gridSMART® is provided by SWEPCO as part of the company’s commitment to reduce energy consumption and demand. CLEAResult administers SWEPCO’s Texas gridSMART initiative as an independent consultant.

2013 Hard-to-Reach

Standard Offer Program

October 9, 2012

2

Where in Texas?

AEP is offering the Hard-to-Reach Standard Offer Program (HTR SOP) through its Texas distribution companies which include AEP Texas Central Company (TCC), AEP Texas North Company (TNC) and Southwestern Electric Power Company (SWEPCO)

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HTR Successes

0

500

1000

1500

2000

2500

3000

3500

4000

4500

TCC TNC SWEPCO

2010

2011

2012

2012 YTD

– TCC – 1,947 Customers Served; 4,787 total installations

– TNC - 365 Customers Served; 800 total installations

– SWEPCO – 982 Customers Served; 2,423 total installations

Lower Budgets in 2012 impact # of Customers Served 2012 numbers are from incentive reports processed/paid through October 3, 2012.

4

HTR Successes (continued)

TCC:

8 Counties traditionally Underserved experienced

measure installations in 2012

HTR Goal met 3 weeks following opening of Program in

2012

TNC:

25% of program savings achieved in traditionally

Underserved Counties in 2012

SWEPCO:

6 Counties traditionally Underserved experienced

measure installations in 2012

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2013 HTR SOP Summary

Incentives Paid for kW and kWh savings

Internet Application and Reporting

HCA, Income Eligibility Form and Customer

Education Material

Small Projects No minimum project size

Reserve funds for 30 days

Multi-Family Reserve up to $ 25,000 at a time

Single-Family Reserve up to $5,000 at a time

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2013 KEY CHANGES

Underserved Counties for TNC and SWEPCO have been revised, listed in 2013 HTR Manual

Underserved Measures have been reinstated for 2013

Deemed Savings have been revised for 2013

Work schedules required for Project Sponsors completing Duct Efficiency and Infiltration measures in Single Family projects

Incentive Reports may no longer be submitted the 1st 15 days of each month

All installations must be submitted on an Incentive Report within 45 days of the installation

All host customers must be supplied approved customer education material

Changes to the Host Customer Agreement and Acknowledgement Form to include all Pre and Post CFM readings for Duct Efficiency and Air Infiltration measures and “R” Value of Existing Ceiling Insulation.

Residential dwellings or additions built (completed) after January 1, 2011 do not qualify for the Program

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2013 KEY CHANGES (continued)

CFL measure not allowed in SWEPCO Hard-to-Reach

All ceiling insulation installations must affirm that an insulation installation certificate was permanently affixed near the attic opening

An updated duct tool spreadsheet has been added to the database

Failure to complete prescriptive requirements will result in a total Measure failure regardless of the CFM reading

Homes cooled with window air conditioning units exclusively must be reported as “gas” heat. Electric space heaters are considered “plug-in” load and do not make the home eligible for electric heating type in this program (Air Infiltration and Ceiling Insulation measures)

The Air Infiltration Deemed Savings were revised January 2012 to include an upper limit of 4 CFM50 per square foot of house floor area pre-retrofit infiltration rate and this limit will be enforced

All use of marketing, including social media, must be approved by AEP

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HTR SOP INCENTIVE BUDGETS

Budget Limit per PS

TCC $ 953,417 $ 75,000

TNC $ 162,719 $ 30,000

SWEPCO $ 715,772 $100,000

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How Do I Participate?

Review Program Manual

Review SOP Agreement

Complete and review on-line application

Submit application via internet

If applicable, send testing procedures within 24 hours of

submitting application

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What Happens Next?

Applications will be reviewed based on receipt of all

required information

Once eligibility has been verified and application

pre-approved, enter into a agreement with AEP to

install eligible Measures

Refer to Program Manual for additional information

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Project Sponsor Requirements

A Project Sponsor must have:

Adequate insurance (mailed or e-mailed directly to

appropriate Program Administrator by insurance agency)

All appropriate licenses

References

Evidence of technical and managerial capabilities and

experience

AEP approved customer education material to be

distributed to all host customers

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Incentive Payments & Example

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Incentive Payment Structure

Four levels, to encourage Project Sponsors: Installing Standard Single-Family dwelling Measures

Installing Standard Multi-Family dwelling Measures

Installing historically Underserved Measures

Installing Measures in certain historically Underserved Counties

kW kWh

Standard Single-Family $360 $0.11

Standard Multi-Family $325 $0.10

Underserved Measures $400 $0.13

Underserved Counties $440 $0.15

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Underserved Counties - TCC

ATASCOSA EDWARDS KINNEY UVALDE

BEE FRIO LA SALLE VAL VERDE

BROOKS GOLIAD LIVE OAK WHARTON

CALDWELL GONZALES MAVERICK WILSON

COLORADO GUADALUPE MCMULLEN ZAPATA

DE WITT JACKSON MEDINA ZAVALA

DIMMIT JIM WELLS REAL

DUVAL KENEDY REFUGIO

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Underserved Counties - TNC

BRISCOE FOARD KNOX

CALLAHAN HALL MOTLEY

CHILDRESS HARDEMAN NOLAN

COTTLE HASKELL SHACKELFORD

DICKENS JONES STONEWALL

EASTLAND KENT THROCKMORTON

FISHER KING WILBARGER

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Underserved Counties - SWEPCO

CHILDRESS DONLEY FRANKLIN

HOPKINS RED RIVER SHELBY

SMITH

VAN ZANDT

WHEELER

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Incentive Payment Example

Install Measures resulting in savings of:

30 kW 75,000 kWh

Incentive Payment:

$360/kW $0.11/kWh

Total Incentive:

$19,050 (before any limits)

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Incentive Payment Limits

Load Factor Caps:

For all combined kW and kWh incentive

payments, incentive is limited to:

$920 per kW

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Application Process

20

Create Application

Register on Program website

Complete Project Sponsor Details

Sponsor Profile

Subcontractor Information

Project Description

Qualification Documents

Insurance Information

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Application Schedule

1st Day to register

October 18, 2012

Submit applications

December 4, 2012

Implementation begins

February 5, 2013

Must have approved application status

Must have 2013 HCA’s

Must have a budget reservation

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Multi-Family Projects

Site

Measures

Work Schedule

Duct Description

Individually-metered

$25,000 Budget Reservation

Program Administrator can increase reservations for

completion of project per funding availability

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Identify Project Opportunities

Verify customer eligibility

Original customer signature and date on

Income Eligibility Form

Original customer signature and date on Host

Customer Agreement & Acknowledgement

(HCA) form

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Install Measures

Reserve funds via internet

Install Measures

Original customer signature and date HCA form to verify completion

If applicable, supply pre and post CFM readings and “R” Value of Existing Ceiling Insulation on HCA.

Provide customer with Approved Educational Materials

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Reporting

Monthly reporting via internet

Inaccurate reporting results in failures

Un-submitted Measure installations over 45

days old will lock out reservations feature

AEP will process inspection-adjusted Incentive

Reports within 45 days under normal

circumstances

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Installation Inspections

Random sample of Measure installations

Verify that number of installed Measures equals number of reported Measures

Verify Measure is installed and capable of performing its intended function (10 yr measure life expectancy)

Verify that Measures qualify and that installation standards were followed

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2012 Program Issues

Inaccurate pre assessments, i.e. incorrect levels of existing ceiling insulation reported

HCA’s and Installations done prior to application approval

Submitting incomplete HCA forms

Failure to complete daily work schedule

Multi-Family/Single-Family reservations (only one open at a time)

Use of unapproved marketing material. All marketing material must be approved, including social media

Failure to report measure installation within 45 days of the installation date

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2012 Program Issues (continued)

Customer educational material not being supplied

Must inform customer of inspection possibility Provide best daytime contact phone #’s

Measures installed should provide an expected life of at least 10 yrs with the exception of CFLs. The following are deemed unacceptable

Taping attic access doors and filter access panels

Plumbing penetrations not covered effectively or with non-rigid material

Supply registers not removed to be sealed nor serviced from attic space

Caulking reported but not found in rooms specified (door frames, baseboards, windows)

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Program Website

Refer to www.aepHTRsop.com for:

SOP schedule

Latest program announcements

Available funding

FAQ’s

Program Manual

Program contact information

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AEP Contact Information

TCC – Vee Strauss

Phone: 361.574.2252

E-mail: svstrauss@aep.com

TNC – Steve Mutiso

Phone: 325.674.7287

E-mail: smmutiso@aep.com

SWEPCO – Jeff Thigpen

Phone: 318.673.3372

E-mail: jdthigpen@aep.com

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Comments and Questions