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AEP’S Indiana Michigan Power utility to deploy new metering, efficiency technologies in South Bend, Ind.


FORT WAYNE, Ind.– Approximately 10,000 South Bend, Ind. area customers of Indiana Michigan Power (I&M), a utility unit of American Electric Power (NYSE: AEP), will soon participate in a demonstration of new technologies designed to promote service reliability and help customers manage usage and save money.

Through a collaborative effort with the Indiana Utility Regulatory Commission (IURC) and the Indiana Office of Utility Consumer Counselor (OUCC), I&M will test the use of advanced metering and energy efficiency technologies in homes and businesses located west and northeast of downtown South Bend by the end of the year. The project will be the first deployment of “smart grid” technologies that AEP could implement in model cities across the company’s 11-state service territory.

The pilot is also part of an AEP initiative with General Electric (NYSE: GE) announced last October. AEP and GE Energy, a business unit of General Electric, will pursue the development, integration and deployment of advanced energy delivery infrastructure and metering technologies.

“These new technologies offer exciting potential and will benefit both our customers and our company,” said Michael G. Morris, AEP’s chairman, president and chief executive officer. “This pilot, and the deployments to follow, will provide customers with the tools to make wise energy decisions, giving them more control over how they use electricity and, ultimately, more control over their monthly bill. For AEP, the potential to reduce peak demand for electricity by helping customers understand the difference in value of our product at different times of day can delay or avoid the future need for expensive new generation.”

“I&M is very pleased that the IURC and the OUCC are closely involved with this project,” said Helen J. Murray, I&M president and chief operating officer. “We appreciate the foresight of these organizations as we explore how this technology will enable utilities, like I&M, to provide the tools that can help the residents of Indiana save energy, manage costs and conserve natural resources.”

Customers in the South Bend pilot project area will have their homes and businesses equipped with GE smart meters, which are digital meters connected to a two-way radio frequency communications network. Because the meter is in constant communication, a utility company can provide timely information back to the customer that he or she can use to modify consumption behavior. The information also empowers customers to make environmentally friendly decisions when using electricity. Service interruptions can be detected more quickly and restoration activities will be faster and more efficient because smart meters provide continuous grid status to the utility operators.

Smart meter technology will enable pilot project participants to voluntarily enroll in enhanced customer service programs such as:

* Time-of-use prices, where the cost of electricity is lower during off-peak periods and higher during times of peak use.
* Direct load control, a feature that allows automatic adjustments to central air conditioning units during periods of peak demand during summer months in exchange for price incentives on electric rates
* The ability to pre-pay for electricity service.

The project will include the first use of General Electric’s ENMAC system in the United States. ENMAC is a fully integrated, advanced network management system that automates the real-time management, monitoring and control of electrical distribution networks. Distribution automation is expected to lead to faster service restoration following outages and to improved power quality.

I&M will begin installing smart meters and other technologies in South Bend in October, with installations to be completed by the end of 2008. All systems will be in use by the second quarter of 2009 and will be evaluated for one year. The company will also work with homebuilders to install advanced energy controls in 50 new homes.

“First and foremost, we want to know how well these technologies work and how our customers use the additional capabilities to control their energy use,” Morris said. “But we also want to see how much interest there is in offerings like pre-paid accounts and direct load control, how much customer education is needed for the in-home displays associated with the pre-pay option, and how the distribution automation improves our ability to serve our customers.

“What we learn in the South Bend pilot will position us to better match our future programs and technology enhancements with the needs and interests of our customers,” Morris said.

I&M is collaborating with the OUCC for the South Bend pilot under an agreement reached last year. I&M and the OUCC worked collaboratively to define the scope of the program, select the technology, develop programs, design experimental tariffs, and will work together to measure the results.


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