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AEP Ohio's new president rooted in regulatory and financial experience


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AEP Ohio's new president rooted in regulatory and financial experience

onApril 11 announcedthe appointment of longtime company employee Julie Sloat as AEP Ohio's newpresident and COO.

Sloat, who has been servingin her current roleof AEP senior vice president and treasurer since 2013, will take the reins fromoutgoing AEPPresident and COO Pablo Vegas on May 2. She will oversee all aspects ofelectric service for AEP Ohio, the trade name of

Sloat began her extensivecareer at AEP on the trading floor in 1999 before moving into investorrelations and regulatory case management. S&P Global Market Intelligencerecently spoke with Sloat on how she is embracing her new role and lookingforward to helping the utility transition for the future. Thefollowing is an edited transcript of that conversation.

S&P Global MarketIntelligence: What are some of the key opportunities and perhaps challenges ofthis sort of transition from your perspective?

Julie Sloat: When I think about AEP Ohioand this opportunity for me, in particular, I just think I couldn't betransitioning to this role at a more exciting time. It's just a great time togo to AEP Ohio, given all the successes that we've had, to help to try to keepthat momentum going. And [it's] just a super exciting time in the sector. Oneof the things that I like about the utility business versus other sectors thatI've had the opportunity to work in is it's so dynamic. I wake up to the newsin the morning … and, I kid you not, virtually every day the first story I hearsomehow ties to our industry. Pick another industry where you can say that. So,it's a privilege.

Asfar as making any changes or having a real granular plan to share with you, Idon't have that yet. But I think what you can rest assured on is the fact thatwe'll continue to work from the premise that the product that we deliver to ourcustomers is a necessity for essentially all aspects of our lives and oureconomy. So, the strategies and action plans that we follow are going to beunderpinned by the fact that we need to have a very safe, reliable product thatfolks can afford.

Whatwe're going to hopefully do is focus on the unique needs of our customers andhow we can better manage what it is that their desires are. Trying to reallytake an effort or make an effort to be customer-facing and continue to work onthat Ohio regulatory compact, which includes working with all of ourstakeholders in the process. I think we've done a good job and have been veryproductive in that regard, so I'm hopeful that we can continue that momentum.

Do you plan to drive theutility to make more traditional investments, such as in transmissioninfrastructure, or do you believe distributed generation and renewable energyplay an important role in future investments?

Ithink that as we drive toward the utility of the future, you can expect to seeus continue to make investments in our core infrastructure, as well as taking athoughtful approach to investment in renewables, new technologies services —grid modernizationdefinitely falls under that umbrella. I would expect that we'll continue tomove forward in that regard.

What is something you've seenat AEP Ohio that works exceptionally well and what is something that you wouldpotentially like to improve upon going forward — whether it's a one-, five- or10-year process?

Iwouldn't say that this is a departure from anything we've done, but I alsothink there's always room for improvement, and that's safety. Safety, safety,safety. So, we have to make sure that the folks on our team and the public …we're going home and enjoying a product in as good a shape as we found it, andhopefully even in better shape. That has to happen. So, that's going tounderpin pretty much anything that we do.

We'vebeen able to be a little bit of a pioneer in being able to get cost-recoverymechanisms in place that allow us to continue to deliver power to our customers[through a distribution investment rider and the gridSMART project]. A littlebit of a departure has been the PPA. I know that that's not entirely put to bedyet. We just got an order and many folks, including ourselves, will berequesting rehearing because there were some modifications that we want to address associated withthat stipulation. But, we're pioneers in that regard. So, we'd love to continueto work with our stakeholders so that we continue to engage in these types ofactivities that ultimately help our customers.

Do you plan to be a vocalproponent or defender of the Ohio PPA plan as it and potentialcourt challenges? Or will you lean more on the parent company to handle thenews and developments that arise out of those challenges?

Ifully intend to be entirely engaged in the process. So, if you want to considerthat vocal, absolutely. We do work as a team here at AEP, but this is criticalnot only for the parent company — meaning it's a catalyst for our share price.It does impact our credit rating, hopefully in a positive way — but also, froman AEP Ohio perspective.

Thereason we were able to reach the stipulation is because of the incrediblebenefits that it offers to our service territory customers and otherstakeholders. I'm fully behind that and look forward to continuing thatmomentum.

Given your history ininvestor relations at AEP, how do you see that being beneficial to the rolethat you'll be moving into when it comes to positioning the company for successfor shareholders?

Ithink, from multiple aspects. Even in my current role as treasurer, I stillinteract a great deal with the investment community, as we finance our company.As a consequence, I had to stay abreast of what was going on in Ohio, so I feltlike I constantly had one foot in that activity anyway. I think that helps withmy transition into this role.

Icame also from the regulatory group. The interesting thing was we had beenworking on the various ESP structures and began to talk about this notion ofthe PPA when I was leaving regulatory to come to treasury. That feels veryfamiliar to me, so I think that is beneficial.

Ithink also to the extent that I am familiar with what it is that the folks whoown our bonds and our stocks are interested in and understand how AEP Ohio andits activities can be a catalyst or a benefit, or detracts from that, helps memake better decisions. That's why they rotate folks here at AEP into differentroles, is so that you can continue to grow but also call on those experiencesthat you've had to make it just a much more robust and holistic opportunity andultimately benefit all the stakeholders, whether it's the employees, thecustomer, the shareholder, the bondholder. It is a continuum and the idea is tobe able to strike at all of those.