AEP Sustainability - Energy Management

Traditional Programs

Over the years, AEP has provided a broad array of traditional energy efficiency and demand response programs for customers. We have excelled in meeting the requirements and expectations of legislators and regulators, worked cooperatively with a variety of interested stakeholders, and delivered exceptional results for our customers and environmental benefits.

The same objectives of these traditional programs remain as relevant today as they’ve always been – helping customers save money, reducing environmental impacts, and optimizing the use of the grid. Only now, there are boundless new technologies and customer engagement options in how we manage energy. Electric vehicles, voice-enabled home energy management apps, and high-tech industrial technologies are just a few of the many ways we can work with our customers to achieve even better results.

We view energy efficiency as a readily deployable, competitively priced and clean energy resource that provides many benefits to our customers and the environment. Today, AEP offers customers more than 120 programs across nearly all of our 11-state service territory. In 2018, AEP’s energy efficiency programs were credited with more than 1 million megawatt hours (MWh) of energy reduction and more than 270 megawatts (MW) of demand reduction.

For the period 2008 through 2018, these programs have cumulatively reduced annual consumption by over 8 million MWh and peak demand by approximately 2,555 MW.

In 2018, the U.S. Environmental Protection Agency announced its annual ENERGY STAR® awards for businesses and organizations that have made outstanding contributions to protecting the environment through superior energy efficiency achievements. AEP Ohio was recognized as ENERGY STAR Partner of the Year – Sustained Excellence winner. Southwestern Electric Power Company (SWEPCO) was recognized as an ENERGY STAR Partner of the Year for its program in Arkansas. Public Service Company of Oklahoma (PSO) received the ENERGY STAR Partner of the Year – Energy Efficiency Program Delivery award.

In 2019, the American Council for an Energy Efficient Economy (ACEEE) recognized SWEPCO for having one of the nation’s outstanding energy efficiency programs. In a national review, ACEEE selected SWEPCO’s Arkansas Home Performance with ENERGY STAR program to receive an Exemplary Program Award based on its effectiveness and innovation in helping residential customers achieve greater levels of energy efficiency.

The AEP Ohio Energy Efficiency Marketplace is a one-stop shop for our customers to save energy, money and time. The marketplace analyzes data on more than 50,000 energy-efficient products, such as appliances, televisions, smart thermostats and water heaters. Customers can go online and find prices, consumer ratings, energy efficiency ratings and product details in one convenient spot to help them find the most efficient products at the lowest prices.

Appalachian Power’s new TakeCharge energy efficiency programs in Virginia and West Virginia give customers more options for taking control of their energy use, costs and bills. In addition to the portfolio of programs the company has offered in both states, it recently received approval for two new programs in Virginia. The Bring Your Own Thermostat program allows residential customers with qualifying smart thermostats to earn incentives for allowing APCo to adjust their central air conditioning by a few degrees during peak summer demand periods. And the Small Business Direct Install Program helps small businesses with no-cost energy-saving upgrades, such as LED bulbs, showerheads, faucet aerators and more.

We have also taken measures to reduce energy consumption in AEP’s office buildings and service centers. We reduced our kilowatt-hour (kWh) usage, when normalized for weather, by 27 percent in 2018, compared to the 2007 baseline, in nearly 280 buildings. The dollar savings from the reduced energy consumption was approximately $6 million in cost savings in 2018. We achieved these energy consumption reductions mostly through equipment investments, such as new lighting, heating and cooling systems, along with employee education.

AEP recently received LEED certification for our transmission service center in Oklahoma and two service centers in Indiana, bringing the total number of AEP LEED-certified facilities to nine.

AEP’s demand response programs support the power grid by helping to reduce load in periods of peak demand, such as during heat waves and cold spells. Some programs include special rate structures that encourage our customers to reduce their energy consumption during these peak demand periods. For some customers, we have contracts that allow us to “interrupt” their power consumption during peak times in exchange for reduced rates.

Peak demand is the amount of power used at times of maximum power usage, and varies across our service territory. For example, Appalachian Power Company’s system peak generally occurs on winter weekday mornings, when electric heating and appliance usage are happening at the same time that commercial equipment and industrial machinery are ramping up for the workday. Public Service Company of Oklahoma’s system, on the other hand, typically peaks in the afternoon of a summer weekday, as people get home from work or school and increase their use of air conditioners and fans while the demand from commercial and industrial customers remains high.

Historically, as peak demand grows with the economy and population, new capacity would ultimately be needed. Today, AEP can reduce the need for building new power plants through the use of our demand response programs that are managed on the grid.

The successes of our energy efficiency and demand response programs in recent years has reduced overall electricity usage and demand requirements across the power grid. A significant amount of this improvement has come from programs such as our efficient lighting upgrades. In the past, we could provide incentives for our customers to upgrade their lighting from incandescent bulbs to compact fluorescent or LEDs. The cost of this incentive was fairly low, and the decrease in energy use was significant, resulting in a very cost-effective efficiency program. However, as lighting and other appliance standards increase, these low-cost options are dwindling.

The next generation of energy efficiency options includes relatively expensive and more involved customer decisions, such as improving home insulation or upgrading HVAC equipment. The incentives required to achieve these types of energy efficiency reductions are much higher, making them relatively less cost-effective. Even though AEP provides incentives to our customers for these upgrades, they are often prohibitively expensive for many of our customers.

AEP shares the concern that some legislators and regulators have expressed regarding the impact of increased rates resulting from these programs, especially among our low- and moderate-income customers. We have seen this concern raised by policymakers in several states across our service territory. For example, Kentucky regulators ordered Kentucky Power to suspend most of its energy efficiency programs in 2018 to address cost impacts to customers.

Home Energy Management

Our customers have access to an ever-increasing number of choices for home energy management, and they expect a personalized experience with their products and services. To be their preferred choice, we have to provide our customers with the relevant energy insights and tailored solutions they need to understand and control their energy use and bills. And we have to do it in a manner that is consistent with their lifestyle while simultaneously managing the system for the benefit of all customers.

Customer surveys show AEP’s residential customers want more timely and detailed information about their energy usage to manage their bills and reduce costs, with 58 percent saying they want personalized energy guidance from us. As 39 percent of customers already own a smart thermostat, we have an opportunity to add value by using the smart hardware already installed in our customers’ homes.

Home Energy Management (HEM) is a suite of integrated solutions from AEP that gives us the foundation to do all of these things. In 2018, personalized HEM information was available to customers in AEP Ohio, Public Service Company of Oklahoma (PSO) and Indiana Michigan Power (I&M).

IM Home, Indiana Michigan Power (I&M) Company’s innovative home energy management program, allows our customers to use a mobile app and a Wi-Fi-enabled thermostat to control their energy use at any time. The program can automatically pick the best time to cool the home, using the least amount of energy, according to the customer’s comfort preferences. The smart thermostat program gives customers year-round energy savings.

A feature of this program was the release in 2018 of our HEM voice-assisted app that works with Google Assistant and Amazon’s Alexa platforms. Through the app, customers can use voice commands to access their account or energy use information using either platform. The program is currently available only to I&M customers, but we are considering expansion across our service territory. Learn more in Customer Channels.

Residential customers of AEP Ohio who have smart meters can participate in a home energy management program that allows them to manage their energy use in real time. Through the It’s Your Power℠ program, customers can download an app that allows them to automate and control smart devices as well as receive real-time updates on the energy their home is using. Other benefits of the program include the ability to remotely adjust their thermostat, set a budget goal for electricity usage and pay their bill online.