texas (SPP) BR BR BR EECRF BR FAC FAC/BR TCRF
AEP TX Texas (ERCOT) N/A BR N/A EECRF /BR N/A N/A N/A TCOS
PSO Oklahoma BR BR BR DSM Cost
Recovery Rider BR FAC FAC BR/SPP Tracker
AER - Alternative Energy Rider EERAC – EE Rate Adjustment Clause PJM – PA-NJ-MD Regional Transmission Org
BR - Base Rates ENEC - Expanded Net Energy Cost PPA – Purchase Power Agreement
BTCR – Basic Transmission Cost Rider EO – Energy Optimization PSCR- Power Supply Cost Recovery Rider
CCTR - Clean Coal Technology Rider ERAC - Environmental Rate Adjustment Clause RPSRAC – Renewable Portfolio Standard RAC
CO2 – Carbon Dioxide ESRR - Enhanced Service Reliability Rider RES – Renewable Energy Surcharge
DSM - Demand Side Management FAC - Fuel Adjustment Clause SPP – Southwest Power Pool Regional Transmission Org
EAC - Environmental Adjustment Clause FERC – Federal Energy Regulatory Commission SPR – Solar Power Rider
ECR - Energy Cost Recovery Rider FF – Fuel Factor TCOS - Transmission Cost of Service
ECCR – Environmental Compliance Cost Rider FMR – Federal Mandate Rider TCRF - Transmission Cost Recovery Factor
EE - Energy Efficiency FPPAR – Fuel Purchase Power Adj Rider TRAC – Transmission Rate Adjustment Clause
EE/DR – Energy Efficiency/Demand Response GHG- Green House Gas TRP&MS- Targeted Reliability Plan and Major Storms
EE/PDR - EE Peak Demand Response Rider GRAC – Generation Rate Adjustment Clause VMP – Vegetation Management Plan
EECR - EE Cost Rate Rider NOx- Nitrogen Oxide
EECRF - Energy Efficiency Cost Recovery Factor Rider OATT – Open Access Transmission Tariff
15 52nd EEI Financial Conference | aep.com
STORM O&M RECOVERY MECHANISMS BY JURISDICTION
State
Ability to
Defer
Description
Latest
Approved
Recovery
Period
(in years)
Arkansas Yes Storm costs are normally expensed as incurred. However, if a storm is ruled to be significant, Commission has
granted authority to request recovery in base rates or a separate proceeding.
3
Indiana Yes Recovery of storm costs is requested in base rate cases. 2011 base case established a $4M annual major
storm reserve based on 5-year historical average of major storm expenses and includes over-/under-recovery.
N/A
Kentucky Yes Recovery of storm costs is requested in base rate cases. Commission approval for deferral is required. 5
Louisiana No Storm costs are expensed as incurred and included for recovery in years of formula rate filings. N/A
Michigan No Recovery of storm costs is requested in base rate cases which use forecasted test years. N/A
Ohio Yes 2011 Distribution Base Case and 2014 Electric Security Plan orders established a $5M annual major storm
reserve and annual true-up mechanism. Recovery of significant storms are requested in separate
proceedings.
1
Oklahoma Yes Recovery of storm costs is requested in base rate cases with over-/under-recovery above/below $2.9M
annually. Recovery of significant storm costs is separately requested.
4
Tennessee Yes Recovery of storm costs is requested in base rate cases. Effective October 2017, a reliability/storm rider
provides for over-/under-recovery of incremental storm-related costs compared to what is recovered in base
rates.
1
Texas (SWEPCo) Yes Storm costs are normally expensed as incurred. However, storm costs may be deferred for recovery if the
costs are included in the test period of a base case filing.
3
Texas (North) No Storm costs are normally expensed as incurred and are included in base rates during the test year. N/A
Texas (Central) Yes Approved catastrophe reserve ($1.3M annually) in base rates allows deferral of all storm costs above $500K
with recovery in base rates or potential securitization.
N/A
Virginia No Based on legislation enacted in 2015, APCo will expense incremental storm costs through 2017 associated
with severe weather events and/or natural disasters. Absent specific APCo request and commission approval,
any incremental storms will continued to be expensed beyond 2017.
N/A
West Virginia Yes Recovery of storm costs is requested in base rate cases. 5
16 52nd EEI Financial Conference | aep.com
JURISDICTIONAL OFF-SYSTEM SALES SHARING SUMMARY
State OSS Sharing? Detail
Arkansas Yes, above base levels
Up to $1,200,000 annual margin, customers receive
100%. Above $1,200,000, customers receive 90%.
Indiana Yes, above and below base levels
Sharing occurs above and below levels included in base
rates of $26.9M. Customers receive 50%.
Kentucky Yes, above and below base levels Sharing occurs above and below levels included in base
rates of $15.1M. Customers receive 75%.
Louisiana Yes, above base levels Up to $874,000 annual margin, customers receive 100%.
From $874,001 to $1,314,000, customers receive 85%.
Above $1,314,000, customers receive 50%.
Michigan Yes 80% of profits are shared with customers
Ohio No N/A
Oklahoma Yes 90% of profits are shared with customers *
Tennessee No N/A
Texas (SWEPCo) Yes 90% of profits are shared with customers
Virginia Yes 75% of profits are shared with customers
West Virginia Yes With the exception of WPCo’s Mitchell Plant, 100% of
profits are passed back to customers through the
Expanded Net Energy Cost (ENEC) clause. Generally,
82.5% of Mitchell Plant profits are shared with customers.
* Percentage changed to 90% in January 2017
17 52nd EEI Financial Conference | aep.com
COMMISSION OVERVIEW
Commissioners
Number: 3* Appointed/Elected: Appointed Term: 5 Years Political Makeup: R: 2 D: 1
Qualifications for Commissioners
The Federal Energy Regulatory Commission (FERC) is composed of up to five commissioners who are appointed by the President of the
United States with the advice and consent of the Senate. Commissioners serve five-year terms and have an equal vote on regulatory matters.
To avoid any undue political influence or pressure, no more than three commissioners may belong to the same political party.
Commissioners
Neil Chatterjee, Chairman (Rep.) since 2017: term expires June 2021. Commissioner Chatterjee assumed chairmanship in August 2017.
Prior to joining the Commission, he was energy policy advisor to U.S. Senate Majority Leader Mitch McConnell (R-KY), Over the years, he
has played an integral role in the passage of major energy, highway and agriculture legislation. Prior to serving Leader McConnell, he worked
as a principal in government relations for the National Rural Electric Cooperative Association and as an aide to House Republican Conference
Chairwoman Deborah Pryce (R-OH). He began his career in Washington, D.C., with the House Committee of Ways and Means.
Robert F. Powelson, Commissioner (Rep.) since 2017: term expires June 2020. Most recently served as Commissioner for the
Pennsylvania Public Utility Commission, where he served since June 2008, and lead as Chairman from February 2011-May 2015. Under
Commissioner Powelson’s leadership, Pennsylvania ratepayers had an active voice on issues such as nuclear power production, renewable
investment, broadband deployment, infrastructure development and cyber security. Commissioner Powelson is past president of the National
Association of Regulatory Utility Commissioners (NARUC) and participated in NARUC activities on climate policy, critical infrastructure and
nuclear waste disposal.
Cheryl A. LaFleur, Commissioner (Dem.) since 2010: second term expires June 2019. She served as Acting Chairman from November
2013 to July 2014 and from January 2017 to August 2017 and as Chairman from July 2014 until April 2015. Prior to joining the Commission
in 2010, Commissioner LaFleur had more than 20 years’ experience as a leader in the electric and natural gas industry. She served as
executive vice president and acting CEO of National Grid USA, responsible for the delivery of electricity to 3.4 million customers in the
Northeast. Her previous positions at National Grid USA and its predecessor New England Electric System included chief operating officer,
president of the New England distribution companies and general counsel.
* As of October 16, 2017, two nominees awaited a final confirmation vote by the U.S. Senate: Richard Glick (Dem.) for a term expiring June 2022 and
Kevin McIntyre (Rep.) for a term expiring June 2018 and automatic reappointment for a term expiring June 2023. If confirmed, President Trump
intends to name Mr. McIntyre as Chairman.
Federal Energy Regulatory Commission
18 52nd EEI Financial Conference | aep.com
TRANSFORMING OUR GENERATION FLEET
• Transforming Our Generation Fleet
• Investments Driving Emission Reductions
• Dramatic Reductions in Emissions
• Large-scale Renewable Opportunities
• Delivering Clean Energy Resources
• Renewable Resources
• Renewable Portfolio/Energy Efficiency
Standards
• Regulated & Competitive Retirements
• Regulated Environmental Controls
• Competitive Environmental Controls
• Additional Environmental Regulations
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TRANSFORMING OUR GENERATION FLEET
AEP'S GENERATING RESOURCE PORTFOLIO PAST AND FUTURE
Excludes impact of Wind Catcher.
Future includes IRP forecasted additions and retirements through 2030.
Energy Efficiency / Demand Response represents avoided capacity rather than physical assets.
66%
22%
7% 4%
1%
70%
19%
6% 4% 1%
47%
27%
7%
13%
6%
33%
24%
6%
30%
7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
1999 2005 2017 Future
1999 2005 2017 Future
1999 2005 2017 Future
2%
26% 6%
Nuclear
1%
Natural Gas Coal Hydro, Wind, Solar
& Pumped
Energy Efficiency /
Demand Response
33%
1999 2005 2017 Future
1999 2005 2017 Future
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INVESTMENTS DRIVING EMISSION REDUCTIONS
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DRAMATIC REDUCTIONS IN EMISSIONS
SO2
90%
94%
1990-2016
ACTUAL
NOx
Hg 93%
2001-2016
ACTUAL
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DRAMATIC REDUCTIONS IN EMISSIONS
CO2
2000-2016
actual
44%
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INVESTING IN A GREENER FUTURE
Source: Current Internal Integrated Resource Plans. Excludes impact of Wind Catcher. Reflects PSO’s Integrated Resource Plan filed 11/1/17.
Actual additions depend on market conditions, regulatory approval, customer demand and other external factors.
Wind and solar represents nameplate MW capacity.
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AEP's 2017 Renewable Portfolio, in MW
Hydro, Wind, Solar & Pumped Storage Owned MW PPA MW Total MW
AEP Ohio 209 209
Appalachian Power Company 788 455 1,243
Indiana Michigan Power Company 38 450 488
Public Service of Oklahoma 1,137 1,137
Southwestern Electric Power Company 469 469
Competitive Wind, Solar & Hydro 475 177 652
Total 1,301 2,897 4,198
DELIVERING CLEAN ENERGY RESOURCES
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RENEWABLE RESOURCES Owned Renewables PPA Renewables Total
Company & Plant Name State Hydro Wind Solar Total
Owned Hydro Wind Solar
Total
PPA
Appalachian Power Company
Buck VA 9 9 9
Byllesby VA 22 22 22
Claytor VA 76 76 76
Leesville VA 50 50 50
London WV 14 14 14
Marmet WV 14 14 14
Niagara VA 2 2 2
Winfield WV 15 15 15
Smith Mtn Pumped VA 586 586 586
Camp Grove WV 75 75 75
Beech Ridge VA 101 101 101
Fowler Ridge III OH 99 99 99
Grand Ridge II & III WV 100 100 100
Gauley River / Summersville WV 80 80 80
Total 788 788 80 375 455 1,243
Indiana Michigan Power Company
Berrien Springs MI 7 7 7
Buchanan MI 4 4 4
Constantine MI 1 1 1
Elkhart IN 3 3 3
Mottville MI 2 2 2
Twin Branch IN 5 5 5
Watervliet MI 5 5 5
Olive IN 5 5 5
Deer Creek IN 3 3 3
Twin Branch IN 3 3 3
Fowler Ridge I IN 100 100 100
Fowler Ridge II IN 50 50 50
Wildcat IN 100 100 100
Headwaters IN 200 200 200
Total 22 16 38 450 450 488
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Owned Renewables PPA Renewables Total
Company & Plant Name State Hydro Wind Solar Total
Owned Hydro Wind Solar
Total
PPA
Ohio Power Company
Fowler Ridge II OH 100 100 100
Wyandot Solar OH 10 10 10
Timber Road OH 99 99 99
Total 199 10 209 209
Public Service Company of Oklahoma
Weatherford OK 147 147 147
Sleeping Bear OK 94 94 94
Blue Canyon V OK 99 99 99
Minco OK 99 99 99
Elk City OK 99 99 99
Balko OK 200 200 200
Seling OK 199 199 199
Goodwell OK 200 200 200
Total 1,137 1,137 1,137
Southwestern Electric Power Company
Majestic TX 79 79 79
Majestic II TX 80 80 80
Flat Ridge II KS 109 109 109
Canadian Hills OK 201 201 201
Total 469 469 469
Total Regulated Renewables 810 16 826 80 2,630 10 2,720 3,546
Competitive Trent Mesa TX 150 150 150
Desert Sky TX 161 161 161
Southwest Mesa TX 177 177 177
Racine OH 48 48 48
AEP Renewables 90 90 90
AEP Onsite Partners 26 26 26
Total Competitive Renewables 48 311 116 475 177 177 652
Total AEP Renewable Resources 858 311 132 1,301 80 2,807 10 2,897 4,198
RENEWABLE RESOURCES
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RENEWABLE PORTFOLIO/ENERGY EFFICIENCY STANDARDS
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REGULATED & COMPETITIVE RETIREMENTS SINCE 2011
Operating Company Plant MW Retirement Date
APCo Glen Lyn 5 95 2015
Glen Lyn 6 240 2015
Clinch River 3 235 2015
Sporn 1 150 2015
Sporn 3 150 2015
Kanawha River 1 200 2015
Kanawha River 2 200 2015
Total MW 1,270
I&M Tanners Creek 1-4 995 2015
Total MW 995
KPCo Big Sandy 2 800 2015
Total MW 800
SWEPCo Welsh 2 528 2016
Total MW 528
PSO Northeastern 4 470 2016
Total MW 470
Total Regulated Retirements 4,063
Operating Company Plant MW Retirement Date
AEP Generation Resources Beckjord 53 2014
Conesville 3 165 2012
Muskingum River 1-5 1,440 2015
Picway 5 100 2015
Sporn 2,4 300 2015
Sporn 5 450 2011
Kammer 1-3 630 2015
Total Competitive Retirements 3,138
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REGULATED ENVIRONMENTAL CONTROLS
Plant Name
MW
Capacity
SCR
Projected
In-Service FGD
Projected
In-Service ACI
Projected
In-Service DSI
Projected
In-Service Baghouse
Projected
In-Service
Gas
Conversion
Projected
In-Service
APCo
Amos 1
800
Amos 2
800
Amos 3
1,330
Clinch River 1
230
Clinch River 2
235
Mountaineer
1,320
WPCo
Mitchell 1&2*
780
KPCo
Big Sandy 1
280
Mitchell 1&2*
780
I&M/AEG (50/50 share)
Rockport 1
1,310
2017 x 2025
Rockport 2
1,310 x 2020 x 2028
In Service Projected * Operated by Kentucky Power
ACI – Activated Carbon Injection DSI – Dry Sorbent Injection FGD – Flue Gas Desulfurization SCR – Selective Catalytic Reduction Baghouse
(Mercury Control) (SO3 Control) (SO2 Control) (NOx Control) (Particulate Matter)
30 52nd EEI Financial Conference | aep.com
Plant Name
MW
Capacity SCR
Projected
In-Service FGD
Projected
In-Service ACI
Projected
In-Service DSI
Projected
In-Service Baghouse
Projected
In-Service
Gas
Conversion
Projected
In-Service
PSO
Oklaunion 105
Northeastern 3 469
SWEPCo
Dolet Hills 256
Flint Creek 1 264
Pirkey 580
Turk 477
Welsh 1 525 x 2024
Welsh 3 528 x 2024
In Service Projected
ACI – Activated Carbon Injection DSI – Dry Sorbent Injection FGD – Flue Gas Desulfurization SCR – Selective Catalytic Reduction Baghouse
(Mercury Control) (SO3 Control) (SO2 Control) (NOx Control) (Particulate Matter)
REGULATED ENVIRONMENTAL CONTROLS
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COMPETITIVE ENVIRONMENTAL CONTROLS
Plant Name MW Capacity SCR FGD ACI
Gore Mercury
Control
AEP Generation Resources
Cardinal 1 595
Conesville 4 651
Conesville 5 405
Conesville 6 405
Stuart 1-4 603
AEP Texas
Oklaunion* 355
In Service Projected * Owned by AEP Texas North, PPA with Competitive
ACI – Activated Carbon Injection FGD – Flue Gas Desulfurization SCR – Selective Catalytic Reduction
(Mercury Control) (SO2 Control) (NOx Control)
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ADDITIONAL ENVIRONMENTAL REGULATIONS Revised Effluent Limitation Guidelines (“ELG”) – Final rule went into effect January 2016, but the Federal EPA has
reopened parts of the rule
• Establishes more stringent standards for wastewater discharge from steam electric generating units
• Considers water treatment systems for wastewater from FGD control systems and ash handling and storage
processes
• Initial compliance deadline was delayed two years until Nov 1, 2020
Note: The Federal EPA will be reconsidering the requirements for bottom ash transport and FGD wastewater
Coal Combustion Residuals Rule (“CCR”) – Final rule went into effect October 2015
• Applies to the handling and storage of coal combustion and emission control system by-products (ash ponds
and landfills)
• Requires the collection of groundwater monitoring data, which is on schedule
Note: The Federal EPA indicated it will reconsider parts of this rule, although the schedule for doing so is uncertain
ELG and CCR Implementation Strategy
• The implementation strategy is being reviewed given the Federal EPA’s decision to reconsider both rules
• Compliance solutions based on the initial rules have been included in capital cost estimates
• Efforts are underway to optimize the costs of technology options
Revised Clean Water Act 316(b) Standards – Final rule went into effect October 2014
• Applies to the cooling water intake systems
• Does not mandate cooling towers, but does require studies of site-specific constraints
• With the rule finalized, plans are being refined and expected to be generally consistent with prior estimates
10/31/2017 33 33 52nd EEI Financial Conference | aep.com
FINANCIAL UPDATE
• Capitalization & Liquidity
• Pension & OPEB Estimates
• AEP Banking Group
• AEP Credit Ratings
• Long-Term Debt Maturity Profile
• Debt Schedules
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CAPITALIZATION & LIQUIDITY
Liquidity Summary
Credit Statistics Total Debt / Total Capitalization
Qualified Pension Funding
Actual Target
FFO to Total Debt 17.4% 15%-20%
Represents the trailing 12 months as of 9/30/2017
(unaudited) 9/30/2017 Actual
($ in millions) Amount Maturity
Revolving Credit Facility $3,000 Jun-21
Plus
Cash & Cash Equivalents 344
Less
Commercial Paper Outstanding (295)
Letters of Credit Issued -
Net Available Liquidity $3,049
Strong balance sheet, credit metrics and liquidity
55.2% 54.3% 54.3% 53.2% 55.9% 54.0% 54.5% 54.6%
Short/Long Term Debt Securitization Debt
92% 99% 97% 97% 96% 98% 99% 100%
2012 2013 2014 2015 2016 Q1-17 Q2-17 Q3-17
2012 2013 2014 2015 2016 Q1-17 Q2-17 Q3-17
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PENSION & OPEB ESTIMATES
Qualified Pension Funding
92% 99% 97% 97% 96% 100%
2012 2014 2013 2015 3Q2017 2016
• YTD pension returns up 9.9% due to
strong investment performance,
including 20% returns in the global
equity portfolio. OPEB returns are
up 14.5%, also due to strong global
equity gains. OPEB obligations
remain fully funded at 112%.
• 2018 is subject to potential changes
in investment results, interest rates
and actuarial assumptions.
• Pension expense for regulated
subsidiaries is recovered through
base rates.
Assumptions 2017E 2018E
Pension Discount Rate 4.05% 4.44%
OPEB Discount Rate 4.10% 4.49%
Assumed Long Term Rate of
Return on Pension Assets 6.00% 6.25%
Assumed Long Term Rate
of Return on OPEB Assets 6.75% 6.00%
Pension/OPEB Funding * $98M $97M
Pension/OPEB O&M (Pre-tax) * $20M $9M
* Excludes non-qualified retirement plan
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AEP BANKING GROUP
Lender Composition
Lender mix gives AEP
geopolitical diversification
$3.0B Core Credit Facilities
%Share
Bank of America Major US Bank 6.5%
Bank of Tokyo-Mitsubishi Japanese Bank 6.5%
Barclays Bank British Bank 6.5%
Citibank Major US Bank 6.5%
JP Morgan Major US Bank 6.5%
Mizuho Japanese Bank 6.5%
The Bank of Nova Scotia Canadian Bank 6.5%
Wells Fargo Major US Bank 6.5%
Bank of New York US Regional Bank 4.0%
BNP Paribas European Bank 4.0%
Credit Agricole European Bank 4.0%
Credit Suisse Investment Bank 4.0%
Goldman Sachs Investment Bank 4.0%
Key Bank US Regional Bank 4.0%
Morgan Stanley Investment Bank 4.0%
PNC Financial US Regional Bank 4.0%
Royal Bank of Canada Canadian Bank 4.0%
SunTrust Bank US Regional Bank 4.0%
UBS Investment Bank 4.0%
Fifth-Third Bank US Regional Bank 2.6%
Huntington National Bank
US Regional Bank
1.4%
Total 100.0%
20%
26%
16%
13%
8%
6%
11%
US Regional Bank Major US Bank
Investment Bank Japanese Bank
European Bank British Bank
Canadian BankNo
Change
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AEP CREDIT RATINGS
Moody's S&P
Company
Senior Senior
Unsecured Outlook Unsecured Outlook
American Electric Power Company Inc. Baa1 P BBB+ S
AEP, Inc. Short Term Rating P2 S A2 S
AEP Texas Inc. Baa1 S A- S
AEP Transmission Company, LLC (1) A2 S A- S
Appalachian Power Company (2) Baa1 S A- S
Indiana Michigan Power Company (2) Baa1 P A- S
Kentucky Power Company Baa2 S A- S
Ohio Power Company A2 S A- S
Public Service Company of Oklahoma A3 S A- S
Southwestern Electric Power Company Baa2 S A- S
Transource Energy (3) A2 S NR NR
(1) AEP Transmission Co. received a solicited senior unsecured debt rating of A- from Fitch. The rating outlook
is Stable.
(2) In conjunction with the unenhanced VRDN remarketings, APCo and I&M both received short term credit
ratings of A-2/P2 from S&P and Moody’s, respectively.
(3) NR = Not Rated
Ratings current as of October 27, 2017
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LONG-TERM DEBT MATURITY PROFILE
Year 2017 2018 2019 2020 2021 2022
AEP, Inc. $550.0 $0.0 $0.0 $0.0 $0.0 $300.0
AEP Generating Company $45.0 $125.0 $0.0 $0.0 $0.0 $0.0
AEP Texas* $40.9 $30.0 $250.0 $110.6 $0.0 $425.0
AEP Transmission Company $0.0 $50.0 $85.0 $0.0 $50.0 $104.0
Appalachian Power* $0.0 $100.0 $281.0 $65.4 $367.5 $0.0
Indiana Michigan Power $0.9 $300.0 $539.2 $49.9 $154.4 $0.0
Kentucky Power $0.0 $75.0 $0.0 $65.0 $40.0 $0.0
Ohio Power* $0.0 $350.0 $0.0 $0.0 $500.0 $0.0
Public Service of Oklahoma $0.0 $0.0 $375.0 $12.7 $250.0 $0.0
Southwestern Electric Power $0.0 $381.7 $453.5 $115.0 $0.0 $275.0
Wheeling Power Company $0.0 $65.0 $0.0 $0.0 $0.0 $113.0
Total $637 $1,477 $1,984 $419 $1,362 $1,217
* Excludes securitization bonds
Includes mandatory tenders (put bonds)
Data as of September 30, 2017
($ in millions)
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DEBT SCHEDULES
Note: Debt schedules current as of 9/30/17.
* PPN – Private Placement Number
American Electric Power, Inc Interest Maturity CUSIP / PPN* Amount
Senior Notes, Series E 1.650% 12/15/2017 025537AF8 $550,000,000
Senior Notes, Series F 2.950% 12/15/2022 025537AG6 $300,000,000
Total $850,000,000
AEP Generating Company Interest Maturity CUSIP / PPN* Amount
City of Rockport, Series 1995 A Floating 07/01/2025 773835BG7 $22,500,000 1
City of Rockport, Series 1995 B Floating 07/01/2025 773835BH5 $22,500,000 1
Term Loan Floating 12/15/2018 00104NAD6 $125,000,000
Total $170,000,000
1 Liquidity Letter of Credit matures on 7/15/2019, but may be purchased on demand
AEP Generation Resources Interest Maturity CUSIP / PPN* Amount
State of Ohio, Air Quality Bonds 2009B 5.800% 12/01/2038 677525TM9 $32,245,000
Total $32,245,000
2
2 Debt on Ohio Power Company, but the obligation is AEP Generation Resources through an intercompany note
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DEBT SCHEDULES
Note: Debt schedules current as of 9/30/17.
* PPN – Private Placement Number
AEP Texas Interest Maturity CUSIP / PPN* Amount
Red River Authority of Texas PCRB (CPL, PSO, WTU) 4.450% 06/01/2020 756864BT0 $44,310,000
Senior Note, Series 2008A 5.890% 04/01/2018 0010EQA*7 $30,000,000
Senior Note, Series 2008B 6.760% 04/01/2038 0010EQA@5 $70,000,000
Senior Notes, Series C 3.090% 02/28/2023 0010EQA#3 $125,000,000
Senior Notes, Series D 4.480% 02/27/2043 0010EQB*6 $75,000,000
Bank Term Loan Floating 07/25/2019 N/A $75,000,000
Senior Note, Series E 3.270% 09/30/2022 0010EQB@4 $25,000,000
Senior Note, Series F 3.750% 09/30/2025 0010EQB#5 $50,000,000
Senior Note, Series G 4.710% 12/15/2035 0010EQ C*5 $50,000,000
Senior Note, Series A 2.400% 10/01/2022 00108WAA8 $400,000,000
Senior Note, Series B 3.800% 10/01/2047 00108WAB6 $300,000,000
Guadalupe-Blanco River Authority PCRB, Series 2008 5.625% 10/01/2017 400530AQ4 $40,890,000
Red River Authority of Texas PCRB (CPL, PSO, WTU) 4.450% 06/01/2020 756864BT0 $6,330,000
Matagorda PCB Series 2001A 6.300% 11/01/2029 576528DM2 $100,635,000
Matagorda Cnty Navigation Dist. #1 PCRB, Series 2008-1 4.000% 06/01/2030 576528DP5 $60,265,000
Matagorda Cnty Navigation Dist. #1 PCRB, Series 2008-2 4.000% 06/01/2030 576528DQ3 $60,000,000
Matagorda Cnty Navigation District #1, Series 1996 1.750% 05/01/2030 576528DS9 $60,000,000 1
Matagorda Cnty Navigation District #1, Series 2005A 4.400% 05/01/2030 576528CY7 $111,700,000
Matagorda Cnty Navigation District #1, Series 2005B 4.550% 05/01/2030 576528CZ4 $50,000,000
Bank Term Loan Floating 07/25/2019 N/A $125,000,000
1 Put date is 09/01/2020
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Note: Debt schedules current as of 9/30/17.
* PPN – Private Placement Number
AEP Texas (continued) Interest Maturity CUSIP / PPN* Amount
Senior Note, Series B 6.650% 02/15/2033 0010EPAF5 $275,000,000
Senior Note, Series A 2.610% 04/30/2019 0010EPA*9 $50,000,000
Senior Note, Series B 3.810% 04/30/2026 0010EPA@7 $50,000,000
Senior Note, Series C 4.670% 04/30/2044 0010EPA#5 $100,000,000
Senior Note, Series D 4.770% 10/30/2044 0010EPB*8 $100,000,000
Senior Note, Series G 3.850% 10/01/2025 0010EPAN8 $250,000,000
Total $2,684,130,000
Securitization Bonds, Class 2006A-4 5.170% 01/01/2018 00110AAD6 $69,962,039
Securitization Bonds, Class 2006A-5 5.306% 07/01/2020 00110AAE4 $494,700,000
Securitization Bonds, Class 2012 A-1 0.880% 12/01/2017 00104UAA6 $7,387,936
Securitization Bonds, Class 2012 A-2 1.976% 06/01/2020 00104UAB4 $180,200,000
Securitization Bonds, Class 2012 A-3 2.845% 12/01/2024 00104UAC2 $311,900,000
Total $1,064,149,975
DEBT SCHEDULES
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DEBT SCHEDULES
Note: Debt schedules current as of 9/30/17.
* PPN – Private Placement Number
AEP Transmission Company Interest Maturity CUSIP / PPN* Amount
Senior Notes, Series A, Tranche 1 3.300% 10/18/2022 00114*AA1 $104,000,000
Senior Notes, Series A, Tranche 2 4.000% 10/18/2032 00114*AB9 $85,000,000
Senior Notes, Series A, Tranche 3 4.730% 10/18/2042 00114*AC7 $61,000,000
Senior Notes, Series A, Tranche 4 4.780% 12/14/2042 00114*AD5 $75,000,000
Senior Notes, Series A, Tranche 5 4.830% 03/18/2043 00114*AE3 $25,000,000
Senior Notes, Series B, Tranche 1 2.730% 11/07/2018 00114*AF0 $50,000,000
Senior Notes, Series B, Tranche 2 4.050% 11/07/2023 00114*AG8 $60,000,000
Senior Notes, Series B, Tranche 3 4.380% 11/07/2028 00114*AL7 $60,000,000
Senior Notes, Series B, Tranche 4 5.320% 11/07/2043 00114*AH6 $100,000,000
Senior Notes, Series B, Tranche 5 5.420% 04/30/2044 00114*AJ2 $30,000,000
Senior Notes, Series B, Tranche 6 5.520% 10/30/2044 00114*AK9 $100,000,000
Senior Notes, Series C, Tranche A 2.680% 11/14/2019 00114*AM5 $85,000,000
Senior Notes, Series C, Tranche B 3.180% 11/14/2021 00114*AN3 $50,000,000
Senior Notes, Series C, Tranche C 3.560% 11/14/2024 00114*AP8 $95,000,000
Senior Notes, Series C, Tranche D 3.660% 03/16/2025 00114*AQ6 $50,000,000
Senior Notes, Series C, Tranche E 3.760% 06/16/2025 00114*AR4 $40,000,000
Senior Notes, Series C, Tranche F 3.810% 11/14/2029 00114*AS2 $55,000,000
Senior Notes, Series C, Tranche G 4.010% 06/15/2030 00114*AT0 $60,000,000
Senior Notes, Series C, Tranche H 4.050% 11/14/2034 00114*AU7 $25,000,000
Senior Notes, Series C, Tranche I 4.530% 11/14/2044 00114*AV5 $40,000,000
Senior Notes, Series F 3.100% 12/01/2026 00115A AE9 $300,000,000
Senior Notes, Series D 3.100% 12/01/2026 00115A AA7 $125,000,000
Senior Notes, Series G 4.000% 12/01/2046 00115A AC3 $400,000,000
Senior Notes, Series H 3.750% 12/01/2047 00115A AG4 $500,000,000
Total $2,575,000,000
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Note: Debt schedules current as of 9/30/17.
* PPN – Private Placement Number
Appalachian Power Company Interest Maturity CUSIP / PPN* Amount
Bank Term Loan Floating 06/30/2019 N/A $125,000,000
West Virginia Economic Dev. Authority, Series 2008C 3.250% 05/01/2019 95648NAD9 $30,000,000
Russell County, Series K 4.625% 11/01/2021 782470AR9 $17,500,000
West Virginia Economic Dev. Authority, Series 2008D 3.250% 05/01/2019 95648NAE7 $40,000,000
Mason County, Series L 1.625% 10/01/2022 575200BB5 $100,000,000 1
West Virginia Economic Dev. Authority, Series 2008B Floating 02/01/2036 95648VAL3 $50,275,000
West Virginia Economic Dev. Authority, Series 2008A Floating 02/01/2036 95648VAW9 $75,000,000
West Virginia Economic Dev. Authority, Series 2010A 5.375% 12/01/2038 95648VAS8 $50,000,000
West Virginia Economic Dev. Authority, Series 2011A 1.700% 01/01/2041 95648VAZ2 $65,350,000 2
West Virginia Economic Dev. Authority, Series 2015A (Amos) 1.900% 03/01/2043 95648VAV1 $86,000,000 3
1 Put date 10/01/2018
2 Put date 09/01/2020
3 Put date 4/01/2019
DEBT SCHEDULES
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Note: Debt schedules current as of 9/30/17.
* PPN – Private Placement Number
Appalachian Power Company (continued) Interest Maturity CUSIP / PPN* Amount
Senior Note, Series H 5.950% 05/15/2033 037735BZ9 $200,000,000
Senior Note, Series L 5.800% 10/01/2035 037735CE5 $250,000,000
Senior Note, Series N 6.375% 04/01/2036 037735CG0 $250,000,000
Senior Note, Series P 6.700% 08/15/2037 037735CK1 $250,000,000
Senior Note, Series Q 7.000% 04/01/2038 037735CM7 $500,000,000
Senior Note, Series T 4.600% 03/30/2021 037735CR6 $350,000,000
Senior Note, Series U 4.400% 05/15/2044 037735CT2 $300,000,000
Senior Note, Series V 3.400% 06/01/2025 037735CU9 $300,000,000
Senior Note, Series W 4.450% 06/01/2045 037735CV7 $350,000,000
Senior Note, Series X 3.300% 06/01/2027 037735CW5 $325,000,000
Total $3,714,125,000
Securitization Bonds, Tranche A-1 2.008% 02/01/2023 037680AA3 $134,176,142
Securitization Bonds, Tranche A-2 3.772% 08/01/2028 037680AB1 $164,500,000
Total $298,676,142
DEBT SCHEDULES
45 52nd EEI Financial Conference | aep.com
Note: Debt schedules current as of 9/30/17.
* PPN – Private Placement Number
Indiana Michigan Power Company Interest Maturity CUSIP / PPN* Amount
Law renceburg, Series I Floating 10/01/2019 520453AN1 $25,000,000
Rockport, Series D 2.050% 04/01/2025 773835BN2 $40,000,000 1
Rockport, Series 2002 A Floating 06/01/2025 773835AV5 $0
Law renceburg, Series H Floating 11/01/2021 520453AM3 $52,000,000
City of Rockport, Series 2009A 1.750% 06/01/2025 773835BL6 $50,000,000 2
City of Rockport, Series 2009B 1.750% 06/01/2025 773835BM4 $50,000,000 2
Bank Term Loan Floating 05/15/2018 45488QAA6 $200,000,000
DCC Fuel VI Floating Rate Floating 10/15/2017 N/A $902,666
DCC Fuel VII Floating Rate Floating 04/28/2019 N/A $15,055,514
DCC Fuel VIII Floating Rate Floating 10/27/2019 N/A $24,101,811
DCC Fuel IX Floating Rate Floating 10/29/2020 N/A $49,852,503
DCC Fuel X Floating Rate Floating 04/27/2021 N/A $62,363,605
Senior Note, Series H 6.050% 03/15/2037 454889AM8 $400,000,000
Senior Note, Series I 7.000% 03/15/2019 454889AN6 $475,000,000
Seinor Note, Series J 3.200% 03/15/2023 454889AP1 $250,000,000
Seinor Note, Series K 4.550% 03/15/2046 454889 AQ9 $400,000,000
Seinor Note, Series L 3.750% 07/01/2047 454889 AR7 $300,000,000
Total $2,394,276,099
1 Put date is 06/01/2021
2 Put date is 06/01/2018
DEBT SCHEDULES
46 52nd EEI Financial Conference | aep.com
Note: Debt schedules current as of 9/30/17.
* PPN – Private Placement Number
Kentucky Power Interest Maturity CUSIP / PPN* Amount
Bank Term Loan Floating 11/05/2018 N/A $75,000,000
Senior Note, Series A 7.250% 06/18/2021 491386C*7 $40,000,000
Senior Note, Series B 8.030% 06/18/2029 491386C@5 $30,000,000
Senior Note, Series C 8.130% 06/18/2039 491386C#3 $60,000,000
Senior Note, Series D 5.625% 12/01/2032 491386AL2 $75,000,000
Senior Note, Series A 4.180% 09/30/2026 491386D*6 $120,000,000
Senior Note, Series B 4.330% 12/30/2026 491386D@4 $80,000,000
Senior Note, Series F 3.130% 09/12/2024 491386D#2 $65,000,000
Senior Note, Series G 3.350% 09/12/2027 491386E*5 $40,000,000
Senior Note, Series H 3.450% 09/12/2029 491386E@3 $165,000,000
Senior Note, Series I 4.120% 09/12/2047 491386E#1 $55,000,000
WV Economic Dev. Authority, Series 2014A (Mitchell) 2.000% 04/01/2036 N/A $65,000,000
Total $870,000,000
DEBT SCHEDULES
47 52nd EEI Financial Conference | aep.com
Note: Debt schedules current as of 9/30/17.
* PPN – Private Placement Number
Ohio Power Company Interest Maturity CUSIP / PPN* Amount
Senior Note, Series B 6.600% 03/01/2033 199575AT8 $250,000,000
Senior Note, Series F 5.850% 10/01/2035 199575AV3 $250,000,000
Senior Note, Series G 6.050% 05/01/2018 199575AW1 $350,000,000
Senior Note, Series G Due 2/15/2033 6.600% 02/15/2033 677415CF6 $250,000,000
Senior Notes, Series M Due 10/1/2021 5.375% 10/01/2021 677415CP4 $500,000,000
Total $1,600,000,000
Securitization Bonds, Tranche A-2 2.049% 07/01/2019 67741YAB4 $94,878,311
Total $94,878,311
Public Service Company of Oklahoma Interest Maturity CUSIP / PPN* Amount
Red River Authority of Texas PCRB (CPL, PSO, WTU) 4.450% 06/01/2020 756864BT0 $12,660,000
Senior Note, Series H 5.150% 12/01/2019 744533BK5 $250,000,000
Senior Note, Series G 6.625% 11/15/2037 744533BJ8 $250,000,000
Senior Note, Series I 4.400% 02/01/2021 744533BL3 $250,000,000
Senior Note, Series A 3.170% 03/31/2025 744533C*9 $125,000,000
Senior Note, Series B 4.090% 03/31/2045 744533C@7 $125,000,000
Senior Note, Series C 3.050% 08/01/2026 744533C#5 $50,000,000
Senior Note, Series D 4.110% 08/01/2046 744533D*8 $100,000,000
Bank Term Loan Floating 11/04/2019 N/A $125,000,000
Total $1,287,660,000
DEBT SCHEDULES
48 52nd EEI Financial Conference | aep.com
Note: Debt schedules current as of 9/30/17.
* PPN – Private Placement Number
Southwestern Electric Power Company Interest Maturity CUSIP / PPN* Amount
Bank Term Loan Floating 06/29/2020 N/A $115,000,000
Sabine Mines 6.370% 10/31/2024 78532*AC7 $25,000,000
Sabine Mines 4.580% 02/21/2032 78532*AD5 $47,125,000
Sabine River Authority of Texas, Series 2006 4.950% 03/01/2018 785652CJ5 $81,700,000
Parish of DeSoto, Series 2010 1.600% 01/01/2019 241627AW8 $53,500,000
Senior Note, Series F 5.875% 03/01/2018 845437BJ0 $300,000,000
Senior Note, Series G 6.450% 01/15/2019 845437BK7 $400,000,000
Senior Note, Series H 6.200% 03/15/2040 845437BL5 $350,000,000
Senior Note, Series I 3.550% 02/15/2022 845437BM3 $275,000,000
Senior Note, Series J 3.900% 04/01/2045 845437BN1 $400,000,000
Senior Note, Series K 2.750% 10/01/2026 845437BP6 $400,000,000
Total $2,447,325,000
Wheeling Power Company Interest Maturity CUSIP / PPN* Amount
West Virginia Economic Development Authority, Series 2013A Floating 06/01/2037 N/A $65,000,0001
Senior Note, Series A, Tranche A 3.360% 06/01/2022 96316#AB9 $113,000,000
Senior Note, Series A, Tranche B 3.700% 06/01/2025 96316#AC7 $122,000,000
Senior Note, Series A, Tranche C 4.200% 06/01/2035 96316#AD5 $50,000,000
Total $350,000,000
1 Put date 06/30/2018
DEBT SCHEDULES
49 52nd EEI Financial Conference | aep.com
OVERVIEW
Appalachian Power Company (APCo) (organized in Virginia in 1926) is engaged in the generation,
transmission and distribution of electric power to approximately
957,000 retail customers in the southwestern portion of Virginia
and southern West Virginia, and in supplying and marketing
electric power at wholesale to other electric utility companies,
municipalities and other market participants. As of December 31,
2016, APCo had 1,845 employees. APCo is a member of PJM.
Wheeling Power Company (WPCo) (organized in West Virginia in 1883 and reincorporated in 1911)
provides electric service to approximately 41,000 retail
customers in northern West Virginia. As of December 31, 2016,
WPCo had 57 employees. WPCo is a member of PJM.
Kingsport Power Company (KGPCo) (organized in Virginia in 1917) provides electric service to
approximately 48,000 retail customers in Kingsport and eight
neighboring communities in northeastern Tennessee. As of
December 31, 2016, KGPCo had 53 employees. KGPCo is a
member of PJM.
PRINCIPAL
INDUSTRIES SERVED:
Coal Mining
Primary Metals
Chemical Manufacturing
Pipeline Transportation
Paper Manufacturing
President and Chief Operating Officer:
Chris Beam
Total Customers at 12/31/16:
Residential 887,000
Commercial 146,000
Industrial 5,000
Other 8,000
Total 1,046,000
Owned Generating Capacity 7,412 MW
PPA Capacity 799 MW
Generating & PPA Capacity by Fuel Mix:
• Coal: 65.5%
• Hydro & Wind: 15.1%
• Natural Gas: 19.4%
Transmission Miles 6,435
Distribution Miles 54,547
Note: Values consolidate APCo, WPCo and KGPCo.
Since January 2017
27 years with AEP
50 52nd EEI Financial Conference | aep.com
APCo FINANCIAL & OPERATIONAL DATA
* Source: 3Q17 Financial Statements (unaudited)
** Source: 2016 10K Financial Statements
*** GWh Sales – Weather Normalized
Credit Ratings/Outlook
Moody's S&P
Baa1/S A-/S
Capital Structure (in thousands)
Capital Structure 2016** 9/30/2017*
Debt Equity Total Debt Equity Total
Capitalization Per Balance Sheet
4,113,500 3,583,500 7,697,000 4,048,900
3,740,800
7,789,700
% of Capitalization Per Balance Sheet 53.4% 46.6% 100.0% 52.0% 48.0% 100.0%
FFO Interest Coverage 5.51 5.29^
FFO Total Debt 21.7% 21.1%
^ - calculated on rolling 12-month avg.
11,327 11,504 11,851
6,687 6,707 6,799
9,410 9,866 10,314
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2016 2015 2014
Kilo
watt
-ho
urs
Summary of KWh Energy Sales*** (in millions of KWhs)
Residential Commercial Industrial Other
29,433 30,074 31,002
Summary of Degree Days**
2016 2015 2014
(in degree days)
Heating Actual 2,105 2,162 2,645
Normal 2,257 2,248 2,232
Cooling Actual 1,480 1,290 1,056
Normal 1,198 1,196 1,206
2017 Asset Data* (in thousands)
As of 9/30/17
Total Assets $ 12,122,600
Net Plant Assets $ 10,068,200
Cash $ 2,900
51 52nd EEI Financial Conference | aep.com
WPCo FINANCIAL & OPERATIONAL DATA
Credit Ratings/Outlook
Moody's S&P
NR A-/S
Summary of Degree Days
2016 2015 2014
(in degree days)
Heating Actual 3,292 3,569 4,113
Normal 3,712 3,694 3,687
Cooling Actual 1,117 935 715
Normal 732 725 721
* Source: 2Q17 Financial Statements (unaudited)
** Source: 2016 Annual Financial Statements
*** GWh Sales – Weather Normalized
Capital Structure (in thousands)
Capital Structure 2016** 6/30/2017*
Debt Equity Total Debt Equity Total
Capitalization Per Balance Sheet
348,572
412,839
761,411
348,690
412,605
761,295
% of Capitalization Per Balance Sheet 45.8% 54.2% 100.0% 45.8% 54.2% 100.0%
FFO Interest Coverage 5.90 5.94^
FFO Total Debt 16.4% 16.5%
^ - calculated on rolling 12-month avg.
407 417 417
441 445 441
2,905 2,748 2,397
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2016 2015 2014
Kilo
wat
t-h
ou
rs
Summary of KWh Energy Sales*** (in millions of KWhs)
Residential Commercial Industrial Other
3,759 3,615 3,260
2017 Asset Data* (in thousands)
As of 6/30/17
Total Assets $ 1,101,228
Net Plant Assets $ 900,559
Cash $ 31
52 52nd EEI Financial Conference | aep.com
KGPCo FINANCIAL & OPERATIONAL DATA
* Source: 2Q17 Financial Statements (unaudited)
** Source: 2016 Annual Financial Statements
*** GWh Sales – Weather Normalized
Summary of Degree Days
2016 2015 2014
(in degree days)
Heating Actual 2,070 1,979 2,532
Normal 2,226 2,221 2,219
Cooling Actual 1,455 1,260 1,088
Normal 1,080 1,078 1,069
Capital Structure (in thousands)
Capital Structure 2016** 6/30/2017*
Debt Equity Total Debt Equity Total
Capitalization Per Balance Sheet 48,438 37,531 85,969 49,442 40,942 90,384
% of Capitalization Per Balance Sheet 56.3% 43.7% 100.0% 54.7% 45.3% 100.0%
675 683 682
394 395 392
918 981 981
-
500
1,000
1,500
2,000
2,500
2016 2015 2014
Kilo
watt
-ho
urs
Summary of KWh Energy Sales*** (in millions of KWhs)
Residential Commercial Industrial Other
2,022 2,094 2,091
2017 Asset Data* (in thousands)
As of 6/30/17
Total Assets $ 155,713
Net Plant Assets $ 126,974
Cash $ 68
53 52nd EEI Financial Conference | aep.com
MAJOR CUSTOMERS:
WVA Manufacturing (WV)
Domtar Paper, LLC (TN)
Air Products & Chemicals Inc.(TN)
Greif Brothers Corporation (VA)
Georgia-Pacific Corporation (VA)
Roanoke Electric Steel Corporation (VA)
Steel of WV, Inc. (WV)
Constellium Rolled Products (WV)
The Goodyear Tire and Rubber Co. (VA)
Felman Production, Inc (WV)
(Data for year ended December 2016)
APPALACHIAN AREA
INVESTOR OWNED UTILITIES * TYPICAL BILL COMPARISON **
Top 10 Customers = 27% of industrial sales
Metropolitan areas account for 57% of ultimate
sales102 persons per square mile (U.S. = 87)
(Data for 12 months ended December 2016)
** Typical bills are displayed in $/month, based on
1,000 kWh of residential usage. Billing
amounts sourced from the EEI Typical Bills and
Average Rates Report as of January 1, 2017.
CUSTOMER STATISTICS
* Customer counts are a 12-month average as of December 31,
2016 and were sourced from Sales_Ult_Cust_2016.xlsx at
https://www.eia.gov/electricity/data/eia861/
West Virginia Customers
APCo
429,047
Monongahela Power Co
389,759
The Potomac Edison
Company
139,888
WPCo
41,267
Black Diamond Power Co
3,956
Virginia Customers
Virginia Electric & Power Co
2,405,875
APCo
527,611
Kentucky Utilities Co
28,222
Tennessee Customers
KGPCo 47,489
West Virginia $/month
Monongahela Power Co 112.48
The Potomac Edison
Company 112.48
APCo 120.93
WPCo 120.93
Virginia $/month
APCo 114.29
Virginia Electric & Power Co 109.26
Kentucky Utilities Co 102.19
Tennessee $/month
KGPCo 91.58
54 52nd EEI Financial Conference | aep.com
COMMISSION OVERVIEW Virginia State Corporation Commission
Commissioners
Number: 3 Appointed/Elected: Elected Term: 6 Years Political Makeup: R: 2 D: 1
Qualifications for Commissioners
The Virginia State Corporation Commission (VSCC) is composed of three members elected by the General Assembly. Commissioners are
elected to serve six-year terms, staggered in two year increments. The chair rotates annually among the three commissioners on February 1.
Commissioners
Mark C. Christie, (Rep.), since 2004; current term expires 2022. Prior counsel to the Speaker of the House of delegates of the Virginia
General Assembly. Lawyer, private practice. Law degree from Georgetown.
Judith Williams Jagdmann, Chairman, (Rep.), since 2006; current term expires 2018. Law degree from T.C. Williams School of Law at the
University of Richmond. Served as Deputy Attorney General for Civil Litigation Division from 1998 to 2005. Attorney General for
Commonwealth of Virginia from 2005 to 2006.
James C. Dimitri, (Dem.), since 2008; current term expires 2020. Prior to being named Commissioner, Dimitri was in private practice in
Richmond. From 1994 to 2000 he served as Senior Counsel, then General Counsel at the SCC. He was an assistant Attorney General from
1983 to 1987. Dimitri received his undergraduate degree in economics from the University of Virginia and his J.D. from the Boston University
School of Law.
AEP Regulatory Status
APCo-VA provides retail electric service in Virginia at unbundled rates. In early 2015, the General Assembly of VA passed the “Rate Freeze
Law”, effective in July 2015. Under the new law, no changes can be made to the existing tariff rates until biennial rate rev iews resume. For
APCo, biennial reviews are suspended until 2020 with the first biennial review applying to the earnings for calendar years 2018 and 2019.
APCo-VA is entitled to adjustments to fuel, transmission and certain other rates to recover its actual costs. Virginia currently has a voluntary
renewable energy standard which phased in starting at 4% in 2010 and increases to 15% by 2025.
55 52nd EEI Financial Conference | aep.com
COMMISSION OVERVIEW Public Service Commission of West Virginia
Commissioners
Number: 3 Appointed/Elected: Appointed Term: 6 Years Political Makeup: R: 2 D: 1
Qualifications for Commissioners
The West Virginia Public Service Commission (WVPSC) consists of three members, appointed by the Governor, with the advice and consent
of the senate. No more than two members of the commission may belong to the same political party. The Commissioners serve six year
staggered terms, with one term expiring as of July 1 of each odd numbered year. One Commissioner is designated as Chairman of the
Commission by the Governor. The Chairman serves as the chief fiscal officer of the Commission.
Commissioners
Michael A. Albert, Chairman (Rep.), since 2007; term expires June 2019. Served as a member in the Business Law Department of Jackson
Kelly. President and Chairman of the board of directors of the Kanawha County Public Library. Bachelor’s degree and Doctorate of
Jurisprudence from West Virginia University.
Renee A. Larrick, Commissioner (Rep.), since 2017; term expires June 2023. Former Business Manager for a private law firm. Served on
the board of directors of the United Way of Southern West Virginia. Bachelor’s degree from University of Kentucky.
Brooks McCabe, Commissioner (Dem.), since 2014; term expires June 2021. Commissioner McCabe is the Managing Member and Broker
of West Virginia Commercial, LLC. Served as a Senator representing Kanawha County from 1998-2014. Doctor of Education degree from
West Virginia University.
AEP Regulatory Status
APCo and Wheeling Power in WV provide retail electric service at bundled rates approved by the WV PSC. West Virginia has an active
annual ENEC (Expanded Net Energy Cost) mechanism, which provides for a rate adjustment for fuel costs, among other items. In June
2016, the Commission authorized new rates through a construction surcharge and the ENEC.
56 52nd EEI Financial Conference | aep.com
COMMISSION OVERVIEW Tennessee Public Utility Commission
AEP Regulatory Status
Tennessee has no deregulation legislation and no base rate freeze or cap. Tennessee has an active fuel clause. In August 2016, the TPUC
authorized new base rates in Kingsport Power Company’s first base rate case since 1992. Effective with the authorization, fue l, purchased
power and PJM transmission charges have been removed from base rates and are now recovered through a single tracked surcharge.
Commissioners
Number: 5 Appointed/Elected: Appointed Term: 6 Years
Qualifications for Commissioners
The Tennessee Public Utility Commission (TPUC) directors are appointed, one each, by the Governor, Lieutenant Governor (as Speaker of
the Senate), Speaker of the House and two joint appointments by the three together, and are confirmed by the Tennessee General Assembly.
The directors are appointed for six and three-year staggered terms. The chairmanship rotates every year in an agreed upon decision by the
directors.
Commissioners
Herbert H Hilliard, since 2012; current term expires June 2018. Former Executive Vice President and Chief Government Relations Officer for
Frist Horizon National Corporation. Serves as Chairman of the Board of Directors of The National Civil Rights Museum, Board member of
Blue Cross Blue Shield of Tennessee and Commissioner for the Memphis Shelby County Airport Authority. BBA in Personnel Administration
and Industrial Relations from University of Memphis.
David Jones, Chairman, since 2012; current term expires June 2018. President of Complete Holding Group. Certified facilitator/executive
coach with the Alternative Board. BS in Business from University of Tennessee, Knoxville and an MBA from the University of Houston.
Kenneth C. Hill, Director, since 2009; current term expires June 2022. At the time of his appointment to the commission, Hill was Chief
Executive Officer of Appalachian Educational Communication Corporation and served as General Manager of five radio stations reaching
portions of East Tennessee and four surrounding states. Doctor of Religious Education, Andersonville Baptist Seminary.
Robin Morrison, Vice Chairman, since 2013; current term expires June 2020. Vice President and financial center manager for First
Tennessee Bank. Member Chattanooga Bar Association Auxiliary. Bachelor’s degree in Business Administration-Finance from the University
of Tennessee-Chattanooga.
Keith Jordan, since 2017; current term expires June 2018. Former Tennessee state senator serving two terms. Served on Senate Judiciary,
Government Operations, Transportation, and Energy and Conservation committees. Former Executive Director of the Tennessee Law
Enforcement Planning Agency. Juris doctor from Vanderbilt University School of Law.
57 52nd EEI Financial Conference | aep.com
Indiana Michigan Power Company (I&M) (organized in Indiana in 1907) is engaged in the generation,
transmission and distribution of electric power to approximately
592,000 retail customers in northern and eastern Indiana and
southwestern Michigan, and in supplying and marketing electric power
at wholesale to other electric utility companies, rural electric
cooperatives, municipalities and other market participants. As of
December 31, 2016, I&M had 2,475 employees. I&M is a member of
PJM.
President and Chief Operating Officer:
Toby Thomas
PRINCIPAL INDUSTRIES SERVED:
Primary Metals
Chemical Manufacturing
Transportation Equipment
Plastics and Rubber Products
Fabricated Metal Product Manufacturing
Total Customers at 12/31/16:
Residential 515,000
Commercial 70,000
Industrial 5,000
Other 2,000
Total 592,000
Owned Generating Capacity 3,626 MW
PPA Capacity 1,539 MW*
Generating & PPA Capacity by Fuel Mix:
• Coal: 46.4%
• Nuclear: 44.1%
• Hydro, Wind & Solar: 9.5%
Transmission Miles 5,163
Distribution Miles 20,425
OVERVIEW
Since January 2017
16 years with AEP
*Includes 917 MW from AEP Generating Company Rockport Plant PPA
58 52nd EEI Financial Conference | aep.com
FINANCIAL & OPERATIONAL DATA
* Source: 3Q17 Financial Statements (unaudited)
** Source: 2016 10K Financial Statements
*** GWh Sales – Weather Normalized
Credit Ratings/Outlook
Moody's S&P
Baa1/P A-/S
Summary of Degree Days**
2016 2015 2014
(in degree days)
Heating Actual 3,429 3,789 4,664
Normal 3,779 3,762 3,737
Cooling Actual 1,039 798 714
Normal 845 846 853
Capital Structure (in thousands)
Capital Structure 2016** 9/30/2017*
Debt Equity Total Debt Equity Total
Capitalization Per Balance Sheet 2,686,600 2,151,700 4,838,300 2,836,000 2,202,900 5,038,900
% of Capitalization Per Balance Sheet 55.5% 44.5% 100.0% 56.3% 43.7% 100.0%
FFO Interest Coverage 4.87 4.47^
FFO Total Debt 18.5% 16.6%
^ - calculated on rolling 12-month avg.
2017 Asset Data* (in thousands)
As of 9/30/17
Total Assets $ 9,767,200
Net Plant Assets $ 5,903,700
Cash $ 1,300
5,527 5,509 5,663
4,942 4,904 4,883
7,780 7,570 7,640
5,100 5,041 5,104
-
5,000
10,000
15,000
20,000
25,000
30,000
2016 2015 2014
Kilo
watt
-ho
urs
Summary of KWh Energy Sales*** (in millions of KWhs)
Residential Commercial Industrial Other
23,349 23,024 23,290
59 52nd EEI Financial Conference | aep.com
INDIANA & MICHIGAN INVESTOR
OWNED UTILITIES * TYPICAL BILL COMPARISON **
1,779,184
2,156,214
** Typical bills are displayed in
$/month, based on 1,000 kWh of
residential usage. Billing amounts
sourced from the EEI Typical Bills
and Average Rates Report as of
January 1, 2017.
Top 10 Customers = 45% of industrial sales
Metropolitan areas account for 66% of ultimate sales
205 persons per square mile (U.S. = 87)
(Data for 12 months ended December 2016)
MAJOR CUSTOMERS:
Steel Dynamics Inc. (IN)
IN TEK (IN)
Air Products & Chemicals Inc (IN)
Linde LLC (IN)
Michelin North America (IN)
Ardagh Glass Inc ((IN)
Metal Technologies Inc. (MI)
Guardian Industries Corp (IN)
Unifrax Corporation (IN)
Honeywell International Inc (IN)
(Data for year ended December 2016)
CUSTOMER STATISTICS
Indiana Customers
Duke Energy Indiana
812,993
IP & L
486,827
NIPSCO
465,930
I & M
461,154
SIGECo
144,400
Michigan Customers
DTE Electric Company
2,168,567
Consumers Energy
1,805,489
I & M
127,887
* Customer counts are a 12-month average as of December 31,
2016 and were sourced from Sales_Ult_Cust_2016.xlsx at
https://www.eia.gov/electricity/data/eia861/
Indiana $/month Michigan $/month
SIGECo 157.04
DTE Electric
Company 164.38
NIPSCO 142.44 Consumers Energy 144.11
Duke Energy Indiana 118.76 I & M 112.30
I & M 116.90
IP & L 113.27
60 52nd EEI Financial Conference | aep.com
COMMISSION OVERVIEW Commissioners
Number: 5 Appointed/Elected: Appointed Term: 4 Years Political Makeup: R: 3 D: 2
Qualifications for Commissioners
Five members, appointed by the Governor from among persons nominated by a legislatively mandated utility commission nominating committee;
four-year, staggered terms, full-time positions. Not more than three of the members of the IURC shall be members of the same political party.
At least one of the commissioners must be an attorney qualified to practice law before the Indiana Supreme Court. The Governor appoints one
of the five as chairperson.
Commissioners
James D. Atterholt, Chair, (Rep.), Since 2017; current term ends February 2020. Served as the Commission’s Chairman previously before
taking a break in service to serve as chief of staff to the Governor. Also served as State Insurance Commissioner and as a State
Representative. Former member of the board of directors for the Organization of MISO States and the Organization of PJM States.
Undergraduate degree from the University of Wisconsin.
Sarah Freeman, Commissioner ( Dem.), since 2016; current term ends January 2018. Former senior staff attorney with the nonpartisan
Indiana Legislative Services Agency for 16 years. Served as a deputy attorney general with the Office of the Indiana Attorney General.
Undergraduate degrees in psychology, French and political science from Indiana University – Bloomington and her juris doctor degree from the
Indiana University Maurer School of Law.
Angela Weber, Commissioner (Rep.), since 2014; current term ends April 2018. Former Marion County deputy prosecuting attorney, former
staff attorney for the Indiana Department of Education. Received juris doctor from the Indiana University Maurer School of Law in 2006.
David E. Ziegner, Commissioner (Dem.), since 1990; current term ends April 2019. Lawyer, staff attorney for Legislative Services Agency,
General Counsel for IURC. Treasurer of NARUC, vice-chair NARUC Committee on Electricity and former chairman of the NARUC clean coal
and carbon sequestration subcommittee. Law degree from the Indiana University School of Law in Indianapolis.
James Huston, Commissioner (Rep.), Since September 2014; current term ends March 2021. Currently serves as Chief to Staff at the Indiana
State Department of Health. Prior to that also served as assistant deputy treasurer and Deputy Commissioner for the Bureau of Motor Vehicles.
Huston received his undergraduate degree from Ball State University.
AEP Regulatory Status
I&M provides retail electric service at bundled rates approved by the IURC. Rates are set on a cost-of-service basis with a fuel recovery
mechanism. I&M has trackers in place for PJM expenses, OSS sharing, clean coal technology, environmental, nuclear life cycle management,
solar pilot project costs, DSM, home energy management and work energy management. Indiana currently has a voluntary renewable standard
which phases in starting at 4% and ending at 10% from 2013-2025. The State recently implemented a 300 day rate case procedural schedule
along with a forward looking test year. A new law signed in May 2017 gradually lowers the retail rate compensation for residents who install solar
or wind power. I&M filed a base rate case on July 26, 2017.
Indiana Utility Regulatory Commission
61 52nd EEI Financial Conference | aep.com
Michigan Public Service Commission
COMMISSION OVERVIEW
Commissioners
Number: 3 Appointed/Elected: Appointed Term: 6 Years Political Makeup: I: 2 R: 1
Qualifications for Commissioners
The Michigan Public Service Commission (MPSC) is composed of three members appointed by the Governor with the advice and consent of the Senate.
Commissioners are appointed to serve staggered six-year terms. No more than two commissioners may represent the same political party. One
commissioner is designated as chairman by the Governor.
Commissioners
Rachel Eubanks, Commissioner, (Rep.), since 2016; current term expires July 2023. Worked in public finance for 13 years, most recently as a director at
Robert W. Baird & Co. Inc. Holds a bachelor’s degree in economics from the University of Michigan.
Sally Talberg, Chairman (Ind.), since 2013; current term expires July 2021. Former senior consultant at Public Sector Consultants. Previously served as
an analyst at the MPSC, managed enforcement and contested cases at the Michigan Department of Environmental Quality and advised commissioners at
the Public Utility Commission of Texas. Holds a bachelor of science from Michigan State University and a masters of Public Administration from the
University of Texas – Austin..
Norman J. Saari, Commissioner, (Ind.) , since 2015; current term expires July 2019. Served as an executive director of governmental affairs for 20 years
at the Consumers Energy Company. Commissioner Saari is a member of the National Association of Regulatory Utility Commissioners and sits on the
Board of Directors of the Organization of PJM States, Inc. Earned a bachelor’s degree from Michigan State University.
AEP Regulatory Status
Customer choice began in January 2002. Generation was not deregulated. Retail rates were unbundled (though they continue to be regulated) to allow
customers to evaluate generation costs. Public Acts 341 and 342 were approved in late 2016 which provided significant energy law updates for electric
utilities:
• The deadline for rate cases to be completed has been shortened from 12 months to 10 months and removed ability for “self-implementation” of rates.
• Required to submit integrated resource plans for MPSC review and approval.
• Utilities required to demonstrate they have enough resources to service anticipated loads.
• Offer a voluntary green pricing program where customers can specify the amount of renewable energy provided.
• 15% of generation must be from renewables by 2021.
In 2017, the MPSC adjusted the electric choice cap for utilities serving less than 200,00 customers and who have not had any load served by an
alternative energy supplier (AES) in the preceding four years. I&M’s cap is currently set at zero. I&M has an active fuel clause that recovers fuel,
purchased energy and capacity, PJM expenses, consumables expenses and off-system sales. Return on CWIP can be included in base rates. Michigan
also has a DSM rider and has approved deferral of nuclear life cycle management costs from 2013-2018. I&M filed a base rate case on May 15, 2017.
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OVERVIEW
Kentucky Power Company (KPCo) (organized in Kentucky in 1919) is engaged in the generation,
transmission and distribution of electric power to
approximately 169,000 retail customers in eastern Kentucky,
and in supplying and marketing electric power at wholesale to
other electric utility companies, municipalities and other
market participants. As of December 31, 2016, KPCo had
550 employees. KPCo is a member of PJM.
President and Chief Operating Officer:
Matthew Satterwhite
Total Customers at 12/31/16:
Residential 137,000
Commercial 30,500
Industrial 1,000
Other 500
Total 169,000
Owned Generating Capacity 1,060 MW
PPA Capacity 393 MW*
Generating & PPA Capacity by Fuel Mix:
• Coal: 80.7%
• Natural Gas: 19.3%
Transmission Miles 1,268
Distribution Miles 10,042
PRINCIPAL INDUSTRIES SERVED:
Petroleum and Coal Products Manufacturing
Coal Mining
Primary Metals
Chemical Manufacturing
Oil and Gas Extraction
Since December 2016
9 years with AEP
*Represents 393 MW from AEP Generating
Company Rockport Plant PPA
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FINANCIAL & OPERATIONAL DATA
Credit Ratings/Outlook
Moody's S&P
Baa2/S A-/S
* Source: 3Q17 Financial Statements (unaudited)
** Source: 2016 Annual Financial Statements
*** GWh Sales – Weather Normalized
Summary of Degree Days
2016 2015 2014
(in degree days)
Heating Actual 2,233 2,482 2,928
Normal 2,462 2,446 2,438
Cooling Actual 1,543 1,096 933
Normal 1,172 1,180 1,184
2017 Asset Data* (in thousands)
As of 9/30/17
Total Assets $ 2,430,874
Net Plant Assets $ 1,768,103
Cash $ 770
Capital Structure (in thousands)
Capital Structure 2016** 9/30/2017*
Debt Equity Total Debt Equity Total Capitalization Per Balance Sheet 868,971 668,401 1,537,372 879,316 662,164 1,541,480
% of Capitalization Per Balance Sheet 56.5% 43.5% 100.0% 57.0% 43.0% 100.0%
FFO Interest Coverage 3.32 3.48^
FFO Total Debt 12.3% 13.3%
^ - calculated on rolling 12-month avg.
2,115 2,198 2,287
1,303 1,327 1,355
2,408 2,693 2,810
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2016 2015 2014
Kilo
watt
-ho
urs
Summary of KWh Energy Sales*** (in millions of KWhs)
Residential Commercial Industrial Other
5,921 6,319 6,557
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KENTUCKY INVESTOR OWNED UTILITIES * TYPICAL BILL COMPARISON **
MAJOR CUSTOMERS:
Catlettsburg Refining LLC
Markwest Energy Appalachia LLC
Air Products & Chemicals, Inc.
AK Steel Holding Corporation
Air Liquide
Calgon Carbon Corp
Czar Coal Corporation
Huntington Alloys
Tennessee Gas Pipeline Co
M C Mining, Inc.
(Data for year ended December 2016)
Top 10 customers = 76% of industrial sales
Metropolitan areas account for 44% of ultimate sales
68 persons per square mile (U.S. = 87)
(Data for 12 months ended December 2016)
** Typical bills are displayed in $/month, based on 1,000 kWh of
residential usage. Billing amounts sourced from the EEI
Typical Bills and Average Rates Report as of January 1, 2017.
CUSTOMER STATISTICS
Kentucky Customers
Kentucky Utilities 518,843
LG & E 404,744
KPCo 168,848
Duke Energy Kentucky 140,014
* Customer counts are a 12-month average as of December 31,
2016 and were sourced from Sales_Ult_Cust_2016.xlsx at
https://www.eia.gov/electricity/data/eia861/
Kentucky $/month
KPCo 132.71
LG & E 105.28
Kentucky Utilities 99.18
Duke Energy Kentucky 85.44
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COMMISSION OVERVIEW Kentucky Public Service Commission
AEP Regulatory Status
KPCo provides retail electric service at regulated bundled rates in Kentucky. Kentucky has an environmental surcharge to recover approved
environmental costs and it has an active fuel clause. Kentucky also has an OSS sharing mechanism and a monthly adjustment clause in
place for DSM. KPCo last implemented base rates in 2015. Kentucky does not have a renewable portfolio standard. Kentucky filed a base
rate case on July 26, 2017.
Commissioners
Number: 3 Appointed/Elected: Appointed Term: 4 Years Political Makeup: R: 3 D: 0
Qualifications for Commissioners
Typically three members, appointed by the governor and confirmed by the state Senate for four-year, staggered terms, full-time positions.
The governor appoints one of the three as chairman and another of the three as vice chairman to serve in the chairman’s absence. Not more
than two members of the KPSC shall be of the same profession or occupation.
Commissioners
Michael J. Schmitt, Chairman (Rep.), Appointed June 2016; current term expires June 30, 2019. Prior to joining the PSC Chairman
Schmitt was a partner at the law firm Porter, Schmitt, Banks and Baldwin where he specialized in energy and education law. J.D. from the
University of Kentucky College of Law.
Robert Cicero, Vice Chairman (Rep.), since April 2016; current term expires June 30, 2020. Before joining the PSC, Mr. Cicero, was a small
business owner and business executive. Vice Chairman Cicero served for 10 years as CFO and Treasurer for Aristech Acrylics LLC. He
also has 20 years experience in various managerial and financial positions with US Steel and its affiliates. He has a MBA from the Joseph M.
Katz Graduate School of Management and a BS in Accounting from the University of Pittsburgh.
Talina R. Mathews, Commissioner (Rep.), since July 2017; current term expires June 30, 2021. Prior to appointment as commissioner,
Mathews served as executive director of the Public Service Commission. She has also served as executive director of the Governor’s Office
of Energy Policy. She is on the board of directors of the Organization of MISO States and the Organization of PJM States. She has a Doctor
of Philosophy and a Master of Arts in economics from the University of Kentucky.
66 52nd EEI Financial Conference | aep.com
AEP Ohio - Ohio Power Company (OPCo) (organized in Ohio in 1907 and re-incorporated in 1924) is
engaged in the transmission and distribution of electric power to
approximately 1,472,000 retail customers in Ohio. Following
corporate separation of OPCo's generation assets in December
2013, OPCo purchases energy and capacity to serve generation
service customers. As of December 31, 2016, OPCo had 1,582
employees. OPCo is a member of PJM.
PRINCIPAL INDUSTRIES SERVED:
Primary Metals
Petroleum and Coal Products Manufacturing
Chemical Manufacturing
Rubber & Plastic Products
Fabricated Metal Products
President and Chief Operating Officer:
Julie Sloat
Total Customers at 12/31/16:
Residential 1,282,000
Commercial 177,000
Industrial 10,000
Other 3,000
Total 1,472,000
PPA Capacity 646
PPA Capacity by Fuel Mix:
• Coal: 67.6%
• Wind & Solar: 32.4%
Transmission Miles 7,866
Distribution Miles 45,727
Since May 2016
17 years with AEP
OVERVIEW
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FINANCIAL & OPERATIONAL DATA
Credit Ratings/Outlook
Moody's S&P
A2/S A-/S
* Source: 3Q17 Financial Statements (unaudited)
** Source: 2016 10K Financial Statements
*** GWh Sales – Weather Normalized
Summary of Degree Days**
2016 2015 2014
(in degree days)
Heating Actual 2,957 3,235 3,734
Normal 3,245 3,226 3,230
Cooling Actual 1,248 975 949
Normal 969 970 960
2017 Asset Data* (in thousands)
As of 9/30/17
Total Assets $ 7,055,000
Net Plant Assets $ 5,580,300
Cash $ 3,100
Capital Structure (in thousands)
Capital Structure 2016** 9/30/2017*
Debt Equity Total Debt Equity Total
Capitalization Per Balance Sheet 1,763,900 2,117,500 3,881,400 1,886,600 2,217,800 4,104,400
% of Capitalization Per Balance Sheet 45.4% 54.6% 100.0% 46.0% 54.0% 100.0%
FFO Interest Coverage 6.54 6.12^
FFO Total Debt 37.8% 28.9%
^ - calculated on rolling 12-month avg.
14,055 14,159 14,328
14,514 14,468 14,326
14,285 14,653 14,541
-
10,000
20,000
30,000
40,000
50,000
60,000
2016 2015 2014
Kilo
watt
-ho
urs
Summary of KWh Energy Sales*** (in millions of KWhs)
Residential Commercial Industrial Other
42,985 43,408 43,326
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OHIO INVESTOR OWNED UTILITIES* TYPICAL BILL COMPARISON**
MAJOR CUSTOMERS:
Lima Refining Co.
Timken Steel Corporation
Globe Metallurgical, Inc.
Republic Steel
Markwest Utica EMG, LLC
Marathon Petroleum Company LP
Eramet Marietta, Inc.
Owens Corning Sales, LLC
Cardinal Gas Services, LLC
Airgas Merchant Gases, LLC
(Data for year ended December 2016)
Top 10 AEP Ohio customers = 32% of industrial sales
Metropolitan areas account for 66% of ultimate sales
169 persons per square mile (U.S. = 87)
(Data for 12 months ended December 2016)
** Typical bills are displayed in $/month, based on 1,000
kWh of residential usage. Billing amounts sourced from
the EEI Typical Bills and Average Rates Report as of
January 1, 2017. Ohio rates represent standard service
offer bundled residential rates.
CUSTOMER STATISTICS
Ohio Customers
AEP Ohio 1,467,725
FE (Ohio Edison) 1,041,123
FE (CEI) 747,747
Duke Energy Ohio Inc 706,793
DP&L 517,570
FE (Toledo Edison) 309,060
* Customer counts are a 12-month average as of December 31,
2016 and were sourced from Sales_Ult_Cust_2016.xlsx at
https://www.eia.gov/electricity/data/eia861/
Ohio $/month
AEP Ohio (OPCo) 135.25
AEP Ohio (CSPCo) 126.77
Duke Energy Ohio Inc 119.63
FE (Toledo Edison) 118.79
FE (Ohio Edison) 115.92
FE (CEI) 115.23
DP&L 112.41
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Ohio Public Utilities Commission
COMMISSION OVERVIEW
AEP Regulatory Status
OPCo currently has an approved electric security plan through May 2018. There is a stipulation pending in the Electric Security Plan
Extension case which if approved will set rates through May 2024. Transmission rates are currently regulated by FERC as reflected in the
OATT and billed to retail customers via the basic transmission cost rider.
Commissioners
Number: 5 Appointed/Elected: Appointed Term: 5 Years Political Makeup: R: 2 D: 1 I: 2
Qualifications for Commissioners
Five members, appointed by the governor and confirmed by the state senate; five-year staggered terms, full-time positions, commissioners
shall be selected from the lists of qualified persons submitted to the governor by the PUC nominating council. Not more than three of the
members of the PUCO shall be members of the same political party. The governor appoints one of the five as chairman, who serves at the
pleasure of the governor until a successor has been designated.
Commissioners
Asim Haque, Chairman, (Ind.) since 2013; term expires April 2021. Prior to joining the commission was assistant counsel at Honda North
America. Prior to that was an attorney with Ice Miller LLP. Bachelor’s degrees in chemistry and political science from Case Western Reserve
University and Juris Doctorate from Ohio State University.
M. Beth Trombold, Commissioner, (Ind.) since 2013; term expires April 2018. Prior to joining the commission, was the assistant director of
the Ohio Development Services Agency. Prior to that was on PUC staff for 16 years. Bachelor’s degree in business administration from Ohio
University and master’s in public policy from Ohio State University.
Thomas W. Johnson, Commissioner, (Rep.) , since 2014; term expires April 2019. Prior to joining the commission, was on the Ohio House
of Representatives for 22 years serving Southeastern Ohio. After that served as Governor Bob Taft’s director of the Office of Budget and
Management from 1999 to 2006. Bachelor’s degree in government from Muskingum University.
Lawrence Friedeman, Commissioner, (Dem.), since 2017; term expires April 2020. Prior to joining the commission, was employed as vice
president of regulatory affairs and compliance at IGS Energy. Received undergraduate and graduate degrees from the University of
Pittsburgh and the University of Pittsburgh School of Law.
Daniel Conway, Commissioner, (Rep.) since 2017; term expires April 2022. Practiced energy and telecommunications law for more than 35
years representing utilities and telecommunications companies before the PUCO. Serves as an adjunct professor at The Ohio State
University. Bachelor’s degree in physics from Miami University and law degree from the University of Michigan.
70 52nd EEI Financial Conference | aep.com
OVERVIEW
Public Service Company of Oklahoma (PSO) (organized in Oklahoma in 1913) is engaged in the generation,
transmission and distribution of electric power to approximately
548,000 retail customers in eastern and southwestern Oklahoma,
and in supplying and marketing electric power at wholesale to other
electric utility companies, municipalities, rural electric cooperatives
and other market participants. At December 31, 2016, PSO had
1,110 employees. PSO is a member of SPP.
President and Chief Operating Officer:
Stuart Solomon
PRINCIPAL INDUSTRIES SERVED:
Paper Manufacturing
Oil & Gas Extraction
Transportation Equipment
Plastics and Rubber Products
Oil Refining and Steel Processing
Total Customers at 12/31/16:
Residential 471,000
Commercial 63,000
Industrial 6,000
Other 8,000
Total 548,000
Owned Generating Capacity 3,940 MW
Gas PPA Capacity 1,023 MW
Wind PPA Capacity 1,137 MW
Generating & PPA Capacity by Fuel Mix:
• Coal 9.4%
• Natural Gas 72.0%
• Wind 18.6%
Transmission Miles 3,271
Distribution Miles 19,886
Since June 2004
28 years with AEP
71 52nd EEI Financial Conference | aep.com
FINANCIAL & OPERATIONAL DATA
*Source: 3Q17 Financial Statements (unaudited)
**Source: 2016 10-K Financial Statements
***GWh Sales – Weather Normalized
Capital Structure (in thousands)
Capital Structure 2016** 9/30/2017*
Debt Equity Total Debt Equity Total
Capitalization Per Balance Sheet 1,338,000 1,214,100 2,552,100 1,404,400 1,232,400 2,636,800
% of Capitalization Per Balance Sheet 52.4% 47.6% 100.0% 53.3% 46.7% 100.0%
FFO Interest Coverage 3.81
5.22^
FFO Total Debt 11.4% 14.6%^
^ - calculated on rolling 12-month avg.
Summary of Degree Days**
2016 2015 2014
(in degree days)
Heating Actual 1,341 1,588 2,113
Normal 1,778 1,774 1,777
Cooling Actual 2,444 2,182 2,054
Normal 2,132 2,127 2,130
2017 Asset Data* (in thousands)
As of 9/30/17
Total Assets $ 4,478,500
Net Plant Assets $ 3,857,900
Cash $ 2,100
Credit Ratings/Outlook
Moody's S&P
A3/S A-/S
6,155 6,143 6,253
5,229 5,146 5,133
5,534 5,410 5,237
1,249 1,242 1,260
18,167 17,941 17,883
-
5,000
10,000
15,000
20,000
2016 2015 2014
Kilo
watt
-ho
urs
Summary of KWh Energy Sales*** (in millions of KWhs)
Residential Commercial Industrial Other
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MAJOR CUSTOMERS:
International Paper Company
Kimberly Clark Corp
Goodyear Tire & Rubber Company
HollyFrontier Corporation
American Airlines
Enable Product, LLC.
Terra Nitrogen
Republic Paperboard
(Data for year ended December 2016)
OKLAHOMA INVESTOR OWNED UTILITIES * TYPICAL BILL COMPARISON **
Oklahoma Customers
PSO 547,142
OG&E 763,758
Empire District 4,686
Top 10 customers = 44% of industrial sales
Metropolitan areas account for 75% of ultimate
sales 49 persons per square mile (U.S. = 87)
(Data for 12 months ended December 2016)
** Typical bills are displayed in $/month, based on
1,000 kWh of residential usage. Billing amounts
sourced from the EEI Typical Bills and Average
Rates Report as of January 1, 2017.
Oklahoma $/month
Empire District 97.06
OG&E 91.62
PSO 89.84
* Customer counts are a 12-month average as of December 31,
2016 and were sourced from Sales_Ult_Cust_2016.xlsx at
https://www.eia.gov/electricity/data/eia861/
CUSTOMER STATISTICS
73 52nd EEI Financial Conference | aep.com
COMMISSION OVERVIEW Oklahoma Corporation Commission
AEP Regulated Electric Utilities
Public Service Company of Oklahoma
Commissioners
Number: 3 Appointed/Elected: Elected Term: 6 Years Political Makeup: R: 3 D: 0
Qualifications for Commissioners
The Oklahoma Corporation Commission (OCC) is composed of three commissioners who are elected by state-wide vote. Commissioners
serve staggered six-year terms. The election pattern was established when the Commission was created by the state constitution.
Commissioners
Bob Anthony, Commissioner, (Rep.), since 1989; current term expires January 2019. Member, NARUC. Served on the boards of the
Oklahoma State, Oklahoma City and South Oklahoma City chambers of commerce. Earned an M.Sc. from the London School of Economics,
an M.A. from Yale University and an M.P.A. from the Kennedy School of Government at Harvard University.
Todd Hiett, Vice Chairman (Rep.), since 2015; current term ends January 2021. Elected to the Oklahoma House of Representatives in
1994, selected as House Minority Leader in 2002 and Speaker of House from 2004-2006. After 12 years in the Legislature, he returned to the
business world and ran his cattle ranch until his election as a Commissioner. He received his undergraduate degree in Animal
Science/Business from Oklahoma State University.
Dana Murphy, Chairman (Rep.), since 2008; current term expires January 2023. Member, NARUC. Murphy’s prior experience includes
working as an administrative law judge at the Commission. She has more than 20 years experience in the petroleum industry including
owning and operating her own private law practice and working as a geologist in the Oklahoma petroleum industry. Juris Doctorate Oklahoma
City University.
AEP Regulatory Status
PSO provides retail electric service in Oklahoma at bundled rates approved by the OCC. PSO’s rates are set on a cost-of-service basis.
Fuel and purchased power costs are recovered by applying a fuel adjustment factor to retail kilowatt-hour sales. The factor is generally
adjusted annually and is based upon forecasted fuel and purchased energy costs. Over- or under-collections of fuel costs for prior periods
are returned to or recovered from customers when new annual factors are established. PSO has an OSS margin sharing mechanism.
Oklahoma currently has a voluntary renewable energy standard of 15% by 2015. PSO filed a base rate case on June 30, 2017.
74 52nd EEI Financial Conference | aep.com
OVERVIEW
Southwestern Electric Power Company (SWEPCo) (organized in Delaware in 1912) is engaged in the generation, transmission
and distribution of electric power to approximately 533,000 retail customers
in northeastern and panhandle of Texas, northwestern Louisiana and
western Arkansas, and in supplying and marketing electric power at
wholesale to other electric utility companies, municipalities, rural electric
cooperatives and other market participants. At December 31, 2016,
SWEPCo had 1,486 employees. The territory served by SWEPCo also
includes several military installations, colleges and universities. SWEPCo
also owns and operates a lignite coal mining operation. SWEPCo is a
member of SPP.
PRINCIPAL INDUSTRIES SERVED:
Oil and Gas Extraction
Petroleum & Coal Products Manufacturing
Primary Metals
Food Manufacturing
Paper Manufacturing
President and Chief Operating Officer:
Venita McCellon-Allen
Total Customers at 12/31/16:
Residential 452,000
Commercial 73,500
Industrial 7,000
Other 500
Total 533,000
Owned Generating Capacity 5,225 MW
PPA Capacity 595 MW
Generating & PPA Capacity by Fuel Mix:
• Coal: 45.1%
• Natural Gas: 46.8%
• Wind: 8.1%
Transmission Miles 4,101
Distribution Miles 25,096
Since July 2010
34 years with AEP
75 52nd EEI Financial Conference | aep.com
FINANCIAL & OPERATIONAL DATA
*Source: 3Q17 Financial Statements (unaudited)
**Source: 2016 10-K Financial Statements
***GWh Sales – Weather Normalized
Capital Structure (in thousands)
Capital Structure
2016** 9/30/2017*
Debt Equity Total Debt Equity Total
Capitalization Per Balance Sheet 2,679,100 2,215,200 4,894,300 2,504,100 2,257,100 4,761,200
% of Capitalization Per Balance Sheet 54.7% 45.3% 100.0% 52.6% 47.4% 100.0%
FFO Interest Coverage 4.58 4.12^
FFO Total Debt 16.5% 14.9%
^ - calculated on rolling 12-month avg.
Summary of Degree Days**
2016 2015 2014
(in degree days)
Heating Actual 917 1,168 1,553
Normal 1,208 1,204 1,230
Cooling Actual 2,516 2,450 2,043
Normal 2,298 2,293 2,279
2017 Asset Data* (in thousands)
As of 9/30/17
Total Assets $ 7,555,900
Net Plant Assets $ 6,549,800
Cash $ 2,200
Credit Ratings/Outlook
Moody's S&P
Baa2/S
A-/S
6,152 6,234 6,308
6,031 6,032 6,032
5,074 5,370 5,901
6,190 6,252 6,241
23,447 23,888 24,482
-
5,000
10,000
15,000
20,000
25,000
30,000
2016 2015 2014
Kilo
watt
-ho
urs
Summary of KWh Energy Sales*** (in millions of KWhs)
Residential Commercial Industrial Other
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MAJOR CUSTOMERS:
XTO Energy (TX)
Domtar Corporation (AR)
Calumet Lubricants (LA)
International Paper Company (TX)
Cooper Tire & Rubber Company (AR)
Pratt Paper, LLC (LA)
Air Liquide Large Industries (TX)
Pilgrim Pride (TX)
Glad Manufacturing Company (AR)
US Steel Tubular Products, Inc. (TX)
(Data for year ended December 2016)
SOUTHWESTERN INVESTOR
OWNED UTILITIES *
TYPICAL BILL COMPARISON **
Arkansas Customers
SWEPCo 118,043
Entergy AR 706,871
OG&E 66,299
Empire
District 4,464
Louisiana Customers
SWEPCo 230,040
CLECO 284,625
Entergy LA 1,268,665
Texas Customers
SWEPCo 184,569
El Paso 312,066
SPSCo 269,313
Entergy TX 439,570
Top 10 customers = 38% of industrial sales
Metropolitan areas account for 72% of ultimate sales
70 persons per square mile (U.S. = 87)
(Data for 12 months ended December 2016)
Arkansas $/month Louisiana $/month Texas $/month
OG&E 77.12 Entergy Gulf St 85.29 SWEPCo 86.29
SWEPCo 83.56 SWEPCo 85.93 SPSCo 106.68
Entergy AR 99.65 Entergy LA 91.30 Entergy TX 117.31
Empire District 110.71
Entergy New
Orleans 115.24 El Paso 123.73
CLECO 117.25
* Customer counts are a 12-month average as of December 31,
2016 and were sourced from Sales_Ult_Cust_2016.xlsx at
https://www.eia.gov/electricity/data/eia861/
CUSTOMER STATISTICS
** Typical bills are displayed in $/month, based on 1,000 kWh of residential usage. Billing amounts sourced
from the EEI Typical Bills and Average Rates Report as of January 1, 2016.
77 52nd EEI Financial Conference | aep.com
COMMISSION OVERVIEW Arkansas Public Service Commission
Commissioners
Number: 3 Appointed/Elected: Appointed Term: 6 Years Political Makeup: R: 1 D: 2
Qualifications for Commissioners
The Arkansas Public Service Commission (APSC) is composed of 3 members. The Governor appoints the Commissioners as well as the
Chairman. Governor Asa Hutchinson appointed Chairman Thomas and Commissioner O’Guinn while former Governor Mike Beebe appoin ted
Commissioner Wills.
Commissioners
Ted Thomas, Chairman (Rep.), since 2015; current term expires in Jan 2021. Commissioner Thomas previously served as Chief Deputy
Prosecuting Attorney, Administrative Law Judge at the Public Service Commission, Budget Director for the Governor and in the Arkansas
House of Representatives. Chairman Thomas received his Juris Doctorate from the University of Arkansas School of Law.
Kimberly A. O’Guinn. Commissioner (Dem.), since 2016; current term expires in Jan 2023. Served as Director of Communications for the
Arkansas Department of Environmental Quality. Received her Bachelor of Science in Environmental Engineering from the University of
Oklahoma.
Elana C. Wills, Commissioner (Dem.), since 2011; current term expires Jan 2019. Served as an Associate Justice on the Arkansas
Supreme Court by gubernatorial appointment from October 2008 – December 2010. Received her Juris Doctorate from the University of
Arkansas School of Law in Fayetteville.
AEP Regulatory Status
SWEPCo-AR provides service at regulated bundled rates in Arkansas. Arkansas has an active fuel pass-through clause. Arkansas has an
OSS margin sharing mechanism. Arkansas allows a forward looking test year that can be based on six months actual and 6 months budget
data. Arkansas also allows adjustments to the test year for all known and measurable changes which occur within twelve months after the
end of the test year.
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Louisiana Public Service Commission
Commissioners
Number: 5 Appointed/Elected: Elected Term: 6 Years Political Makeup: R: 3 D: 2
Qualifications for Commissioners
The Louisiana Public Service Commission (LPSC) is composed of five elected members. The commissioners serve overlapping terms of six
years.
Commissioners
Mike Francis, Commissioner, (Rep.), since 2016; current term ends December 2022. Past founder and chief executive officer of Francis
Drilling Fluids, Ltd; one of the oldest drilling fluids companies on the Gulf Coast. Chairman of the Republican Party in Louisiana from 1994-
2000.
Foster L. Campbell, Commissioner, (Dem.), since 2003; current term ends December 2020. Member, Louisiana State Senate (1976-
2002). Independent insurance businessman and farmer, former school teacher and agricultural products salesman. Bachelor’s degree from
Northwestern State University.
Lambert C. Bossiere, III, Commissioner, (Dem.), since 2005; current term ends December 2022. B.S. Business Administration from
Southern University. Former First City Court Constable for the City of New Orleans. Member of NARUC.
Eric Skrmetta, Chairman, (Rep.), since 2009; current term ends December 2020. Practicing Attorney since 1985. Practicing Mediator since
1989. Republican State Central Committee District 81. Juris Doctorate from Southern University Law School.
Craig Green, Commissioner-Elect, (Rep.), won the primary election for the seat in October 2017 and will replace Interim Commissioner ,
Damon Baldone (recently appointed by the Governor to temporarily fill the vacant seat). Orthopedic surgeon in Baton Rouge.
Undergraduate and medical degrees from Louisiana State University and holds an MBA from Yale University.
AEP Regulatory Status
SWEPCo-LA provides service at regulated bundled rates in Louisiana. Louisiana has an active fuel pass-through clause and an OSS margin
sharing mechanism. All IOUs are regulated pursuant to formula rate plans (FRP). Louisiana has allowed CWIP return on new generation
projects, in limited circumstances. The FRP was implemented for SWEPCo on August 1, 2008 with annual true-ups required. The LPSC
recently extended the FRP to cover the 2015 and 2017 test years. SWEPCo currently has its 2015 FRP filing (for test year 2014) pending
before the LPSC.
COMMISSION OVERVIEW
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Public Utility Commission of Texas
Commissioners
Number: 3 Appointed/Elected: Appointed Term: 6 Years Political Makeup: R: 3 D: 0
Qualifications for Commissioners
To be eligible for appointment, a commissioner must be: a qualified voter and a citizen of the U.S.; a competent and experienced
administrator; well informed and qualified in the field of public utilities and public utility regulation; and, have at least five years of experience
in the administration of business or government or as a practicing attorney or certified public accountant. Chairman appointed by the
Governor.
Commissioners
DeAnn Walker, Chairman, (Rep.), since 2017, current term expires September 2021. Previously served as senior policy advisor to current
Governor Abbott related to policy matters on regulated industries. Also served as director of regulatory affairs and as an associate general
counsel for CenterPoint Energy. Received a law degree from the South Texas College of Law.
Kenneth W. Anderson Jr., Commissioner, (Rep.), since 2008; current term expired August 2017. Past Director of Governmental
Appointments under former Governor Perry. Prior to that Anderson served in private practice as a corporate attorney in the area of securities
law and regulatory matters. He also served as a member of the Texas Securities Board from 1999-2006. Anderson holds a law degree from
Southern Methodist University.
Brandy Marty Marquez , Commissioner, (Rep.), since 2013; current term expires September 2019. Formerly Governor Perry’s chief of
staff. Has also held positions as: governor’s Deputy Chief of Staff, Director of the Budget, Planning and Policy Division and deputy legislative
director/liaison to the Texas House of Representatives. Bachelor’s degree in government from University of Texas and Juris Doctorate from St
Mary’s University.
AEP Regulatory Status
Retail competition in the SPP area of Texas, including SWEPCo’s, has been delayed by legislation. SWEPCo-TX has an active fuel pass-
through clause as well as OSS margin sharing. In limited circumstances, CWIP is allowed in rate base. Texas has a mandatory, statewide
renewable installed capacity requirement of 5,880 MW by 2015 and a target of 10,000 MW by 2025, which it has surpassed. SWEPCo-TX
implemented a new Distribution Cost Recovery Factor (DCRF) in Texas on July 1, 2016 and filed a base rate case on December 16, 2016.
COMMISSION OVERVIEW
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Total Customers at 12/31/16:
Residential 860,000
Commercial 148,000
Industrial 9,000
Other 7,000
Total 1,024,000
Owned Generating Capacity 355 MW
Generating Capacity by Fuel Mix:
• Coal 100.0%
Transmission Miles 8,400
Distribution Miles 43,182
OVERVIEW
AEP Texas (organized in Delaware in 1925) was formed by the merger
of AEP Texas Central Company and AEP Texas North Company on
December 31, 2016 and is engaged in the transmission and distribution of
electric power to approximately 1,024,000 retail customers in west and south
Texas. The total output from AEP Texas North’s remaining active generating
unit (Oklaunion Plant) is sold to an affiliate at AEP Texas North’s cost
pursuant to an agreement effective through 2027. The territory served by
AEP Texas also includes several military installations. At December 31, 2016,
AEP Texas had 1,500 employees. AEP Texas is a member of ERCOT.
PRINCIPAL INDUSTRIES SERVED:
Petroleum & Coal Products Manufacturing
Chemical Manufacturing
Oil and Gas Extraction
Food Manufacturing
Pipeline Transportation
MAJOR CUSTOMERS:
Formosa Utility Venture
Valero Energy Corporation
Markwest Energy Partners
Flint Hills Resources
Equistar Bay City
(Data for year ended December 2016)
President and Chief Operating Officer:
Judith Talavera
Since June 2016
17 years with AEP
Top 10 customers = 54% of industrial sales
Metropolitan areas account for 74% ultimate
sales 31 persons per square mile (U.S. = 87)
(Data for 12 months ended December 2016)
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FINANCIAL & OPERATIONAL DATA
*Source: 3Q17 Financial Statements (unaudited)
**Source: 2016 Annual Report
***KWh Sales – Weather Normalized
Summary of Degree Days
2016 2015 2014
(in degree days)
Heating Actual 202 390 428
Normal 328 325 337
Cooling Actual 3,058 2,718 2,553
Normal 2,648 2,642 2,618
Capital Structure (in thousands)
Capital Structure 2016** 9/30/2017*
Debt^ Equity Total Debt^ Equity Total
Capitalization Per Balance Sheet 3,387,200 1,657,100 5,044,300 3,722,500 2,004,600 5,727,100
% of Capitalization Per Balance Sheet 67.1% 32.9% 100.0% 65.0% 35.0% 100.0%
FFO Interest Coverage 4.74 4.86
FFO Total Debt 17.1% 14.7%
^^ - calculated on rolling 12-month avg.
^includes securitization debt of $1,245M and $1,059M at December 31, 2016 and Sept. 30, 2017 respectively
Credit Ratings/Outlook
Moody's S&P
Baa1/S A-/S
11,682 11,273 11,395
11,068 10,736 10,915
7,900 7,699 7,290
31,225 30,285 30,184
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2016 2015 2014
Kilo
watt
-ho
urs
Summary of KWh Energy Sales** (in millions of KWhs)
Residential Commercial Industrial Other
2017 Asset Data* (in thousands)
As of 9/30/17
Total Assets $ 8,679,900
Net Plant Assets $ 6,339,700
Cash $ 100
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COMMISSION OVERVIEW Public Utility Commission of Texas
AEP Regulatory Status
AEP Texas provides retail transmission and distribution service on a cost-of-service basis at rates approved by the PUCT and wholesale
transmission service under tariffs approved by the FERC consistent with PUCT rules. Distribution rate riders are in place to recover AMI,
wholesale transmission expenses and energy efficiency costs. Interim Transmission Cost of Service (TCOS) filings can be filed twice a year
to recover transmission investment and Distribution Cost Recovery Factor (DCRF) filings can be filed once a year to recover distribution
investment.
Commissioners
Number: 3 Appointed/Elected: Appointed Term: 6 Years Political Makeup: R: 3 D: 0
Qualifications for Commissioners
To be eligible for appointment, a commissioner must be: a qualified voter and a citizen of the U.S.; a competent and experienced
administrator; well informed and qualified in the field of public utilities and public utility regulation; and, have at least five years of experience
in the administration of business or government or as a practicing attorney or certified public accountant. Chairman appointed by the
Governor.
Commissioners
DeAnn Walker, Chairman, (Rep.), since 2017, current term expires September 2021. Previously served as senior policy advisor to current
Governor Abbott related to policy matters on regulated industries. Also served as director of regulatory affairs and as an associate general
counsel for CenterPoint Energy. Received a law degree from the South Texas College of Law.
Kenneth W. Anderson Jr., Commissioner, (Rep.), since September 2008. Past Director of Governmental Appointments under former
Governor Perry. Prior to that Anderson served in private practice as a corporate attorney in the area of securities law and regulatory matters.
He also served as a member of the Texas Securities Board from 1999-2006. Anderson holds a law degree from Southern Methodist
University.
Brandy Marty Marquez , Commissioner, (Rep.), since 2013; current term expires September 2019. Formerly Governor Perry’s chief of
staff. Has also held positions as: governor’s Deputy Chief of Staff, Director of the Budget, Planning and Policy Division and deputy legislative
director/liaison to the Texas House of Representatives. Bachelor’s degree in government from University of Texas and Juris Doctorate from St
Mary’s University.
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REGULATED GENERATION
• Regulated Generation Summary
• Owned Regulated Generation
• Regulated Fuel Procurement – 2018 Projected
• Regulated Coal Delivery – 2018 Projected
• Jurisdictional Fuel Clause Summary
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REGULATED GENERATION SUMMARY
Net Maximum Capacity
(in MW)
Company Owned
Capacity
Renewable
PPA
Gas
PPA
OVEC
PPA***
Total
Capacity
AEP Generating Company* 1,310 1,310
Appalachian Power Company 6,632 455 344 7,431
Wheeling Power Company 780 780
Kentucky Power Company 1,060 1,060
Indiana Michigan Power Company 3,626 450 172 4,248
Ohio Power Company 209 437 646
Public Service Company of Oklahoma 3,940 1,137 1,023 6,100
Southwestern Electric Power Company 5,225 469 126 5,820
AEP Texas** 355 355
Total Capacity 22,928 2,720 1,149 953 27,750
Energy Efficiency/Demand Response 2,021
Total Capacity & EE/DR 29,771
* AEP Generating Company has PPA with I&M (70%) and KPCo (30%) for its owned Rockport capacity.
** AEP Texas North has a PPA for its share of Oklaunion (with Competitive operations).
*** Represents AEP's 43.7% interest in Ohio Valley Electric Corporation (OVEC)
See Renewable Resources pages in “Transforming our Generation Fleet” for additional information on Renewable PPAs.
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Plant Name Units State Year Plant
Commissioned Fuel Type
Owned Coal / Lignite
Owned Gas
Owned Nuclear
Owned Hydro
Owned Solar
Owned Net Maximum Capacity (MW)
AEP Generating Company
Rockport * 2 IN 1984 Steam - Coal 1,310 1,310
Appalachian Power Company
Buck 3 VA 1912 Hydro 9 9
Byllesby 4 VA 1912 Hydro 22 22
Claytor 4 VA 1939 Hydro 76 76
Leesville 2 VA 1964 Hydro 50 50
London 3 WV 1935 Hydro 14 14
Marmet 3 WV 1935 Hydro 14 14
Niagara 2 VA 1906 Hydro 2 2
Winfield 3 WV 1938 Hydro 15 15
Smith Mountain 5 VA 1965 Pumped Storage 586 586
Ceredo 6 WV 2001 Natural Gas 516 516
Clinch River 2 VA 1958/2016 Natural Gas 465 465
Dresden 1 OH 2012 Natural Gas 613 613
Amos 3 WV 1971 Steam - Coal 2,930 2,930
Mountaineer 1 WV 1980 Steam - Coal 1,320 1,320
4,250 1,594 788 6,632
Wheeling Power Company
Mitchell 2 WV 1971 Steam - Coal 780 780
Kentucky Power Company
Big Sandy 1 KY 1963/2016 Natural Gas 280 280
Mitchell 2 WV 1971 Steam - Coal 780 780
780 280 1,060
* PPA with I&M (70%) and KPCo (30%) for capacity and energy entitlements
OWNED REGULATED GENERATION
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Plant Name Units State Year Plant
Commissioned Fuel Type
Owned Coal / Lignite
Owned Gas
Owned Nuclear
Owned Hydro
Owned Solar
Owned Net Maximum Capacity (MW)
Indiana Michigan Power Company
Berrien Springs 12 MI 1908 Hydro 7 7
Buchanan 10 MI 1919 Hydro 4 4
Constantine 4 MI 1921 Hydro 1 1
Elkhart 3 IN 1913 Hydro 3 3
Mottville 4 MI 1923 Hydro 2 2
Twin Branch 6 IN 1904 Hydro 5 5
Deer Creek 1 IN 2016 Solar 3 3
Olive 1 IN 2016 Solar 5 5
Twin Branch 1 IN 2016 Solar 3 3
Watervliet 1 MI 2016 Solar 5 5
Rockport 2 IN 1984 Steam - Coal 1,310 1,310
Cook 2 MI 1975 Steam - Nuclear 2,278 2,278
1,310 2,278 22 16 3,626
Public Service Company of Oklahoma
Comanche 1 OK 1973 Steam - Natural Gas 248 248
Northeastern (1&2) 2 OK 1961 Steam - Natural Gas 912 912
Riverside (1&2) 2 OK 1974 Steam - Natural Gas 907 907
Riverside (3&4) 2 OK 2008 Steam - Natural Gas 160 160
Southwestern (1-3) 3 OK 1952 Steam - Natural Gas 465 465
Southwestern (4&5) 2 OK 2008 Steam - Natural Gas 170 170
Tulsa 2 OK 1923 Steam - Natural Gas 319 319
Weleetka 3 OK 1975 Steam - Natural Gas 185 185
Northeastern (3) 1 OK 1979 Steam - Coal 469 469
Oklaunion 1 TX 1986 Steam - Coal 105 105
574 3,366 3,940
OWNED REGULATED GENERATION
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Plant Name Units State Year Plant
Commissioned Fuel Type
Owned
Coal /
Lignite
Owned
Gas
Owned
Nuclear
Owned
Hydro
Owned
Solar
Owned
Net Maximum
Capacity (MW)
Southwestern Electric Power Company
Stall 1 LA 2010 Natural Gas 534 534
Mattison 4 AR 2007 Natural Gas 291 291
Arsenal Hill 1 LA 1960 Steam - Natural Gas 110 110
Lieberman 3 LA 1947 Steam - Natural Gas 242 242
Knox Lee 4 TX 1950 Steam - Natural Gas 475 475
Wilkes 3 TX 1964 Steam - Natural Gas 893 893
Lone Star 1 TX 1954 Steam - Natural Gas 50 50
Welsh 2 TX 1977 Steam - Coal 1,053 1,053
Flint Creek 1 AR 1978 Steam - Coal 264 264
Turk 1 AR 2012 Steam - Coal 477 477
Pirkey 1 TX 1985 Steam - Lignite 580 580
Dolet Hills 1 LA 1986 Steam - Lignite 256 256
2,630 2,595 5,225
AEP Texas
Oklaunion* 1 TX 1986 Steam - Coal 355 355
Total Owned Regulated Net Maximum Capacity 11,989 7,835 2,278 810 16 22,928
* AEP Texas North sells its share of Oklaunion energy to AEP Energy Partners through
a PPA
OWNED REGULATED GENERATION
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Coal – West Regulated
Coal – East Regulated Total Coal - Regulated
REGULATED FUEL PROCUREMENT – 2018 PROJECTED
Fuel Stats:
- Expected 2018 Consumption: Coal: approx. 34M tons
Natural Gas: approx. 90 BCF
- Coal 68% contracted for 2018 and 41% contracted for 2019
- Avg. 2017 YTD Regulated Delivered Price:
Coal: System - ~$44/ton East - ~$49/ton
West - ~$37/ton
Natural Gas: ~$3/MMBtu
- Projected 2018 Regulated Coal Delivered Price:
System - ~$42/ton East - ~$46/ton
West - ~$36/ton
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Total AEP Regulated System
* Reflects coal delivered to AEP plants transported
through a combination of rail and barge
AEP East AEP West
REGULATED COAL DELIVERY – 2018 PROJECTED
*
Barge 57%
Rail 3%
Rail/Barge 33%
Belt 7%
*
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Arkansas
Indiana
Kentucky
Louisiana
Michigan
Oklahoma
Tennessee
Texas (SPP)
Virginia
West Virginia
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Annually
Biannually
Monthly
Monthly
Annually
Annually
Annually
Triennially*
Annually
Annually
Jurisdiction Active Fuel Clause
Adjustment
Frequency
* Fuel clause may be adjusted more frequently if a prescribed variance occurs
JURISDICTIONAL FUEL CLAUSE SUMMARY
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• AEP Transmission Holdco Legal Entity Structure
• AEP Transco Business Overview
• AEP Transco Project Mix & Footprint
• Transmission Investment Needs
• Transco State & FERC Regulatory Compacts
• FERC Formula Rate & Filings
• Active Joint Venture Projects
• Competitive Transmission – Transource
• Grid Assurance Executive Summary & Timeline
• BOLD® Strategy
• Evolution of Transmission Trackers
• Favorable Recovery of Transmission Investment
TRANSMISSION INITIATIVES
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AEP TRANSMISSION HOLDCO LEGAL ENTITY STRUCTURE AEP Transmission Company, LLC (“AEP Transco”) is wholly-owned by AEP Transmission Holding Company, LLC (“AEP Trans Holdco”)
AEP Trans Holdco is a wholly-owned subsidiary of American Electric Power Company, Inc. (“AEP”), one of the largest utility holding companies in the U.S.
Fully operational
Regulatory Approval Required
Joint Venture
$2,896M Net Plant
$322M Net Plant
Net Plant totals are as of September 30, 2017, except Pioneer and Prairie Wind, which are as of August 31, 2017.
$148M Net Plant
$143M Net Plant
$1,560M Net Plant
$87M Net Plant
$2,549M Net Plant
$872M Net Plant
$839M Net Plant
$9M Net Plant
Grid Assurance Electric
Transmission
Texas, LLC
Transource Energy, LLC
Transource Missouri, LLC
Transource West Virginia,
LLC
Transource Pennsylvania,
LLC
Transource Maryland, LLC
AEP Appalachian Transmission Company, Inc.
AEP Southwestern Transmission Company, Inc.
Electric Transmission America, LLC
Prairie Wind Transmission,
LLC
Pioneer Transmission,
LLC
AEP Transmission Company,
LLC. (“AEP Transco”)
American Electric Power
Company, Inc. (AEP)
AEP Transmission Holding Co.
LLC. (“AEP Trans Holdco”)
AEP Indiana Michigan Transmission Co., Inc.
AEP Kentucky Transmission Co., Inc.
AEP Ohio Transmission Co., Inc.
AEP Oklahoma Transmission Co., Inc.
AEP West Virginia Transmission Co., Inc.
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AEP TRANSCO BUSINESS OVERVIEW
• An unbundled transmission business focused on ensuring grid reliability at the regional and local level; formed in 2009 with seven wholly-owned FERC regulated utilities (“State Transcos”)
• Active State Transcos located in Indiana and Michigan, Kentucky, Ohio, Oklahoma, Tennessee and West Virginia
• AEP Appalachian Transco is authorized to submit projects for commission approval in Virginia
• Regulatory approvals in Arkansas & Louisiana (AEP Southwestern Transco) required before operation
• Significant investment opportunities in AEP’s transmission system provides growth opportunities for AEP Transco and provides flexibility to AEP’s integrated utility operating companies to direct capital to their distribution and generation businesses
• Improving grid reliability & resiliency
• Grid security and technology
• Customer growth
• Investments to support generation
• Upgrading aging system infrastructure
• Favorable regulatory framework including forward-looking formula rates
• Allowed returns on equity (“ROEs”) of 11.49% and 11.2% in PJM and SPP, respectively, subject to change pending 206 settlements
• Limited revenue risk and have strong counterparties through their participation in the PJM Interconnection (“PJM”) and Southwest Power Pool (“SPP”) RTOs
• Headquartered in Columbus, OH, AEP Transco is supported by the entire AEP Transmission organization. This organization plans, builds and manages all of AEP’s transmission assets.
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AEP TRANSCO PROJECT MIX
Transmission has asset replacement, local reliability and
customer projects combined with RTO mandated projects
537 361
242 164 110
95
69
45 16
18
248
372
446
417 352
337
729 701
787 874
47
30 48 91
$1,222
$1,578
$1,463 $1,433 $1,446
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2016 2017 (E) 2018 (E) 2019 (E) 2020 (E)
AEP Transco Projected Capital Expenditures by Project Category
RTO Mandated Customer Local Reliability Asset Replacement Telecom
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AEP TRANSCO FOOTPRINT
* As of September 30, 2017
The Transcos exist within the expansive service territories of AEP, operating across two RTOs and 10 states.
Transco investment opportunity is directly proportional to AEP's footprint. As the largest owner, operator and developer of
transmission infrastructure in North America, AEP Transco is well positioned for consistent and stable growth.
AEP State Trascos AEP Appalachian Transmission Co., Inc.
AEP Indiana Michigan Transmission Co., Inc.
AEP Kentucky Transmission Co., Inc.
AEP Ohio Transmission Co., Inc.
AEP Oklahoma Transmission Co., Inc.
AEP Southwestern Transmission Co., Inc.
AEP West Virginia Transmission Co., Inc.
State Transco Net Transmission Plant
($ in Millions)* 2017-2020 Capital Plan
($ in Millions)
IM Transco $1,560 $1,769
OH Transco $2,549 $2,227
OK Transco $872 $603
WV Transco $839 $1,089
KY Transco $87 $119
AP Transco $9 $112
Total $5,916 $5,919
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TRANSMISSION INVESTMENT NEEDS
* Note table and graphs refer to Transmission equipment only. Distribution equipment is not included.
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TRANSCO REGULATORY COMPACTS AEP Transco and its seven Transco subsidiaries were formed in 2009 to focus on upgrades to AEP’s
transmission system and provide financial flexibility to AEP’s electric utility Operating Companies.
A summary of regulatory approval status is provided in the table below:
State Transco
State Operational and Approval Status
OH Transco No state regulatory agency approval was required to construct and operate transmission assets in the state of Ohio. OH Transco is fully operational with assets in-service.
IM Transco Indiana Utility Regulatory Commission approval for utility status received November 2011; no Michigan approval required. IM Transco is fully operational with assets in-service.
OK Transco No state regulatory approval required for utility status. OK Transco is fully operational with assets in-service.
WV Transco In a December 2012 order, the West Virginia Public Service Commission (“WVPSC”) required WV Transco to obtain a Certificate of Public Convenience and Necessity (“CPCN”) before beginning construction on each proposed project, until WV Transco established a track record, revenue stream and utility plant base. In September 2015, the WVPSC recognized that WV Transco had established the required track record and granted WV Transco’s petition to exempt projects from the CPCN requirement, when such projects met the “ordinary extension of existing systems” condition, as established for public utilities in the West Virginia Code. WV Transco is fully operational with assets in service.
AP Transco In February 2012, the Virginia State Corporation Commission (“VSCC”) approved a service agreement between AP Transco and APCo limited to studying and evaluating potential transmission projects and for preparation of applications for future submission of project certificate applications to the VSCC. In May 2013, AP Transco and APCo filed a joint application with the Virginia SCC for the approval of the Cloverdale Extra High Voltage Transmission Improvements Project. The VSCC approved the project for APCo to construct. AP Transco can seek certification of future projects in its own name but the Virginia SCC will determine whether the project will ultimately be owned by AP Transco or APCo. AP Transco has not yet filed other project applications. As a result of separate orders issued by the Virginia SCC and the WVPSC in December 2016, AP Transco was granted consent to enter into a joint license agreement that will support investment in Tennessee. AP Transco currently has assets under construction in Tennessee.
KY Transco In February 2011, KY Transco filed an application with the Kentucky Public Service Commission (“KPSC”) in Case No. 2011-00042 seeking a CPCN to operate as a transmission-only public utility in Kentucky. In June 2013, the KPSC denied the application, stating that KY Transco could not be defined as a public utility under Kentucky statute and therefore was not subject to KPSC regulatory jurisdiction. KY Transco is fully operational with assets in service.
SW Transco Applied for public utility status in Arkansas and Louisiana in May 2011 and August 2011, respectively, with supplemental filings made in both jurisdictions. The application for regulatory approval to operate in Louisiana is under consideration, while the application for regulatory approval to operate in Arkansas was denied in January 2015.
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STATE TRANSCOS ARE REGULATED BY FERC Conservative FERC regulation results in timely recovery of costs
• In April 2011, the FERC approved a formula rate mechanism for the State Transcos
• The FERC order dictates how the State Transcos determine their rates, including the recovery of all authorized expenses and the return on and of invested plant
• The approved formula rate mechanism established an annual revenue requirement for transmission services under the PJM and
SPP OATTs, as applicable, and implemented a transmission cost of service formula rate
• Annual rate updates provide a highly predictable and stable source of revenues and income
• For PJM, each State Transco’s annual transmission revenue requirement (“ATRR”) is reset in January, establishing rates for
the one-year forward period of January to December. The rate base component of the formula rate calculation includes a
beginning and ending average transmission plant in service balance
• For SPP, each State Transco’s annual transmission revenue requirement (“ATRR”) is reset in July, establishing rates for the
one-year forward period of July to June. The rate base component of the formula rate calculation includes the prior year’s
transmission plant in service ending balance, plus the current year’s projected plant in service additions.*
• The revenue requirements are derived from the following capital structure and authorized ROEs:
Company RTO Capital Structure %
Equity Cap Authorized ROE*
ATRR**
Rate Base
AP Transco PJM 50% 11.49% $98 KH $73 KH
IM Transco PJM 50% 11.49% $150 MH $953 MH
KY Transco PJM 50% 11.49% $10 MH $60 MH
OH Transco PJM 50% 11.49% $342 MH $1,575 MH
WV Transco PJM 50% 11.49% $81 MH $508 MH
OK Transco SPP 50% 11.20% $96 MH $681 MH
SW Transco SPP 50% 11.20% $125 KH $4 KH
* Subject to change pending 206 application outcome ** PJM effective as of January 2017 and SPP effective as of July 2017
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FERC FORMULA RATE
99
The Transcos benefit from a transparent, partially forward-looking formula rate
mechanism, authorized by the FERC, which minimizes regulatory lag:
+
Operating Expenses
Prior Year (Over)/Under
Recovery
+
=
Revenue Requirement
+ Beginning & Ending Average
- Beginning & Ending Average
- Beginning & Ending Average
+ Beginning & Ending Average
+ Projected
+ Projected
+ Projected
Beginning & Ending Average
11.49%
+ Annual true-up revenue amount to (return)/collect any (over)/under recovery of revenues
= Annual Transmission Revenue Requirement (ATRR) for collection during Rate Year
x
Rate Base
WACC
Operations and maintenance expense
Depreciation & amortization expense
Tax expense
+ Prior year-end
- Current year projected
- Accumulated
+ Average
Plant in-service
Accumulated depreciation & amortization
Deferred income taxes
Working capital
+ Prior year-end
+ Prior year-end
+ Prior year-end
Prior year-end actuals
11.20%
Capital structure
ROE for Transcos
= Annual Transmission Revenue Requirement (ATRR) for collection during Rate Year (July of current year to June of following year)
PJM* SPP**
* Previously adopted forward-looking mechanism ** Subject to change pending 205 application outcome
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FERC 205 & 206 FILINGS
• 206 complaint against AEP East companies filed in October 2016
• AEP filed a 205 application in November 2016 for a modified formula rate that seeks to mitigate regulatory lag
• FERC accepted the proposed modifications effective January 1, 2017, subject to refund
• 206 complaint against AEP West companies in SPP filed in June 2017
• AEP filed a 205 application in October 2017 for a modified formula rate that seeks to mitigate regulatory lag
Transmission investment strategy unchanged
East
West
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ACTIVE JOINT VENTURE PROJECTS
* Transource Pennsylvania and Maryland: Pending settlement of a 9.9% base ROE will result in an authorized ROE of 10.4%. Non-active joint ventures and prospects excluded from the financial forecasts.
Project Name Location
Projected Complete
Date Owners (ownership %)
Total Estimated Project costs at
completion
Approved Return on Equity
Base RTO Project
Risk Total
ETT Texas (ERCOT) Ongoing BHE Texas Transco, LLC (50%), AEP
(50%) $3.1 billion 9.60% 0.00% 0.00% 9.60%
Prairie Wind Kansas 2014 Westar Energy(50%), ETA (50%) $158.1 million 10.80% 0.50% 1.50% 12.80%
Pioneer Indiana 2018 Duke Energy (50%), AEP (50%) $386 million 10.54% 0.50% 1.50% 12.54%
Transource-Iatan-Nashua Missouri 2015 AEP (86.5%), Great Plains Energy
(13.5%) $64 million 9.80% 0.50% 0.00% 10.30%
Transource-Nebraska-Sibley Missouri 2016 AEP (86.5%), Great Plains Energy
(13.5%) $248 million 9.80% 0.50% 1.00% 11.30%
Transource-WV West Virginia 2019 AEP (86.5%), Great Plains Energy
(13.5%) $67 million 10.00% 0.50% 0.00% 10.50%
Transource-PA& MD* Pennsylvania &
Maryland 2020 AEP (86.5%), Great Plains Energy
(13.5%) $225 million 9.90% 0.50% 0.00% 10.40%
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COMPETITIVE TRANSMISSION -
• The Iatan – Nashua 345 kV transmission line was placed in-service on April 8, 2015
• The Sibley – Nebraska City 345 kV line project was placed in-service on December 15, 2016
• In 2015, Transource was designated the Clendenin-Fort Walton Area Improvements
• The project is a ~25-mile 138kV line from AEP’s Thorofare Creek Station to FirstEnergy’s
Powell-Mountain-Goff Run 138 kV line with expected in-service date of June 1, 2019
• Material procurement expected to begin no later than Q4, 2017
Transource Missouri
Net CWIP/PPE Balance $312 million
YTD After-tax Net Income $9.3 million
Actual Capital Structure 45% debt
55% equity
Authorized ROE1 11.15%
1 Transource Missouri is authorized a 10.3% ROE for the Iatan-Nashua and a 11.3% ROE for Sibley-Nebraska City, resulting in a combined authorized ROE of 11.15%. 2 Transource West Virginia is authorized a base ROE of 10.0% with an approved 0.5% adder for RTO participation. 3 Figure in 2020 dollars. 4 Transource Pennsylvania and Maryland: Pending settlement of a 9.9% base will result in an authorized ROE of 10.4%.
Transource West Virginia
Total Estimated Project Size ~$67 million
YTD After-tax Net Income $0.3 million
Hypothetical Capital Structure 40% debt
60% equity
Authorized ROE2 10.5%
Transource Pennsylvania & Maryland
Total Estimated Project Size3 ~$225 million
Hypothetical Capital Structure 40% debt
60% equity
Authorized ROE4 10.4%
• On August 2, 2016, PJM Board approved a Transource project that will improve congestion in
the AEP-Dominion interface
• Independence Energy Connection’s PJM-approved project includes the construction of two
greenfield 230 kV lines (each in Pennsylvania and Maryland) and two greenfield 500/230 kV
substations (both in Pennsylvania)
• Approved incentives: Recovery of cost upon abandonment, pre-commercial costs/regulatory
asset, 100% CWIP in rate base during construction
• CPCN filings required to be submitted by June 1, 2018
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FERC Formula Rate Mechanism Example
COMPETITIVE TRANSMISSION -
+
Operating Expenses
Prior Year (Over)/Under
Recovery
+
=
Revenue Requirement
x
Rate Base
WACC
Transource benefits from a transparent, FERC-authorized, fully forward-looking formula rate mechanism, with a
true-up. This allows for Transource to minimize regulatory lag and ensure full and timely recovery of costs.
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GRID ASSURANCE EXECUTIVE SUMMARY
Company Overview
• Unregulated company that provides three cost-based services
• Optimize and purchase shared inventory of strategic spare transformers and circuit breakers
• Store and maintain equipment in a secure warehouse with transferrable warranty
• Provide logistics to facilitate equipment delivery from warehouse to impacted location
Status • Company launched May 6, 2016
• LLC execution and commencement of active marketing
• Staffed key positions – CEO, COO, Regulatory, Finance
• Developed technical specifications & operational plans – Transformer RFQ October 2017
• Acceptance/Transition Date (Subscriber and equity owner commitment) – expected December 2017
• Developing nominated quantities – 10-12 companies including founding members
• Initial commitments to nominated quantities and cost – December 2017
• Critical mass – Firm interest among core customers, critical mass expected by year end 2017
• Initial Fee Commencement Date (Inventory in warehouse) – expected April 2019
Recent severe weather phenomenon bolster support for grid security and resiliency
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GRID ASSURANCE TIMELINE
The Grid Assurance operational timeline obtains the appropriate approvals and commitments
prior to spending capital for inventory and equipment
Subscriber & Equity Investor Commitments with State
Commission Approval
Building & Equipment
Acquisition
Ongoing
Operations
2017 2018 2019 2016 2019+
Acceptance/Transition
Date (Subscriber
Commitment) 12/2017
Initial Fee
Commencement
Date (Go-Live Date) 4/2019
Company Launch 5/2016
Technical specification, warehouse and operational
plan development
Administrative, Technical and Marketing Activities
Additional Subscriptions Critical Mass Subscriptions
Equity Contributions
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BOLD STRATEGY
• Awards – Technical and Aesthetic:
• 2017 EEI Edison Award Winner – “The BOLD technology is a transformational line design for the electric power industry,
increasing efficiency and reliability.”
• 2017 CIGRE/KEPCO International Tower Design Award Grand Prize Winner – BOLD was recognized as the top design of
26 competitors for its practical and environmentally friendly design, blending both performance with aesthetics.
• Recent Energized AEP Projects:
• Robison Park – Sorenson (Fort Wayne, IN); 22 miles, double-circuit 345kV (3-conductor) and 138kV (2-conductor), tubular
structures; energized November 2016
• Meadow Lake – Reynolds (Lafayette, IN); 9 miles, double-circuit 345kV (3-conductor),
lattice structures; energized July 2017
BOLD – “Breakthrough Overhead Line Design” – is a patented compact transmission line design
developed by AEP that delivers more capacity and more efficiency in a smaller and more
aesthetically pleasing low-profile structure
• International Patents granted by European Patent Office and registered in
17 European countries
• Strategic Objectives – Build business through IP licensing fees to utilities
within the U.S. and beyond (as opportunities present themselves).
• In 2017, BOLD was awarded a continuation patent to expand elements of the
original filing, thereby increasing coverage and expanding market opportunities
• License Structure – Two license model:
• Standards License – marketed to both small group of select top-tier engineering
firms
• Use License – marketed to transmission line owners deploying BOLD on a $/line
mile basis for use on greenfield and rebuild projects
®
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EVOLUTION OF TRANSMISSION TRACKERS IN THE OPERATING COMPANIES
Base Rates
Trackers
PJM Trackers
Base Rates
Trackers
SPP Trackers
Base Rates
Trackers
ERCOT Trackers
2005 2010 2017
2005 2010 2017
2005 2010 2017
17%
83% 75%
25%
89%
11%
26%
74%
38%
62% 68%
32%
100% 100% 100%
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FAVORABLE RECOVERY OF TRANSMISSION INVESTMENT Jurisdictional Capital Investment Recovery Mechanism
• Projected $9.5 Billion of 2017 Net Plant in Service is recoverable through Trackers and from Wholesale Customers
• Projected $1.2 Billion of 2017 Net Plant in Service is recoverable through Base Rates
2017 Capital – Projected Recovery by RTO
2017 Recoverable Plant in Service ($M)
• Projected $991 Million of 2017 PJM and SPP Expenses will be recovered through Trackers
• Projected $325 Million of 2017 PJM and SPP Expenses must be recovered through either existing or future Base Rates
Projected 2017 OATT Expense ($M)
Jurisdictional Trackers provide most efficient recovery of Transmission Investment
Note: Investment based on 2017 formula rate filings
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CONTRACTED RENEWABLES
& OTHER
• Organizational Structure
• Contracted Renewables
• Competitive Generation – Owned & PPA
• Competitive 2016 Fleet Statistics
• Retail - AEP Energy
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AEP
AEP Energy Supply
AEP Generation Resources
AEP Energy Partners
AEP Energy AEP OnSite
Partners AEP Renewables
COMPETITIVE OPERATIONS
ORGANIZATIONAL STRUCTURE
Generation Wholesale Trading
& Marketing
Oklaunion PPA
Wind Operations
Retail Customer
Solutions
Business
Focused on
Assets Backed
with Long-Term
PPAs
Universal Scale
Renewable Assets
with Long-Term
PPAs
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CONTRACTED RENEWABLES
$1B CAPITAL ALLOCATED 2017-2019
Renewable Generation
Asset Owner
“Behind-the-Meter”
Energy Assets
Universal Scale
Energy Assets
Key Customers Schools, Cities, Hospitals and
Commercial / Industrial Accounts
Utilities, Municipalities,
Corporations and Cooperative
Accounts
Key Technologies
Distributed Generation,
Renewables, Storage,
Substations and Combined Heat
and Power
Wind and Solar
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CONTRACTED RENEWABLES
Letchworth School District, New York | 1.6 MW
• Committed to nearly
$200 million in energy
assets
• 21 operating projects in
9 different states (OH,
HI, NY, NH, VT, MN, CA,
NJ and FL)
• Operating projects
include customer sited
solar projects, behind
the meter energy
storage assets and a
customer sited
substation
• 15 more customer sited
solar projects are under
construction in 8
different states (CA,
CO, MN, NJ, NM,
NY, OH and TX)
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CONTRACTED RENEWABLES
Pavant Solar III (UT)
Boulder Solar II (NV)
• 20 MW solar project near Delta, Utah
• Output fully contracted with PacifiCorp under 20 year PPA
• COD on December 30, 2016
• Constructed by JSI Construction
• 50 MW solar project near Boulder City, Nevada
• Output fully contracted with NV Energy under 20 year PPA
• COD on January 27, 2017
• Constructed by SunPower
Jacumba Solar (CA)
• 20 MW solar project near Jacumba, California
• Output fully contracted with Southern California Edison under a 20 year PPA
• COD on July 25, 2017
• Constructed by BayWa and Swinerton Builders
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COMPETITIVE GENERATION – OWNED & PPA
Plant Name State Fuel Type Owned
Coal
Owned
Hydro
Owned
Wind
Owned
Solar
Owned
Net Maximum
Capacity (MW)
Cardinal 1 OH Steam - Coal 595 595
Conesville 4* OH Steam - Coal 651 651
Conesville 5 & 6 OH Steam - Coal 810 810
Stuart 1-4** OH Steam - Coal 603 603
Racine OH Hydro 48 48
Trent Mesa Wind TX Wind 150 150
Desert Sky Wind TX Wind 161 161
AEP Renewables Solar 90 90
AEP Onsite Partners Solar 26 26
Total Owned 2,659 48 311 116 3,134
PPA Resource State Fuel Type PPA
Coal
PPA
Wind
Total PPA
Capacity (MW)
Oklaunion*** TX Steam - Coal 355 355
Southwest Mesa TX Wind 177 177
Total PPA 355 177 532
Coal Hydro Wind Solar Total
Capacity (MW)
Total Owned & PPA 3,014 48 488 116 3,666
*
**
***
Represents AEP’s capacity portion of jointly owned unit, operated by AEP.
Represents AEP’s capacity portion of jointly owned unit, operated by non-affiliate; Unit 1 representing 150 MW was deactivated as of
September 30, 2017.
Represents capacity owned by AEP Texas North, operated by PSO. Competitive has PPA with AEP Texas North.
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Plant / Unit Fuel Type Delivery
FGD
Reagent
2016 FOB
Plant $/Ton
2016
$/MMBtu
2016
MWh
Produced
2016
Capacity
Factor
Cardinal 1 NAPP Barge & Truck Limestone 50.29 2.01 3,545,219 67.83%
Conesville 4* NAPP Rail & Truck Limestone 66.21 2.82 1,115,562 37.43%
Conesville 5 & 6 NAPP Rail & Truck Lime/Limestone 55.03 2.35 1,952,025 27.44%
Zimmer* NAPP 30%, ILB 70% Barge Limestone 53.15 2.20 1,327,340 45.79%
Stuart 1-4** NAPP 30%, ILB 70% Barge Limestone 45.67 1.93 2,800,168 53.13%
Oklaunion Powder River Basin Rail Limestone 34.92 2.15 1,381,779 44.31%
Racine Hydro n/a n/a 179,844 42.65%
12,301,937
COMPETITIVE 2016 FLEET STATISTICS
* Exchanged Zimmer Plant with Dynegy for an additional 312 MW of Conesville 4 in the second quarter of 2017.
** Plant scheduled to retire in the second quarter of 2018.
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Geography of customers* Customer Accounts*
Delivered Load*
RETAIL – AEP ENERGY
C&I 11%
Residential 89%
C&I 77%
Residential 23%
• Approximately 402,000 retail customer accounts
(including approximately 68,000 retail gas accounts)*
• YTD served 11.6 TWh of load*
• Seven states, focus on Ohio
* As of September 30, 2017
Ohio 72.3%
Illinois 14.7%
Pennsylvania 11.1%
New Jersey 0.9%
Maryland 0.8% Delaware 0.1% Washington DC
0.1%