Long-Term Improvements Yield Customer Benefits

Providing you with safe, reliable and affordable electricity is always our top priority.

To that end, about five years ago, we launched an initiative that is aimed at improving and strengthening our generation, transmission and delivery systems.

The improvements include building and upgrading power stations, some two dozen major transmission projects and a transformer-replacement program.

Through 2016, we will spend $4.5 billion on new transmission and distribution lines, substations and other facilities.

Another $4.9 billion will be spent for new power stations.

We will continue to strengthen our electric grid, support growing demand and improve reliability.

Today, the infrastructure serving you works more effectively than ever.

That was proven last year when we persevered through one of our stormiest years on record.

Our region endured major thunderstorms, tornadoes, an earthquake and Hurricane Irene, which blew its way from the Atlantic Ocean across our entire electric system.

Extreme heat brought another challenge. On July 22, our customers set a record for the most electricity used at a given time - 20,061 megawatts.

That compares with a peak set in July 2005 of 18,897 megawatts, and it equates to providing electricity for about 291,000 more residential customers.

We met that demand effectively, thanks to infrastructure improvements we continue to implement.

IT’S WORKING: ON TIME, ON BUDGET

Having a diverse fuel supply is the best hedge against high prices and short supplies.

With rich natural gas deposits being tapped in nearby states, we are increasing the amount of this clean-burning fuel we use and are reducing our reliance on coal.

For example, this past summer the natural-gas fired Bear Garden Power Station went online - on time and on budget.

Also, on time and on budget is our Virginia City Hybrid Energy Center, a clean-coal and biomass power station.

When it comes online this summer, this power station will be one of the cleanest of its kind in the nation.

We also have applied to convert three coal-fired power stations to biomass and to build another natural gas station.

And, two other natural gas stations are under consideration, as is a community solar program that would add enough solar electricity for 6,000 homes.

KEEPING THE LIGHTS ON

Service reliability - as measured by minutes without power, excluding major storms - improved 18 percent since 2004.

With some 63,078 miles of transmission and distribution lines, 900 substations, 566,000 transformers and 1.1 million utility poles, we have to take a multipronged approach to maintaining our system.

For example, we are:

• Replacing or updating older facilities, such as rebuilding a 45-year-old transmission line that comes out of our Mount Storm Power Station in West Virginia. The work will increase the line’s capacity by 66 percent.
• Improving reliability through systematic maintenance, tree trimming and underground cable replacement.
• Improving the performance of circuits and other equipment where customers have experienced a higher-than-normal level of service interruptions.
• Investing in new and advanced electric technology, including automated switching devices and smart-fault indicators.

In new developments, we are putting many distribution lines underground. One benefit of underground lines is fewer outages during storms.

Of our 56,910 miles of distribution lines, 38 percent, 21,690, are now underground.

Today, one of our greatest challenges is heightened customer expectations. The more we improve our infrastructure, the more is expected of us.

But that, I believe, is how it should be.

Before I close, I want to give a special thanks to our linemen and other workers.

Like you, many of them were without power and suffered significant damage to their homes during Hurricane Irene.

But they continued to report to work every day to ensure the restoration of your power as quickly as possible.

I appreciate their efforts. And I appreciate your continued support.

Sincerely,
Paul D. Koonce