Electric Transmission Overview May 13, 2015

1. Tony Greve, Customer Services Engineer AEP Ohio Electric Transmission OverviewMay 13, 2015

2. American Electric Power – Service Territory AEP delivers electricity to more than 5.3 million customers across a 200,000 + square mile service territory. AEP is Headquartered in Columbus, Ohio 2

3. American Electric Power - Major Businesses Include • Regulated Utility Operations • Seven regional electric utilities, serving customers in 11 states. • Transmission • Strongest transmission network in the United States. • Power Generation • One of the nation’s largest, most efficient, and most innovative generation fleets. • AEP Energy Partners • Providing electric supply to customers in deregulated electricity markets. • River Operations • One of the nation’s largest barge companies, transporting coal and other cargo. 3

4. American Electric Power – Overview • AEP is one of the largest electric utilities in the United States • 38,000 MW of generating capacity • 39,000 miles of electric transmission lines • 221,000 miles of electric distribution lines • AEP is the largest owner of electric transmission in the United States • AEP’s transmission system supplies approximately 10% of the demand in the Eastern Interconnection (the transmission system that serves 38 states and eastern Canada) • Has more 765 kV extra high voltage transmission lines than all other United States transmission systems combined ~2,100 miles. • Eleven states served: Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia, West Virginia • AEP has a 100+ year history of providing low-cost, reliable transmission service to customers, and is at the forefront of technology development in the transmission industry 4

5. American Electric Power – Columbus Area Transmission The 765 kV and 345 kV backbone network can delivery power from a multitude of sources across the PJM region. Lower-voltage lines (both overhead and underground) feed into the city from multiple substations around the area. AEP’s transmission planning criteria requires additional safeguards for the reliability of major metropolitan areas (minimum N-2 reliability). As the largest city on the AEP system, the Columbus area can withstand multiple simultaneous outages on the transmission network with no loss of load. In addition to 5-year and 15-year studies performed in coordination with PJM, AEP Transmission Operations perform forward-looking seasonal assessments (e.g., pre-summer) to prepare for forecasted system conditions. Operating guidelines are developed for the upcoming season to provide guidance in managing the transmission system in anticipation of possible contingency outages. Columbus is served by one of the most robust transmission systems in the U.S., operated as part of the PJM Regional Transmission Organization (RTO). AEP is investing over $1.5 billion in Ohio’s transmission and distribution infrastructure between 2014 and 2016. 5

6. American Electric Power – Transmission Real Time Operations • AEP’s Transmission Operations Center (TOC) is located in the Columbus suburb of New Albany. • Transmission dispatch and control is directed for AEP’s eleven state area directly from the TOC. The building is staffed by NERC-certified system control operators and dispatchers. • In cooperation and coordination with PJM, AEP monitors and controls the transmission system on a real-time basis 24/7/365 via a robust Supervisory Control and Data Acquisition (SCADA) system, allowing for rapid load and system topology control. • The TOC houses a state-of-the-art state estimator system that monitors real system information and uses this information to run nearly a thousand contingency outage cases every four minutes to prepare for any possible system conditions. • Operators also perform “next day” analysis to anticipate and plan for system conditions the following day. • Operations Engineering is staffed on a 24/7 “on-call” basis to assist with real-time response to outages. Transmission Operations Center – New Albany, OH The LEED certified building is built to withstand an F4 tornado and has redundant systems and dual infrastructure backbone networks. 6

7. Regional Transmission Organization Map 7

8. PJM Map PJM is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia. 8

9. American Electric Power – Generation Retirements • Over 16 GW of generation retirements recently announced in the near-term • 7 GW retiring in the state of Ohio alone • AEP will retire nearly 6,600 megawatts of coal-fueled generating capacity in 2015 and 2016 due to environmental regulations and market conditions, and will increase its use of natural gas, renewables and energy efficiency resources. as part of this mass retirement. 9

10. American Electric Power – Generation Retirements • Over 16 GW of generation retirements recently announced in the near-term • 7 GW retiring in the state of Ohio alone • AEP will retire nearly 6,600 megawatts of coal-fueled generating capacity in 2015 and 2016 due to environmental regulations and market conditions, and will increase its use of natural gas, renewables and energy efficiency resources. as part of this mass retirement. 10

11. American Electric Power – Ohio Transmission Projects Vassell East Lima North Baltimore East Amsterdam - Miller SW Yager Nottingham * Muskingum - Natrium Holloway Marietta * Biers Run  Battelle * Tidd – Sunnyside, Asset Renewal * These project are T&D Reliability Projects. 3 2 4 5 6 1 8 7 12 9 10 11 11

12. American Electric Power – Vassell Station Construct Vassell Station, a new 765/345/138 kV Station near Sunbury, Ohio. • Tap the Kammer – Maliszewski 765 kV circuit and Hyatt – Corridor 345 kV circuit, Add a second circuit from Vassell to Corridor • Add 138 kV circuit from Vassell to Delaware • Add St. Clair 138 kV SVS System In-Service/Energized Date: 10/31/14, remainder in 2015. Project Cost: $212 Million. 345/138 kV Yard 765 kV Yard 12

13. American Electric Power – Transmission line miles 13

14. American Electric Power – Aging infrastructure Replacement of 25% of U.S. transmission facilities after 50, 60, 70, and 80-year lives Source: The Brattle Group, September 2013 14

15. United States Transmission Grid 15