We are moving forward to address issues in the US that many other countries have or will be facing:

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1 BOLDTM, an example of new advanced transmission technologies enabling cleaner, affordable and reliable electric generation to help meet global climate challenges Remarks by Wade Smith, Senior Vice President, Grid Development, American Electric Power Company at the United States Energy Association s Energy Supply Forum Technologies and Corporate Approaches to Implement the Paris Agreement, National Press Club, Washington, DC, October 7, My name is Wade Smith. I am the Senior Vice President in the American Electric Power Company responsible for Grid Development. I appreciate the United States Energy Association s invitation to share our thoughts on the role of advanced transmission technologies to enable lower carbon electricity to be generated and delivered to citizens and businesses around the world. American Electric Power (AEP) is one of the largest investor owned electric utilities in the United States, with $61 billion in total assets, 32 GW of owned generation and 5.4 million customers in 11 states from the Great Lakes to the Gulf of Mexico. We are the largest transmission owner in the country, with over 40,000 line miles of all voltage classes, and 5,500 substations, valued at $15 billion. We are the largest transmission construction services company in the nation, currently managing over 2,000 projects on the AEP System and more projects in our joint ventures in other parts of the country. We, like many US electric utility companies have been transitioning and

2 rebalancing our generating portfolio so next year our fuel capacity mix will be approximately 51% coal, 28% natural gas, 11% renewables, 6% nuclear and 5% energy efficiency and demand response. Transmission is helping us optimize generation technologies in the right mix, amount, time and place, and to integrate them to the benefit of our customers and to comply with environmental regulations. This integrated grid approach has already put AEP on a glide path of CO2 emission reductions since the year 2005 our emissions have been reduced 15%. We are moving forward to address issues in the US that many other countries have or will be facing: Concerns about costs and system reliability raised by regulators, policymakers, consumers and investors-- Aging infrastructure Crowded Rights of Way Corridors little room for expansion, little chance for new urban ROWs View shed acceptability aesthetics matter in rural and urban areas Increased demand for renewable-generated electricity driven by EPA CO2 emission reduction regulations, state renewable targets and customer demands, which will require transmission capacity expansion Increased industrial and commercial demand, and Increased cost of electricity driven by environmental public policies, generation shifts, technology costs.

3 AEP believes that technology enhances the value of electricity for our customers. A robust grid is a critical enabler of generation diversity, new energy storage and demand-side technologies with two way communication. Maintaining a reliable and resilient grid is critical to our economic and national security. To maximize the beneficial impact of new technologies, the best solutions for a particular application of competing technologies should be driven by their relative performance and cost. Advanced transmission technologies can help ensure that: Reliability is efficiently sustained and improved; The cleanest and most economical generators are accessible; System congestion is minimized; More renewables and cleaner baseload generation are reliably integrated; and Line losses and overall energy use are reduced. Our work, like other companies, is being driven by new lines for regional projects, local reliability plans, individual customer projects and an aging infrastructure that needs to be modernized through upgrades and/or replacements. The Edison Electric Institute estimates that approximately $100 billion was invested in U.S. transmission projects by its members between the years 2008 and 2014 and billions more will be needed due to changes in generation and to improve grid reliability by the year Approximately 50% of our planned projects would integrate renewable generation and 66%

4 would create more efficient circuits. With the fast-paced transformation our industry is undergoing, these plans could change. I recommend that you review a new report co-authored by AEP and ten other international electric utilities explaining how innovations in all of the electricity sector s technologies can support worldwide social development, economic productivity and environmental progress. Well over a hundred countries made CO2 reduction pledges in their Intended Nationally Determined Contributions submissions in advance of the Paris climate change meeting later this year. They will need to use electricity to replace the direct burning of fossil fuels in homes and businesses. Powering Innovation for a Sustainable Future An Electric Industry s Perspective describes engineering improvements underway and on the horizon for all electric generating, delivery, and end use technologies and financing and public policies that are needed to deploy them. The 11 members of the Global Sustainable Electricity Partnership generated and delivered 33% of the electricity used in the world last year with 60% of the capacity mix having no direct carbon emissions. This experience, and third party reviews of the report by experts around the world, including the Electric Power Research Institute in the United States, can hopefully encourage emerging economy and developing countries, the World Bank, and other financial institutions to integrate advanced technologies that are cleaner, secure, accessible, affordable, reliable, safe and efficient into local, national and international electricity systems. Countries may need to rely on all the innovative technologies to transform and build new systems in order to achieve their CO2 reduction pledges. You ll find the complete report at

5 Our newly invented Breakthrough Overhead Line Design (BOLDTM) technology illustrates how advanced technology can provide these benefits in the United States and all countries, including addressing climate change challenges in a cost effective manner. This transmission technology is specifically designed to work at U.S. transmission circuit voltages but can easily be adapted to any country s existing grid. New or upgraded transmission lines utilizing our BOLDTM technology at 230kV or 345kV move more electric power over greater distances more efficiently than traditional lines. Patent offices in the U.S. and other countries agree that BOLDTM is very innovative, because so far, BOLDTM has received 14 granted and pending patents. AEP is building this new technology in our Indiana service territory. We are awaiting regulatory approval to build it in Texas and want to share it with other project developers around the U.S. and the world. As you can see from the meeting handout and the picture on the screen, the lower profile single crescent shaped cross arm that supports the circuits has a graceful, sculptural quality that should appeal to communities near the lines. Communities should also be pleased that existing Rights-of- Way (ROW) can be re-purposed with BOLDTM as an upgrade or replacement for existing circuits. In addition, the ROW is potentially much narrower for a new circuit using BOLDTM compared to a ROW for a traditional circuit of similar voltage. Community acceptance of transmission lines is instrumental in siting lines in a timely manner and BOLDTM should earn their support. An especially important advantage of BOLDTM technology to states and countries that are planning to intensify and concentrate their

6 deployment of wind turbines is that BOLDTM addresses a very serious electrical issue caused by series capacitors in traditional lines. Historically, series compensation has been utilized to increase the transfer capability on traditional lines to boost performance. Series capacitors can create harmonic interference known as Subsynchronous Resonance which can interfere with and even damage turbine generation facilities. Series capacitors are also costly. BOLDTM was inspired in part by the harmonic distortion and interference caused by traditional circuits using series compensation connecting Texas wind turbines to the grid. BOLDTM s compact line design does not require series compensation and avoids the potential damage caused by harmonics. BOLDTM is a commercialized technology, after a three year development period including significant electric simulation studies and prototype testing independently conducted by the Electric Power Research Institute (EPRI). EPRI validated studies on the structural integrity and electrical engineering improvements. The chart in your handout and on the screen behind me shows the significant increased capacity (42% to 59%), line loss reduction (7% to 33%), magnetic field reduction (48% to 50%) and tower height (23% to 32%) reduction benefits of BOLDTM over traditional designs for only a modest cost premium (10% to 30%, depending on specific design and voltage) over the traditional design. Thus BOLDTM on a cost per MW or capacity value basis provides significant savings as compared to any other traditional line design. In addition the cost is expected to be lower in the future as with any new technology, when more lines are built and economies of scale are obtained for the BOLDTM line design.

7 BOLDTM is an example of an efficient and robust transmission solution representing the best available technology in overhead line design. There are over 125,000 miles of 345kV and 230kV transmission lines in operation across North America. BOLDTM a technology that is ready now to replace and upgrade thousands of these line miles that range in age from 55 to 85 years so that the investment of billions of dollars will yield a higher performing modernized grid. Thank you for letting me share our BOLDTM technology with you. You can learn more about BOLDTM at I d be pleased to answer your questions. END