6/3/2005
PSO Seeks Funding Boost For Reliability Enhancement

Public Service Company of Oklahoma (PSO) today filed an application with the Oklahoma Corporation Commission (OCC) to update the OCC on PSO’s Reliability Enhancement Plan and advise that an increase in the plan’s annual reliability spending cap is required for PSO to have sufficient funding to meet the four-year distribution tree-trimming cycle requirement included in the OCC’s service quality rules. PSO is requesting an increase in the annual cap from $11.81 million to $27.21 million to meet the four-year cycle trim requirement.
 
“We will exceed the current spending cap on our reliability enhancement program in the near future,” said Preston Kissman, vice president, Distribution Operations. “We have informed the OCC that either the cap must be increased before the end of August to permit us to continue the current level of effort, or PSO will need to massively reduce the number of tree crews from the 150 we expect to reach this summer to 27 by September, for the remainder of 2005.”
 
Under the current cap, the bill of a residential customer using 1,000 kilowatt-hours per month may be increased as much as $1.05 for the reliability enhancement program.  If approved, the requested increase in reliability funding would allow for adding up to a further $1.37 to the bills of residential customers using 1,000 kilowatt-hours per month.
 
Actual impact on customer bills varies from quarter to quarter depending on the amount and nature of reliability work that is performed. The reliability enhancement plan is set up on a “pay as you go” basis in which PSO submits actual tree work expenses each quarter for review by the OCC staff.  If the OCC staff is satisfied as to the appropriateness of the reliability spending, those costs are included in customer bills for recovery.  This ensures that PSO customers pay only for reliability enhancement work that has been performed.
 
PSO filed its Reliability Enhancement Plan in November 2004, seeking approximately $25 million in additional funding for distribution vegetation management annually.  (The requested amount was in addition to the $5.1 million PSO collects in base rates annually for tree trimming on distribution lines.)
 
In January, the OCC issued an interim order granting PSO $11.81 million--less than half of the amount PSO requested.  The interim order was made permanent May 2, in the OCC’s final order that approved the recent settlement in PSO’s rate review.
 
With the granting of additional reliability funding, PSO acted quickly to increase the number of tree crews from 50 statewide in October 2004 to 140 statewide by May (and increasing further to a planned 150 this summer).  This increase in resources enabled PSO to accelerate the pace with which it is clearing power lines of vegetation.
 
Tree work completed during the first four months of 2005 (62,611 trees trimmed or removed) amounts to 77% of the total work completed in all of 2004, when PSO trimmed or removed a total of 81,361 trees for the year.
 
On the power line circuits PSO has cleared, the gain in electric service reliability has been significant in terms of fewer tree- and animal-related outages*:
·         41% reduction in the number of such outages;
·         79% reduction in the number of customers   affected by such outages;
·         80% reduction in the number of customer outage minutes due to such outages.

(*Animal-related outages are included due to their close association with trees.)

“Every penny of added reliability funding we collect is spent to improve service reliability to our customers,” said Kissman.  “This increase in funding is necessary to meet our customers’ growing expectations for greater reliability.”
 
PSO, a unit of American Electric Power, is an electric utility company serving approximately 509,000 customers in eastern and southwestern Oklahoma. Based in Tulsa, PSO has more than 4,000 megawatts of generating capacity and offers some of the lowest energy prices in the US.

Ed Bettinger
Corporate Communications
918-599-2700

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