American Electric Power (NYSE: AEP) is a major investor-owner electric utility in various parts of the United States. AEP ranks among the nation's largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation's largest electricity transmission system, a nearly 39,000-mile (63,000 km) network that includes 765 kilovolt ultra-high voltage transmission lines; more than all other U.S. transmission systems combined. AEP's transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP's utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia, West Virginia, and Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP's headquarters are in Columbus, Ohio.
American Electric Power was the first utility to utilize 345KV transmission lines which took place in 1953.
Distribution Strategy
AEP’s wholesale and trading group, ranked second among U.S. power marketers in electricity volume, will market the output of the plants.
“Our wholesale and trading organization is the best in the business, in my opinion,” Draper said. “We’ve grown from start-up to a leading player in about three years. This marketing and trading mentality has changed how we operate our plants, making us much more efficient and more profitable.”
John Norris, AEP’s senior vice president – operations and technical services, said AEP has “a unique set of assets in its power plants, support services and people.” The challenge, he said, is getting more value out of the assets.
“We’ve implemented what has been a very successful incentive program for our generation group,” Norris said. “The employees understand the wholesale markets, forward price curves and what they can do to increase company profits which, in turn, increases their individual compensation. They’ve been aggressively – and enthusiastically – looking for ways to make a difference.
“We’ve already seen the results of this,” Norris said. “Our plant availability in our eastern region is up almost 4 percent over last year. We’ve also reduced our operations and maintenance expenses by almost 13 percent since 1998 while simultaneously improving our safety record.”
AEP views individual plants as profit units that work together for total team results. The company has extended that thinking to include service groups.
“AEP Pro Serv is a good example,” Norris said. “It was formed by combining a variety of AEP’s internal engineering and technical support services groups into a for-profit company. AEP Pro Serv is building three power plants for other companies and is successfully marketing a variety of engineering, environmental and maintenance services to other companies.”
While AEP’s generation employees were learning the wholesale markets, the company’s traders and marketers were learning key elements of plant operations.
“To be successful, our traders had to integrate the plant information with other market information,” said Eric van der Walde, AEP’s senior vice president – energy trading. “An added benefit is that our three years of experience with our own plants helped us learn how to work with plant operations. This enabled us to efficiently integrate the new megawatts that came with the recently completed merger with Central and South West.”
But van der Walde notes that AEP’s wholesale marketing and trading operation goes far beyond the megawatts supplied by the company’s plants.
“We have continued to broaden our base,” van der Walde said. “Our marketing and trading organization is number two in the U.S. in electricity volume, so it’s obvious we do more than just move AEP’s megawatts.
“But we are more than just electricity. We currently trade electricity, natural gas, sulfur dioxide allowances and coal. We are rapidly growing our gas capabilities, and our European trading is also rapidly growing.”
AEP’s natural gas volumes averaged approximately 4 billion cubic feet per day in the third quarter, up from approximately 2.5 billion cubic feet per day in the third quarter last year. The company’s European traders completed as many as 600 transactions a week in September, up from less than 50 a week as recently as June.
And AEP is heavily involved with leading electronic exchanges as a partner in IntercontinentalExchange and an equity investor in Altra.
“Our wholesale marketing and trading business is growing rapidly, efficiently and profitably,” van der Walde said.
“Our focus for growth moving forward, plain and simple, will be the wholesale business – generation and related energy assets, wholesale marketing and trading,” said E. Linn Draper Jr., AEP’s chairman, president and chief executive officer. “With our large generating fleet and very successful trading organization, we are already in an excellent position as our markets move toward deregulation and competition. We are following a plan to strengthen our position.”
Draper and other top AEP officials discussed the company’s direction with financial analysts today during luncheon presentations at Edison Electric Institute’s annual financial conference.
During his presentation, Draper announced that AEP will file documents with the Securities and Exchange Commission this week outlining a restructuring plan that will group the company’s growth businesses and provide options for unlocking shareholder value. The SEC filing is required before companies regulated under the Public Utility Holding Company Act (PUHCA) of 1935 can make organizational changes.
AEP’s SEC filing will seek authorization to form two wholly owned corporations.
One corporation will hold AEP’s utility and non-utility subsidiaries whose revenues derive from competitive, usually market-based, activities.
The second will hold AEP’s utility subsidiaries that are subject to regulation by at least one state utility commission or foreign utility subsidiaries subject to rates or tariffs regulations.
AEP Networks, a leader in secure communications and networking, today announced that it has signed a distribution agreement with ATS SRL. Under the terms of the deal, ATS will distribute, support and maintain AEP Networks' range of integrated security and Deployable Communications solutions across Italy. The range includes AEP Net Encryptor, AEP Keyper HSM, AEP Netilla SSL VPN and the vadOS range of Deployable Communications Solutions.
"ATS SRL is widely recognised as a leading Value Added Distributor to the Italian Public Sector. This agreement means that we have a valuable distribution channel in Italy that has a deep understanding of our key markets and technologies," Said Simon Cuthbert, European Sales Director for AEP Networks. "The Value Add Resellers that ATS SRL works with also have the same understanding of our marketplace. Their comprehensive support capabilities are a great addition to our growing global distribution network."
Paolo Gorini, VP Sales at ATS SRL, comments, "We have built a positive and well-deserved reputation for delivering quality systems and solutions to enterprises and public sector organisations in Italy. The AEP Networks range of products will add to our capability bringing, as it does, tried and tested functionality with the appropriate accreditations for all applications."
AEP’s product range utilises advanced SSL and IPsec virtual private networking (VPN) and secure terminal services technologies as well as high-performance cryptographic and ASIC (Application-Specific Integrated Circuit) technologies. The company’s secure application access (SSL VPN) products, which provide access to Windows, Citrix, Outlook Web Access, and more, enable Web-based secure remote computer access to corporate resources, while its highly secure IPSec-based VPNs are designed for site-to-site secure communications optimised for public sector and financial markets.
We work with systems integrators, managed service providers and the distribution channel to deliver integrated solutions incorporating our leading edge products:
Enhanced-grade secure voice and multi-service data platforms (based on the vadOS operating system) that support a wide range of communications protocols and network topologies
High assurance networking via IPsec-based VPN encryptors for site-to-site security and remote access
Hardware Security Modules (HSMs) for cryptographic key management and storage
Secure remote access to networks and applications - including virtual environments - via application-layer security gateways and SSL VPNs
AEP utilizes its participation in user groups, standards bodies, working groups, testing, etc to assist, lead and influence the industry in developing and maintaining better and more mature standards and products
American Electric Power was the first utility to utilize 345KV transmission lines which took place in 1953.
Distribution Strategy
AEP’s wholesale and trading group, ranked second among U.S. power marketers in electricity volume, will market the output of the plants.
“Our wholesale and trading organization is the best in the business, in my opinion,” Draper said. “We’ve grown from start-up to a leading player in about three years. This marketing and trading mentality has changed how we operate our plants, making us much more efficient and more profitable.”
John Norris, AEP’s senior vice president – operations and technical services, said AEP has “a unique set of assets in its power plants, support services and people.” The challenge, he said, is getting more value out of the assets.
“We’ve implemented what has been a very successful incentive program for our generation group,” Norris said. “The employees understand the wholesale markets, forward price curves and what they can do to increase company profits which, in turn, increases their individual compensation. They’ve been aggressively – and enthusiastically – looking for ways to make a difference.
“We’ve already seen the results of this,” Norris said. “Our plant availability in our eastern region is up almost 4 percent over last year. We’ve also reduced our operations and maintenance expenses by almost 13 percent since 1998 while simultaneously improving our safety record.”
AEP views individual plants as profit units that work together for total team results. The company has extended that thinking to include service groups.
“AEP Pro Serv is a good example,” Norris said. “It was formed by combining a variety of AEP’s internal engineering and technical support services groups into a for-profit company. AEP Pro Serv is building three power plants for other companies and is successfully marketing a variety of engineering, environmental and maintenance services to other companies.”
While AEP’s generation employees were learning the wholesale markets, the company’s traders and marketers were learning key elements of plant operations.
“To be successful, our traders had to integrate the plant information with other market information,” said Eric van der Walde, AEP’s senior vice president – energy trading. “An added benefit is that our three years of experience with our own plants helped us learn how to work with plant operations. This enabled us to efficiently integrate the new megawatts that came with the recently completed merger with Central and South West.”
But van der Walde notes that AEP’s wholesale marketing and trading operation goes far beyond the megawatts supplied by the company’s plants.
“We have continued to broaden our base,” van der Walde said. “Our marketing and trading organization is number two in the U.S. in electricity volume, so it’s obvious we do more than just move AEP’s megawatts.
“But we are more than just electricity. We currently trade electricity, natural gas, sulfur dioxide allowances and coal. We are rapidly growing our gas capabilities, and our European trading is also rapidly growing.”
AEP’s natural gas volumes averaged approximately 4 billion cubic feet per day in the third quarter, up from approximately 2.5 billion cubic feet per day in the third quarter last year. The company’s European traders completed as many as 600 transactions a week in September, up from less than 50 a week as recently as June.
And AEP is heavily involved with leading electronic exchanges as a partner in IntercontinentalExchange and an equity investor in Altra.
“Our wholesale marketing and trading business is growing rapidly, efficiently and profitably,” van der Walde said.
“Our focus for growth moving forward, plain and simple, will be the wholesale business – generation and related energy assets, wholesale marketing and trading,” said E. Linn Draper Jr., AEP’s chairman, president and chief executive officer. “With our large generating fleet and very successful trading organization, we are already in an excellent position as our markets move toward deregulation and competition. We are following a plan to strengthen our position.”
Draper and other top AEP officials discussed the company’s direction with financial analysts today during luncheon presentations at Edison Electric Institute’s annual financial conference.
During his presentation, Draper announced that AEP will file documents with the Securities and Exchange Commission this week outlining a restructuring plan that will group the company’s growth businesses and provide options for unlocking shareholder value. The SEC filing is required before companies regulated under the Public Utility Holding Company Act (PUHCA) of 1935 can make organizational changes.
AEP’s SEC filing will seek authorization to form two wholly owned corporations.
One corporation will hold AEP’s utility and non-utility subsidiaries whose revenues derive from competitive, usually market-based, activities.
The second will hold AEP’s utility subsidiaries that are subject to regulation by at least one state utility commission or foreign utility subsidiaries subject to rates or tariffs regulations.
AEP Networks, a leader in secure communications and networking, today announced that it has signed a distribution agreement with ATS SRL. Under the terms of the deal, ATS will distribute, support and maintain AEP Networks' range of integrated security and Deployable Communications solutions across Italy. The range includes AEP Net Encryptor, AEP Keyper HSM, AEP Netilla SSL VPN and the vadOS range of Deployable Communications Solutions.
"ATS SRL is widely recognised as a leading Value Added Distributor to the Italian Public Sector. This agreement means that we have a valuable distribution channel in Italy that has a deep understanding of our key markets and technologies," Said Simon Cuthbert, European Sales Director for AEP Networks. "The Value Add Resellers that ATS SRL works with also have the same understanding of our marketplace. Their comprehensive support capabilities are a great addition to our growing global distribution network."
Paolo Gorini, VP Sales at ATS SRL, comments, "We have built a positive and well-deserved reputation for delivering quality systems and solutions to enterprises and public sector organisations in Italy. The AEP Networks range of products will add to our capability bringing, as it does, tried and tested functionality with the appropriate accreditations for all applications."
AEP’s product range utilises advanced SSL and IPsec virtual private networking (VPN) and secure terminal services technologies as well as high-performance cryptographic and ASIC (Application-Specific Integrated Circuit) technologies. The company’s secure application access (SSL VPN) products, which provide access to Windows, Citrix, Outlook Web Access, and more, enable Web-based secure remote computer access to corporate resources, while its highly secure IPSec-based VPNs are designed for site-to-site secure communications optimised for public sector and financial markets.
We work with systems integrators, managed service providers and the distribution channel to deliver integrated solutions incorporating our leading edge products:
Enhanced-grade secure voice and multi-service data platforms (based on the vadOS operating system) that support a wide range of communications protocols and network topologies
High assurance networking via IPsec-based VPN encryptors for site-to-site security and remote access
Hardware Security Modules (HSMs) for cryptographic key management and storage
Secure remote access to networks and applications - including virtual environments - via application-layer security gateways and SSL VPNs
AEP utilizes its participation in user groups, standards bodies, working groups, testing, etc to assist, lead and influence the industry in developing and maintaining better and more mature standards and products
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