AEP Prepares for Market Change

The controlled electricity-blackouts scheduled this summer for California residents won’t happen in Arkansas when it deregulates in 2003-2005, said William Lhota, president of energy services for American Electric Co.

“California is an anomaly, in our opinion, that we don’t expect to see in our states,” Lhota said. “[In California] the restructuring was flawed.”

Restructuring includes deregulation of electricity generation, transmission and distribution. Headquartered in Columbus, Ohio, AEP serves Arkansas, Louisiana, Texas, Oklahoma, Michigan, Indiana, Ohio, Kentucky, Virginia, West Virginia and Tennessee, and only Ohio now has an open market for electric energy. Texas will deregulate next year.

Lhota said AEP has faced several challenges during Ohio’s deregulation, which began Jan. 1. Educating the public about its new choices for electricity is a battle.

“People don’t wake up in the morning and think about who they want to supply their electricity,” Lhota said.

Developing an efficient system for “back-room policies” — reading meters and billing customers — has been another complication.