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Regulators approve next phase of AEP Ohio smart grid plan

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Regulators approve next phase of AEP Ohio smart grid plan

AEP Ohio has received regulatory approval to roll out the delayed second phase of its smart grid program, unveiled more than three years ago.

The Public Utilities Commission of Ohio on Feb. 1 approved the American Electric Power Co. Inc. utility's gridSMART Phase 2 project. AEP Ohio, the trade name of Ohio Power Co., filed a plan in September 2013 to expand its gridSMART project to more communities.

Under the second phase of the program approved by PUCO, the company will install advanced metering infrastructure for approximately 894,000 customers; use distribution automation circuit reconfiguration, or DACR, technology to improve the reliability of 250 circuits by reducing the extent and duration of outages; and improve 160 distribution circuits through volt var optimization, or VVO, which is designed to reduce "excessive voltage levels on the distribution grid."

"The PUCO is excited to see this project move forward," PUCO Chairman Asim Haque said in a news release. "AEP Ohio's smart grid deployment will lead to significant customer benefits including increased reliability, efficiency and market enhancements."

The second phase of the smart grid program was seemingly on hold until AEP Ohio filed a settlement with PUCO in December 2015 tied to its now-modified generation subsidy. As part of this agreement, approved by PUCO in March 2016, the utility agreed to deploy 160 circuits of VVO technology with costs to be recovered under the gridSmart Phase II rider with no shared savings or incentive ROE. AEP Ohio also agreed to advance its energy efficiency and peak demand charge plan in order to achieve an energy savings goal of 1.33% annually and a demand reduction goal of 0.75% annually by the end of the 2017-2019 planning period.

The settlement in the smart grid expansion filed in April 2016 allows AEP Ohio to move forward with the deployment of AMI meters and DACR while it finalizes engineering feasibility and selection studies geared toward maximum customer and company benefits. In addition, AEP Ohio must work to develop technology to provide customers and competitive retail electric service providers with interval energy data.

The deployment of the AMI meters is expected to take four years, with the DACR and VVO deployment expected to take six years.

"The PUCO will perform an annual audit to ensure operational savings related to gridSMART upgrades are credited to the overall program costs," the commission said in its news release.

In addition, PUCO authorized AEP Ohio to implement a one-time charge of $43 and a monthly charge of $24 for customers who opt out of AMI installation.

The Office of the Ohio Consumers' Counsel did not sign on to the smart grid expansion agreement, but later dropped its opposition as part of a separate global settlement. (PUCO dockets 13-1939-EL-RDR, 14-1158-EL-ATA)