AEP Ohio’s Electric Security Plan

FAQS

Why is AEP Ohio filing an ESP application now?

Our current ESP expires in May 2024 and we need to get the new one in place to ensure a smooth transition. While we’ve already made significant improvements, more work needs to be done — and it must happen quickly as we plan for rapid economic growth, increased customer expectations and stronger storms that could impact the electric grid. The service we provide is essential and the investments we’ve outlined in our proposal will deliver benefits that better meet the needs of our customers.

What is the Electric Security Plan (ESP) application?

Our application is a comprehensive, $3.8 billion plan to enhance and upgrade service reliability, customer experience, customer communication and continued investments to support Ohio’s ongoing economic development.

What will this do to my electric bill?

If approved as filed, customers who use 1,000 kilowatt hours of electricity per month would see an average monthly increase of about 2% — or about $4 — each year of the ESP term.

When will the new rates take effect?

The new ESP rates will take effect on June 1, 2024, if approved.

Why is AEP Ohio trying to increase rates during a time of economic uncertainty?

Our current ESP expires next year and we need to get the new one in place to ensure a smooth transition. The ESP application is necessary to make key investments to enhance and upgrade service reliability, customer experience and customer communication.

The ESP supports programs and activities related to specific needs and projects we have identified.

What are you doing to improve reliability?

A primary focus of the ESP application is to improve service reliability. This is mainly accomplished through the investments in vegetation management and upgrades in the distribution system.

The planned investment in vegetation management will allow us to continue the four-year trim cycle for trees inside the right-of-way. In addition, the plan will help us reduce outages caused by trees outside the right-of-way, which in 2021 was the leading contributor to outages.

Key investments into the distribution system are necessary to replace aging infrastructure and support customer growth. This plan will allow us to invest at a rate to not just keep up with the degrading system to maintain reliability, but to improve on reliability.

How will this improve the resiliency of the grid?

This new ESP proposal includes expanding the use of technology that supports the modern electric grid and evolving customer expectations. More than 5,500 conductor miles and hundreds of pieces of aging equipment across Ohio would be upgraded, replaced or rebuilt before they reach the end of their expected life. We’ve also identified nearly 250 circuits where customers have experienced multiple outages and will focus additional efforts on making improvements to their service. New lines and substations will be built to meet the evolving needs of AEP Ohio customers while at the same time supporting bringing new businesses to the state to grow the economy.

In addition, a Community Resiliency Pilot program would test the use of a backup generator that could help supply power when large power lines are not able to bring power into an area.

Batteries would also be installed at substations to supply power while crews make repairs. These would help determine the best method to reduce the impact of outages in vulnerable rural and urban communities.

What is your rural broadband proposal?

Technology that makes the power grid smarter and more reliable plays a critical role in AEP Ohio’s plan. AEP Ohio’s fiber optic data network ensures that grid operators have access to the real-time information they need. AEP Ohio is proposing to offer internet providers in underserved or unserved areas access to its fiber optic network in order to provide broadband service. Any federal grants and payments from internet companies would be credited to AEP Ohio customers. These new and innovative proposals are being made in addition to continuing the distribution grid maintenance and upgrades that are necessary to meet the needs of AEP Ohio customers.

The plan includes six project areas where we plan to upgrade our fiber optic network for electric distribution purposes. These projects are located in counties with very limited broadband availability: Athens, Hocking, Jefferson, Meigs, Morgan, Perry, Vinton and Washington counties in Southeast Ohio and Allen County in Northwest Ohio.

What are you doing to improve communication?

The ESP application proposes a Reliability and Infrastructure Communication Plan (RICP). The RICP will focus on proactive communications to keep customers informed of infrastructure improvements and maintenance to improve reliability and reduce future outage events.

How have funds previously improved reliability?

Technology is helping us improve reliability and is providing customers with more information about their energy use. For example, we have installed more than 1 million smart meters, approved in our previous ESP, which allow our operators to manage the power grid more effectively.

What are you doing to ensure this increase is affordable for customers?

We have proposed a Senior Discount Program that would give qualifying customers 65 years of age or older a 50% discount off of their monthly customer charge. We estimate that more than one-third of customers over 65 would qualify for this $5 a month discount. If approved, the Residential Senior Citizen Tariff would be available upon request on June 1, 2024. Qualifying customers would just need to request the discount by contacting the Customer Call Center at 1-800-672-2231.

The ESP application also includes energy efficiency programs for residential, commercial and industrial customers designed to reduce overall energy use and save power during peak demand.

Reducing energy use for low-income customers not only lowers their bill, it helps decrease the energy demand placed on the grid. Through the proposed High Efficiency for Low Income Program, customers with incomes below 200% of the federal poverty level would qualify for assistance purchasing more efficient high-energy use products for their homes as well as making their home more efficient overall. The program would be administered through local agencies who can help customers figure out how to reduce their energy use.

Customers will be able to purchase discounted energy efficient products through an AEP Ohio Marketplace and there are also rebates for energy efficient heating and air conditioning equipment, as well as home insulation.

What are demand response programs?

Commercial and industrial customers will be able to participate in demand response programs where high-use equipment is turned off to help reduce the demand on the electric grid. The ESP would extend this program to residential customers who agree to install a switch on their electric water heater, air conditioner, EV charger or other equipment that could momentarily be turned off if needed to reduce demand. Customers would also receive educational materials and a customized report that would show them their high-use times and explain how they can reduce their energy use.

What do electric vehicles have to do with my power?

Our Electric Vehicle Charging Pilot Program approved in the previous ESP was so successful that we are proposing to further expand the program. We have helped local governments, businesses, and multifamily housing complexes install more than 350 charging stations.

Planning for the growth of EVs is critical and we are proposing to continue these same programs and provide expanded offerings to residential customers as well. Residential customers could apply for rebates for home charging equipment or electrical work in exchange for using equipment that would allow us to manage the flow of power to their charging equipment.

Customers can enroll in time-of-use rates, or managed charging. This helps avoid more costly upgrades to the distribution system by helping balance the flow of electricity.

What are the next steps?

Customers and consumer advocates have the opportunity to review the request and express their opinion. Then, the PUCO holds a hearing and reviews the request and all testimony submitted. Finally, after extensive review, the PUCO will issue its opinion and order approving or modifying the application, likely within the next year.