AEP Texas

1
AEP Texas Who We Are and What We Do
2
American Electric Power
American Electric Power owns more than
36,000 megawatts of generating capacity in
the United States and is the nation's
largest electricity generator. AEP is also one of
the largest electric utilities in the United
States, with more than 5 million customers linked
to AEPs 11-state electricity transmission and
distribution grid.
3
Continuing Confusion over Choice

• Even though retail electric choice was introduced
  over four years ago (January 2002), there still
  is confusion about who AEP Texas is and its role
  in the retail market.
• This identity crisis is made worse by confusion
  following the sale of CPL Retail Energy and WTU
  Retail Energy.

4
Unbundling
Separation of traditional investor-owned
utility into three separate functions
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Role of the Retail Electric Provider

• Sells electricity to the end-use customers.
• Bills the customers
• Orders connection of new service
• Orders disconnection of service for non-payment

6
Role of the Energy Delivery Company

• The energy delivery company, or Wires company
  delivers electricity over its powerlines to the
  end-use customers on behalf of Retail Electric
  Providers (REPs).
• The Wires Company also is responsible for
• Building new powerlines
• Restoring power following outages
• Reading electric meters
• Service connection and disconnection as ordered
  by the Retail Electric Provider (REP)

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Other Developments

• In December 2002, AEP sold CPL Retail Energy and
  WTU Retail Energy to Centrica plc.
• AEP also sold to Centrica the Central Power and
  Light and CPL name, as well as the West Texas
  Utilities and WTU name.
• AEP Texas delivers the electricity over its
  powerlines in both South Texas and West Texas.

8
AEP Operations in Texas

• Includes AEP Texas and SWEPCOs Texas
  operations
• AEP Texas includes Texas Central Company, which
  delivers electricity throughout the service
  territory of the former Central Power and Light
  Company, and Texas North Company, which deliver
  electricity throughout the service territory of
  the former West Texas Utilities Company.
• AEP and AEP Texas are no longer affiliated with
  CPL Retail Energy and WTU Retail Energy.

Texas North Company
SWEPCO Texas
Texas Central Company
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Questions about Fees or Services

• Please call our AEP Texas Customer Solutions
• Center if you have a question or concern about
• the following issues
• Fees such as those charged for a broken meter
  seal, denial of access to the meter or a service
  call fee
• Power Quality
• Construction
• Meter Installation
• Tree Trimming
• Outdoor Lighting
• Call the AEP Texas Toll-Free Number
• (1-877-373-4858) for the service issues shown
  above.

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When to Call Your REP

• Billing Issues
• Payment Arrangements
• Deposits
• Meter Checks
• Connecting Service with Existing Meter
• Final Bills and Disconnection of Service
• Service Reconnection after Disconnection for
  Non-payment of Bill

The phone number of your REP is located on your
electric bill. Note AEP Texas is no longer
affiliated with CPL Retail Energy or WTU Retail
Energy.
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To Report an Outage
To report a power outage, call AEP-Texas at
1-866-223-8508
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Power Factor Billing
January 31, 2006
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• Background
• The PUCT adopted Standard Terms Conditions that
  set a 95 power factor (PF) benchmark for
  consumers (Applies to all ERCOT TDSPS).
• ERCOT Protocol Section 5, requires all TDSPs to
  maintain a 97 PF.
• A significant cost in AEPs annual budget has
  been for correcting the system PF because AEP did
  not have the metering in place to enforce the PF
  provision on customers with low power factors
  (other than Transmission Service customers).

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5.5.5 Power Factor  If the Power Factor of
Retail Customer's load is found to be less than
95 lagging as measured at Retail Customer's
Meter, Company may require Retail Customer to
arrange for the installation of appropriate
equipment on Retail Customer's side of the Meter
necessary to maintain a Power Factor of not less
than 95 lagging as measured at Retail Customer's
Meter, or, at Retail Customer's option, to
reimburse Company for installing the necessary
equipment on Company's Delivery System. This
option applies only to customers with current
leased facility agreements. Until the proper
equipment has been installed to correct the Power
Factor problem, the Billing Demand associated
with Retail Customer's use of Delivery Service,
as calculated in the appropriate Rate Schedule in
Section 6.1, RATE SCHEDULES, may be adjusted
according to the following formula  Adjusted
Billing Demand (Billing Demand x .95)/Power
Factor
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• What is Power Factor?
• Power factor involves the relationship between
  two types of power Working Power and Reactive
  Power.
• Most loads in electrical distribution systems are
  inductive, which means that they require an
  electromagnetic field to operate.
• Inductive loads require two kinds of current
• Working Power performs actual work of
  creating heat, light, motion, etc.
• Reactive Power sustains the electromagnetic
  field.
• PF measures how effectively electrical power is
  being used.

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Examples of Electric Equipment and Their Power
Factor
Different types of electric equipment have
different Power Factors and consequently
different efficiencies and current requirements
Name of Equipment
Power Factor Percent
Lightly loaded induction motor
.20
Loaded induction motor
.80
Neon-lighting equipment
.30 - .70
1
Incandescent lamps
1
All types of resistance heating devices (e.g.
toaster, space heater)
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Power Triangle
Working Power (kW)
a
Reactive Power (kVAR)
b
c

• Real Power or Working Power (kW) - Measured
• Reactive Power (kVAR) - Measured
• Apparent Power (kVA) - Calculated

Apparent Power (kVA)
2
2
2
Pythagorean Theorem c a b
2
2
2
kVA kW kVAR
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Calculating Power Factor
kVAh kWh2 kVARh2
Average PF over month

Power Factor
kWh kVAh
Metered kW x 0.95 PF
kW billed
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Example 1 January 2006 Billing Monthly
meter readings 1,625 kW, 762,600 kWh,

846,600 kVARh 762,600 kWh2
846,600 kVARh2 kVAh kVAh 1,139,425
762,600 kWh PF 1,139,425 kVAh
66.9 1,625 KW x 0.95 .669
2,308 KW billed
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Why Enforce Power Factor?

• Places the cost burden more on those
  customers causing the problem rather than all
  rate payers.
• Improves system efficiency by reducing losses
• Enhances system operation and
  reliability.
• Increases system capacity capabilities.

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• Why only accounts over 700 kW?
• ERCOT Protocol required metering upgrade to IDR
  for accounts over 700 kW. AEP took advantage of
  the meter change-outs to install metering
  capable of making the measurements needed for
  PF.
• The 700 kW and above standard provides for a
  uniform, non-discriminatory application of the
  policy.
• Correcting the PF on larger accounts will result
  in a more noticeable improvement in the system
  PF.
• Technology is more readily available for
  correcting the PF of larger loads.

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• AEPs Approach to Enforcement
• Accounts will be assessed using monthly average
  PF rather than its coincidental on-peak PF.
  Generally, the average PF is slightly more
  forgiving, but the resulting adjustment to the
  customers billing demand still sends the proper
  pricing signal to motivate the customer to take
  corrective action.
• Initiate communication of AEPs intent to
  implement PF enforcement with affected market
  participants starting in July 2005.
• Provide interim communications between July 2005
  and the initiation of the enforcement to the
  affected market participants.
• Begin enforcement with the January 2006 billing.

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Power Factor Correction

• Minimize operation of idling or lightly loaded
  motors.
• Replace standard motors as they burnout with
  energy efficient motors sized correctly.
• Install capacitors in the circuit .

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Recommendations

• Work with a qualified electrical contractor or
  engineer to study your application.
• Different strategies of correction, static versus
  bulk.
• Inverters, variable speed drives, and solid state
  soft starters will affect design.
• Power factor can be affected by harmonics, which
  can only be addressed with filters.

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Open Discussion