Equipment Condition, Liability Assessment

1. Equipment Condition, Liability Assessment

2. DISCUSSION TOPICS • Equipment Condition • Liability Assessment • Long – term Planning & Equipment Recommendations • Facility Health Report • Summary • Questions

3. EQUIPMENT CONDITION Develop Strategy for Determining Equipment Condition • Focus on Critical Equipment Examples: Turbines, Boilers, Critical Piping Systems, Feedwater Heaters, Condensers, Cooling Towers, Boiler Feedwater Pumps, Electrical Transformers, Precipitators, Circulating Water Pumps • Beneficial to Evaluate Equipment Condition on a Fleet-wide Basis for Consistency of Evaluation • Equipment Condition Evaluation to Consider Numerous Factors Examples: Age, Design, Performance, Operation & Maintenance History, Heat Rate Impact, Expected Life

4. LIABILITY ASSESSMENT Conduct Liability Assessment Based on Equipment Condition Evaluation • Create Long-term (10+ Years) Equipment Recommendations for Critical Equipment • Recommendations include Predictive Maintenance Programs, Preventative Maintenance Programs, Specific Repair Program or possible Equipment Replacement • Critical Equipment Condition Liability Assessment Recommendations evaluated by respective Plant and integrated into their Long-term Planning & Budgeting

5. LIABILITY ASSESSMENT

6. LIABILITY ASSESSMENT

7. FACILITY HEALTH REPORT • Facility Health Report (FHR) provides a Comprehensive Overview for all AEP Coal-fired Units for Critical Equipment Liabilities and Recommendations for Liability Remedy • Identifies Current and Projected Equipment Condition, Degree of Liability and related Unit Outage Probability over a 10+ Year Timeframe

8. FACILITY HEALTH REPORT (…continued) • Liability Remedy Projection includes and considers Major Projects and Scheduled Unit Outages • Developed in Spreadsheet and segregated by Critical Systems and Equipment • Equipment Condition is Assigned a Liability Rating using Three (3) Colors (Red, Yellow or Green). Major Planned Unit Outage Years are also identified as an Orange Color • Color Definitions: Red – High Outage Probability, Yellow – Moderate Outage Probability and Green – Low Outage Probability

9. FACILITY HEALTH REPORT (…continued) • Information Developed Collectively by Corporate Engineering Equipment Groups, Regional Engineering and Plants • Liability Remedy Projection includes and considers Major Projects and Scheduled Unit Outages • Developed in Spreadsheet and segregated by Critical Systems and Equipment

10. FACILITY HEALTH REPORT • Spreadsheet on Generating Unit basis:Example 600 Mw Super-critical Coal-fired Unit)

11. FACILITY HEALTH REPORT

12. FACILITY HEALTH REPORT (…continued) • Intended to be Useful Reference Guide for Respective plant to prepare Long-term Budget Plan and Useful in Defining Unit Outage Duration to complete Major Projects • Additionally, intended to be Useful to Senior Management when considering Project Improvement Proposals as well as Long-term Budget and Planning

13. SUMMARY • Equipment Condition • Liability Assessment (including Long – term Planning & Equipment Recommendations) • Facility Health Report • Questions ??

14. CONCLUSION Thank You! Muskingum River Plant Unit 5