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2014 Hard-to-ReachStandard Offer Program

October 23, 2013

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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

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10001500200025003000350040004500

TCC TNC SWEPCO

2010201120122013

2013 YTD• TCC – 1,830 Customers Served; 4,071 total installations• TNC - 274 Customers Served; 629 total installations• SWEPCO – 1,314 Customers Served; 2,299 total installations

Lower Budgets impact # of Customers Served2013 numbers are from incentive reports processed/paid through the 3rd quarter.

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HTR Successes (continued)TCC: 12 Counties traditionally Underserved experienced measure

installations in 2013 Program goals met after first month of program opening

TNC: YTD savings achieved: 233 kW 704,398 kWh 2013 Program Goal: 240 kW 653,561 kWh SWEPCO: 3 Counties traditionally Underserved experienced measure

installations in 2013

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2014 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

2014 KEY CHANGES Project Sponsors must carry all statutorily required insurance The 2014 HTR SOP shall utilize the deemed savings values contained in

the State of Texas Technical Reference Manual (TRM), unless thePUCT indicates otherwise

Residential dwellings or additions completed after January 1, 2012 donot qualify for the program

Home Energy Rater (HERs) or Building Performance Institute (BPI)individual required to be on staff for any Project Sponsor performingduct efficiency and/or air infiltration measures. HERs or BPIindividual required to be listed on Project Sponsor application

Underserved Counties for TNC and SWEPCO have been revised for 2014 A new field to report “# of bedrooms” has been added as a required

field on the customer input form Customer-level document upload feature added to database

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CONTINUING IN 2014 Blower-door testing shall occur immediately prior to the installation of any

air infiltration measures at every site. Post-installation testing shall occur immediately following the installation of air infiltration measures at every site

Pre- and post-retrofit duct pressurization testing shall be performed at every site by Project Sponsors implementing the duct efficiency measure to verify and record leakage sealed

Work schedules required for Project Sponsors completing duct efficiencyand infiltration measures in Single Family projects

Project Sponsors must provide a work schedule for Multi-Family projectsseven (7) days prior to measure installation

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

All installations must be submitted on an Incentive Report within 45 days ofthe 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 Infiltrationmeasures and “R” Value of Existing Ceiling Insulation

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CONTINUING IN 2014 (continued) CFL measure not eligible in SWEPCO HTR SOP 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 thisprogram (Air Infiltration and Ceiling Insulation measures)

The air infiltration Deemed Savings include an upper limit of 4 CFM50 persquare foot of house floor area pre-retrofit infiltration rate and this limitwill be enforced

All use of marketing, including social media, must be approved by AEP Different incentive rate for historically underserved measures Different incentive rate for projects targeting historically underserved

counties

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HTR SOP INCENTIVE BUDGETS

Budget Limit per PS

TCC $ 953,417 $ 75,000

TNC $ 162,719 $ 50,000

SWEPCO $ 562,360 $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 ofall required information

Once eligibility has been verified and applicationpre-approved, enter into a agreement with AEP toinstall 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 insuranceagency)

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 CountieskW kWh

Standard Single-Family $360 $0.11Standard Multi-Family $325 $0.10Underserved Measures $400 $0.13Underserved Counties $440 $0.15

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Incentive Payment Limits

Load Factor Caps:

For all combined kW and kWh incentivepayments, incentive is limited to:

$920 per kW

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Incentive Payment ExampleInstall Measures in Single-Family dwellings resulting in savings of:

48 kW 120,000 kWh

Standard Single-Family Incentive Rate:

$360/kW $0.11/kWh

Total Incentive Payment: $30,480(before any limits)

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Underserved Counties - TCCATASCOSA 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 COTTLE DICKENS

FOARD HALL HARDEMAN

KENT KING KNOX

MOTLEY STONEWALL

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Underserved Counties - SWEPCO

CHILDRESS FRANKLIN HOPKINS

RED RIVER SMITH UPSHER

VAN ZANDT WHEELER WOOD

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Application Process

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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 24, 2013

Submit applications December 3, 2013

Implementation begins February 4, 2014

Must have approved application status

Must have 2014 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 ReservationProgram 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 onHCA.

Provide customer with Approved EducationalMaterials

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Reporting

Monthly reporting via internetInaccurate reporting results in failures

Un-submitted Measure installations over 45days old will lock out reservations feature

AEP will process inspection-adjusted IncentiveReports within 45 days under normalcircumstances

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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 measurelife expectancy)

Verify that Measures qualify and thatinstallation standards were followed

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2013 Program Issues Inaccurate pre assessments, i.e. incorrect levels of existing ceiling

insulation reported, incorrect heating type reported Failure to perform pre-retrofit installation blower-door and duct

blaster tests Failure to perform post-installation blower-door and duct blaster

tests HCA’s and Installations done prior to application approval Submitting incomplete forms (HCA, income eligibility 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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2013 Program Issues (continued) Door weather-stripping; customer(s) must be able to close and shut

door(s) with minimum effort after installation CFLs installed in non-common areas (e.g, closets, pantries) 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 deemedunacceptable 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 StraussPhone: 361.574.2252E-mail: svstrauss@aep.com

TNC – Steve MutisoPhone: 325.674.7287E-mail: smmutiso@aep.com

SWEPCO – Jeff ThigpenPhone: 318.673.3372E-mail: jdthigpen@aep.com

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Comments and Questions……………….