An interview with Gilbert Hughes


Texas Roadshow changes

 David Hooper and Larry Jones

David L Hooper and Gilbert Hughes 

Please tell us something about yourself.

I am a senor regulatory consultant based in Austin, and I have been with AEP for 22 years. During this time I have held a variety of different positions, including customer services and operations.

I’ve been working in the regulatory field for six years. The position came about with the process of deregulation, where more staff needed to be familiarised with existing operations.

I have been all over the territory of AEP Texas Central Company, including Victoria, Laredo, Del Rio and the Rio Grande Valley. I have a business degree, from Texas A&M Laredo, and I’m a member of the association of engineers.

How did you become involved in the utility industry?

I’m following in the footsteps of my father and grandfather. You could say that I “inherited” the job!

Please give a brief history and current overview of your utility.

AEP Texas includes Texas Central Company, which delivers electricity throughout the service territory of the former Central Power and Light Company, and Texas North Company, which delivers electricity throughout the service territory of the former West Texas Utilities Company.

AEP Texas is an energy delivery company serving South and West Texas. AEP Texas North Company delivers electricity on behalf of the Retail Electric Providers in West Texas.

There are 60 or so retail companies that AEP Texas bills. We provide a service to approximately 900,000 end users – these are direct customers of the reps who deliver the electricity on behalf of AEP Texas. We provide usage data for the market for all 900,000.

The services we offer include transmission, distribution and the market services (metering). AEP Texas performs services for the retail companies, e.g. connecting and disconnecting – there are about 65,000 orders per month. AEP owns and maintains the meters.

AEP is investor-owned; it is part of America Electric Power.

How has deregulation impacted your utility and your customers?

It has brought about a relatively new market structure. Texas is unique – the state had to develop a lot of processes, procedures and practices, which has been a real challenge for everyone, including the retail companies.

There is a group of 15 people who interact with the retail market and help with the transaction and customer issues. These people communicate daily via email and phone, and have account managers that interact on larger problems and issue-specific management topics.

There is an annual retail conference which gives people a chance to interface and allows time to talk about specific issues.

What are some of the key challenges your utility faces?

From a customer service perspective, the challenge is trying to effectively comply with the new terms and conditions and recently established operations for delivery companies. In July a whole new list of requirements and performance standards and tasks were set. AEP’s challenge is to establish specific timeframes to service our customers.

As AEP receives 65,000 orders per month (the majority of which are connect, disconnect, street lights requests etc.) all these have a time limit and need to be responded to. So far we are doing well – we have increased our staff by 20% for “specialist” disconnects and connects, and adding these staff members has enabled us to keep up with the demand.

Physical disconnects are done on the orders of the retail market.

Please give us a short overview of the metering operations.

AEP has a mix of meters, depending on the industry type and the load. There are 210,000 radio frequency meters for residential customers, about 13,000 of which are power line carriers. Most of them were installed in late 2005. There were some start-up issues with power line carriers, but we have had very good service from the radio frequency meters.

AEP uses General Electric for their radio frequency meters, and Itron / Suptron meters. There are 3 mobile collectors, which are from Neptune.

What procedures do you follow when doing upgrades/replacements?

AEP tests a percentage of meters every year, about 1000 annually. This number rises if customers themselves request a test. We work with retailers to try and minimize those requests.

Do you outsource any business processes or operations?

AEP uses third party contractors to install AMR – a company called Texas Metering & Device. Contractors are also employed to help read the meters. There is a group in Corpus Christi that verifies the billing details and those get sent to the retail organisation.

Customers are billed monthly.

Do you offer online bill payments, IVR systems etc?

All details are automated through an electronic data exchange. AEP doesn’t actually bill customers; the retail companies do that.

What (if any) R&D activities are being undertaken by your utility?

There is an AEP organization in Columbus, Ohio that does research and development for AEP. We are currently undergoing a feasibility study of mesh network systems and monitoring the success of that; there will be a pilot later this year. The project, slated to begin in the first quarter of 2007, will enable AEP to evaluate key performance measures prior to installing an advanced metering system in other AEP service areas. 

What is your vision for your utility?

The difficulty we face is that commissions are currently working on an advanced metering rule which will essentially outline an AMI strategy and specifications to help guide AEP Texas. This should be done in the first quarter of 2007. AEP has not installed any new meters recently, as we are waiting for the results of these rules and specifications. The process is in its early formal stages. As it affects the investor-owned utilities, it will be closely monitored.

Thank you for your input.