Update:  This week, John Seryak, OMAEG consultant, participated in AEP-Ohio’s recurring energy efficiency collaborative meeting. The topics covered during the meeting included: 1) bidding energy efficiency capacity into PJM markets; 2) the volt var optimization program; 3) and AEP-Ohio’s third-quarter programing results. Below is a short outline regarding each of the topics covered.

AEP bidding into PJM:
• AEP has already bid into the PJM 2015-16 base residual auction (BRA).
• AEP is bidding 4 years into the future, so AEP only bids projects with at least a 5-year measure life.
• AEP bid in 204 MW – the efficiency programs result in permanent demand reduction, which is how they result in MW savings and not just MWh.
• Revenue from the PJM auction is $10.1 million; additional M&V costs are expected to be $1.3 million, with a net of $8.8 million.
• The $8.8 million net will flow in June 2015. We have until then to decide how that money is distributed across the rate-payer class.
• The BRA is followed by 3 incremental auctions. Consensus seems to be that the first two are worthless, but that the third could yield additional revenue.
• AEP will bid increasingly less efficiency resources into the coming years PJM markets, because their program approval period doesn’t overlap well with the 3-year forward bidding. AEP’s programs are approved through 2014.

Volt Var Program:
• AEP is piloting a “smart grid” program that optimizes voltage for its distribution circuits. Reduced voltage has shown up to 3% savings to the end-user in their pilot area. This is very important – this technology would be applied to AEP lines, but OMA members could see a 3% drop in energy consumption without doing anything.

AEP Program Results:
• AEP presented program savings through the third quarter, and preliminary ideas on this year’s objectives.
• AEP believes they will achieve their annual benchmark. Jon Williams suggested they’ll get about 115% of their annual benchmark, which is what they need to achieve to max out their shared savings. This is down from the previous years when they were almost doubling their annual benchmark.
• Where programs are underachieving, savings are being made up for in the residential CFL program. AEP is concerned that as CFLs reach market penetration, and as the amount of savings they can count is reduced, that they will have difficulty meeting their annual benchmark. AEP is specifically concerned with meeting their 2014 benchmark and beyond.