CORRESP 1 filename1.htm Document


William H. Thompson - Accounting Branch Chief
Yolanda Guobadia - Staff Accountant
Securities and Exchange Commission
Division of Corporation Finance
100 F Street NE
Washington, D. C. 20549


August 29, 2017

RE:
American Electric Power Company, Inc.
 
Form 10-K for the Fiscal Year Ended December 31, 2016
 
Filed February 28, 2017
 
Form 8-K Filed July 27, 2017
 
File No. 1-03525

Responses to the comment letter dated August 15, 2017 from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) regarding the above-captioned Form 10-K and Form 8-K of American Electric Power Company, Inc. are provided herewith, including the text of the Staff’s comments.

Form 10-K for Fiscal Year Ended December 31, 2016

Exhibit 13

Results of Operations, page 17

1.
We note your presentation of gross margin, a non-GAAP measure. Please disclose in future filings why management believes the presentation of the non-GAAP measure provides useful information to investors. Refer to Item 10(e)(1)(i)(c) of Regulation S-K.

Response:

We have referred to the disclosure requirements relating to the use of non-GAAP financial measures, as set forth in Item 10(e)(1)(i)(c) of Regulation S-K. In future filings, AEP will include additional disclosure which indicates why management believes that presentation of the non-GAAP financial measure provides useful information to investors. The following is an example of the proposed disclosure to be included in future periods (new information in bold font):

“The following discussion of AEP’s results of operations by operating segment includes an analysis of Gross Margin, which is a non-GAAP financial measure. Gross Margin includes Total Revenues less the costs of Fuel and Other Consumables Used for Electric Generation as well as Purchased Electricity for Resale, Generation Deferrals and Amortization of Generation Deferrals as presented in the Registrants statements of income as applicable. Under our various state utility rate making processes, these expenses are generally reimbursable directly from and billed to customers. As a result, they do not typically impact Operating Income or Earnings Attributable to AEP Common Shareholders. Management believes that Gross Margin provides a useful measure for investors and other financial statement users to analyze AEP’s financial performance in that it excludes the effect on Total Revenues caused by volatility in these expenses. Operating Income, which is presented in accordance with GAAP in AEP’s statements of income, is the most directly comparable GAAP financial measure to the presentation of Gross Margin. AEP’s definition of Gross Margin may not be directly comparable to similarly titled financial measures used by other companies.”





Form 8-K Filed July 27, 2017

Exhibit 99.1

Please clearly label operating earnings and operating earnings per share as non-GAAP measures in your future earnings releases.

Response:

In future earnings release filings, AEP will clearly label operating earnings and operating earnings per share as non-GAAP measures. Below is an example of changes to be included in future periods (note that the example below is the actual AEP Second Quarter 2017 Earnings Release with the proposed labeling changes, which are for purposes of this communication, highlighted in yellow).
            
aepearningsreleaselogo.jpg
 
News from AEP
MEDIA CONTACT:
 
ANALYSTS CONTACT:
Melissa McHenry
 
Bette Jo Rozsa
Director, External Communications
 
Managing Director, Investor Relations
614/716-1120
 
614/716-2840

FOR IMMEDIATE RELEASE        

AEP REPORTS SECOND-QUARTER 2017 EARNINGS; REAFFIRMS FULL-YEAR EARNINGS GUIDANCE

•
Second-quarter 2017 GAAP earnings of $0.76 per share
•
Second-quarter 2017 operating earnings of $0.75 per share
•
Improved economic conditions support industrial sales growth

 
AMERICAN ELECTRIC POWER
Preliminary, unaudited results
 
 
Second Quarter ended June 30
 
Year-to-date ended June 30
 
 
2017

2016

Variance

 
2017

2016

Variance

Revenue ($ in billions):
3.6

3.9

(0.3
)
 
7.5

7.9

(0.4
)
Earnings (Loss) ($ in millions):
 
 
 
 
 
 
 
 
GAAP
375.0

502.1

(127.1
)
 
967.2

1,003.3

(36.1
)
 
Operating (non-GAAP)
370.4

465.7

(95.3
)
 
844.7

966.9

(122.2
)
EPS ($):
 
 
 
 
 
 
 
 
 
GAAP
0.76

1.02

(0.26
)
 
1.97

2.04

(0.07
)
 
Operating (non-GAAP)
0.75

0.95

(0.20
)
 
1.72

1.97

(0.25
)
EPS based on 492mm shares 2Q 2017, 491mm shares 2Q 2016, 492mm shares YTD 2017 and 491mm shares YTD 2016.
 





COLUMBUS, Ohio, July 27, 2017 - American Electric Power (NYSE: AEP) today reported second-quarter 2017 earnings, prepared in accordance with Generally Accepted Accounting Principles (GAAP), of $375 million or $0.76 per share, compared with GAAP earnings of $502 million or $1.02 per share in second-quarter 2016. Operating earnings for second-quarter 2017 were $370 million or $0.75 per share, compared with operating earnings of $466 million or $0.95 per share in second-quarter 2016. Operating earnings is a non-GAAP measure representing GAAP earnings excluding special items. The difference between 2017 GAAP earnings and operating earnings was largely due to adjustments related to the sale of competitive generation assets.    
A full reconciliation of GAAP earnings to operating earnings for the quarter and year-to-date is included in the tables at the end of this news release.
“We are on track to achieve our operating earnings guidance range of $3.55 to $3.75 per share this year, despite the negative impact of very mild temperatures. We anticipated lower operating earnings performance this quarter, compared with last year, due to the sale of competitive generation assets and the positive impacts from regulatory true ups and reversals a year ago. The remainder of the year will benefit from lower operating and maintenance expenses compared to last year,” said Nicholas K. Akins, AEP chairman, president and chief executive officer. 
“Overall economic conditions are getting better in the states we serve, consistent with the improvement we’ve projected in our 2017 operating earnings guidance. Industrial load increased by four percent this quarter, and we are now seeing positive industrial sales results across most industries in our service area. We are optimistic that this stronger industrial demand will lead to future improvements in commercial and residential load later this year.
“Our transmission business continues to expand, reflecting the increased investments we are making to provide enhanced grid reliability and resilience for customers. Our Transmission Holding Co. business contributed 26 cents per share for the quarter, an increase of seven cents from the same period last year,” Akins said.





SUMMARY OF RESULTS BY SEGMENT
$ in millions
GAAP Earnings
2Q 17

2Q 16

Variance

YTD 17

YTD 16

Variance

Vertically Integrated Utilities (a)
120.8

209.4

(88.6
)
340.3

487.0

(146.7
)
Transmission & Distribution Utilities (b)
111.2

124.6

(13.4
)
230.3

232.1

(1.8
)
AEP Transmission Holdco (c)
128.4

94.6

33.8

200.2

138.5

61.7

Generation & Marketing (d)
26.4

49.7

(23.3
)
212.6

120.4

92.2

Corporate and Other (e)
(11.8
)
23.8

(35.6
)
(16.2
)
25.3

(41.5
)
        Total GAAP Earnings (Loss)
375.0

502.1

(127.1
)
967.2

1,003.3

(36.1
)
 
 
 
 
 
 
 
Operating Earnings (non-GAAP)
2Q 17

2Q 16

Variance

YTD 17

YTD 16

Variance

Vertically Integrated Utilities (a)
120.8

209.4

(88.6
)
340.3

487.0

(146.7
)
Transmission & Distribution Utilities (b)
111.2

124.6

(13.4
)
230.3

232.1

(1.8
)
AEP Transmission Holdco (c)
128.4

94.6

33.8

200.2

138.5

61.7

Generation & Marketing (d)
21.8

46.0

(24.2
)
90.1

116.7

(26.6
)
Corporate and Other (e)
(11.8
)
(8.9
)
(2.9
)
(16.2
)
(7.4
)
(8.8
)
        Total Operating Earnings (non-GAAP)
370.4

465.7

(95.3
)
844.7

966.9

(122.2
)
 
A full reconciliation of GAAP earnings to operating earnings is included in tables at the end of this news release.

a.
Includes AEP Generating Co., Appalachian Power, Indiana Michigan Power, Kentucky Power, Kingsport Power, Public Service Company of Oklahoma, Southwestern Electric Power and Wheeling Power.
b.
Includes Ohio Power, AEP Texas.
c.
Includes wholly-owned transmission-only subsidiaries and transmission-only joint ventures.
d.
Includes AEP OnSite Partners, AEP Renewables, nonregulated generation in ERCOT and PJM as well as marketing, risk management and retail activities in ERCOT, PJM and MISO.
e.
Includes commercial barging operations in prior periods.

EARNINGS GUIDANCE
Management reaffirms its 2017 operating earnings guidance range of $3.55 to $3.75 per share. Operating earnings could differ from GAAP earnings for matters such as impairments, divestitures or changes in accounting principles. AEP management is not able to forecast if any of these items will occur or any amounts that may be reported for future periods. Therefore, AEP is not able to provide a corresponding GAAP equivalent for earnings guidance.
Reflecting special items recorded through the second quarter, the estimated earnings per share on a GAAP basis would be $3.80 to $4.00 per share. See the table below for a full reconciliation of 2017 earnings guidance.
2017 EPS Guidance Reconciliation
 
 
 
 
Estimated EPS on a GAAP basis
$3.80
to
$4.00
 
 
 
 
Mark-to-Market impact of commodity hedging activities
 
0.00
 
Impairment of certain merchant generation assets
 
0.01
 
Gain from competitive generation asset sale
 
(0.26)
 
 
 
 
 
Operating EPS Guidance (non-GAAP)
$3.55
to
$3.75

WEBCAST
AEP’s quarterly discussion with financial analysts and investors will be broadcast live over the internet at 9 a.m. EDT today at http://www.aep.com/webcasts. The webcast will include audio of the discussion and




visuals of charts and graphics referred to by AEP management. The charts and graphics will be available for download at http://www.aep.com/webcasts.
American Electric Power, based in Columbus, Ohio, is focused on building a smarter energy infrastructure and delivering new technologies and custom energy solutions to our customers. AEP’s more than 17,000 employees operate and maintain the nation’s largest electricity transmission system and more than 224,000 miles of distribution lines to efficiently deliver safe, reliable power to nearly 5.4 million regulated customers in 11 states. AEP also is one of the nation’s largest electricity producers with approximately 33,000 megawatts of diverse generating capacity, including 4,200 megawatts of renewable energy. AEP’s family of companies includes utilities AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP also owns AEP Energy, AEP Energy Partners, AEP OnSite Partners, and AEP Renewables, which provide innovative competitive energy solutions nationwide.
AEP’s earnings are prepared in accordance with accounting principles generally accepted in the United States and represent the company’s earnings as reported to the Securities and Exchange Commission. The company’s operating earnings, a non-GAAP measure representing GAAP earnings excluding special items as described in the news release and charts, provide another representation for investors to evaluate the performance of the company’s ongoing business activities. AEP uses operating earnings as the primary performance measurement when communicating with analysts and investors regarding its earnings outlook and results. The company uses operating earnings data internally to measure performance against budget and to report to AEP’s Board of Directors and also as an input in determining performance-based compensation under the company’s employee incentive compensation plans.
---
This report made by American Electric Power and its Registrant Subsidiaries contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its Registrant Subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: economic growth or contraction within and changes in market demand and demographic patterns in AEP service territories; inflationary or deflationary interest rate trends; volatility in the financial markets, particularly developments affecting the availability or cost of capital to finance new capital projects and refinance existing debt; the availability and cost of funds to finance working capital and capital needs, particularly during periods when the time lag between incurring costs and recovery is long and the costs are material; electric load and customer growth; weather conditions, including storms and drought conditions, and AEP’s ability to recover significant storm restoration costs; the cost of fuel and its transportation and the creditworthiness and performance of fuel suppliers and transporters and the cost of storing and disposing of used fuel, including coal ash and spent nuclear fuel; availability of necessary generating capacity and the performance of AEP’s generating plants and the availability of fuel, including processed nuclear fuel, parts and service from reliable vendors; AEP’s ability to recover fuel and other energy costs through regulated or competitive electric rates; AEP’s ability to build transmission lines and facilities (including the ability to obtain any necessary regulatory approvals and permits) when needed at acceptable prices and terms and to recover those costs; new legislation, litigation and government regulation, including oversight of nuclear generation, energy commodity trading and new or heightened requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances that could impact the continued operation, cost recovery, and/or profitability of AEP’s generation plants and related assets; evolving public perception of the risks associated with fuels used before, during and after the generation of electricity, including nuclear fuel; a reduction in the federal statutory tax rate that could result in an accelerated return of deferred federal income taxes to customers; timing and resolution of pending and future rate cases, negotiations and other regulatory decisions, including rate or other recovery of new investments in generation, distribution and transmission service and environmental compliance; resolution of litigation; AEP’s ability to constrain operation and maintenance costs; AEP’s ability to develop and execute a strategy based on a view regarding prices of electricity and gas; prices and demand for power generated and sold at wholesale; changes in technology, particularly with respect to energy storage and new, developing, alternative or distributed sources of generation; AEP’s ability to recover through rates any remaining unrecovered investment in generating units that may be retired before the end of their previously projected useful lives; volatility and changes in markets for capacity and electricity, coal, and other energy-related commodities, particularly changes in the price of natural gas; changes in utility regulation and the allocation of costs within regional transmission organizations, including ERCOT, PJM and SPP; AEP’s ability to successfully and profitably manage competitive generation assets, including the evaluation and execution of strategic alternatives for these assets as some of the alternatives could result in a loss; changes in the creditworthiness of the counterparties with whom AEP has contractual arrangements, including participants in the energy trading market; actions of rating agencies, including changes in the ratings of AEP debt; the impact of volatility in the capital markets on the value of the investments held by AEP’s pension, other postretirement benefit plans, captive insurance entity and nuclear decommissioning trust and the impact of such volatility on future funding requirements; accounting pronouncements periodically issued by accounting standard-setting bodies; and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes, cyber security threats and other catastrophic events.




American Electric Power
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Results for the Second Quarter of 2017
Reconciliation of GAAP to Operating Earnings (non-GAAP)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2017
 
 
 
Vertically Integrated Utilities
 
Transmission & Distribution Utilities
 
AEP Transmission Holdco
 
Generation & Marketing
 
Corporate and Other
 
Total
 
EPS
 
 
 
($ millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Earnings (Loss)
 
120.8

 
111.2

 
128.4

 
26.4

 
(11.8
)
 
375.0

 
$
0.76

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Special Items
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mark-to-Market Impact of Commodity Hedging Activities
(a)
—

 
—

 
—

 
0.7

 
—

 
0.7

 
$
—

 
Gain from Competitive Generation Asset Sale
(b)
—

 
—

 
—

 
(2.3
)
 
—

 
(2.3
)
 
—

 
Impairment of Certain Merchant Generation Assets
(c)
—

 
—

 
—

 
(3.0
)
 
—

 
(3.0
)
 
(0.01
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Special Items
 
—

 
—

 
—

 
(4.6
)
 
—

 
(4.6
)
 
$
(0.01
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings (Loss) (non-GAAP)
 
120.8

 
111.2

 
128.4

 
21.8

 
(11.8
)
 
370.4

 
$
0.75

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Results for the Second Quarter of 2016
Reconciliation of GAAP to Operating Earnings (non-GAAP)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2016
 
 
 
Vertically Integrated Utilities
 
Transmission & Distribution Utilities
 
AEP Transmission Holdco
 
Generation and Marketing
 
Corporate and Other
 
Total
 
EPS
 
 
 
($ millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Earnings (Loss)
 
209.4

 
124.6

 
94.6

 
49.7

 
23.8

 
502.1

 
$
1.02

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Special Items
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mark-to-Market Impact of Commodity Hedging Activities
(a)
—

 
—

 
—

 
(3.7
)
 
—

 
(3.7
)
 
(0.01
)
 
Disposition of Commercial Barge Operations
(d)
—

 
—

 
—

 
—

 
22.9

 
22.9

 
0.05

 
Federal Tax Audit Settlement
(e)
—

 
—

 
—

 
—

 
(55.6
)
 
(55.6
)
 
(0.11
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Special Items
 
—

 
—

 
—

 
(3.7
)
 
(32.7
)
 
(36.4
)
 
$
(0.07
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings (Loss) (non-GAAP)
 
209.4

 
124.6

 
94.6

 
46.0

 
(8.9
)
 
465.7

 
$
0.95


(a)
Reflected in Revenues and Income Tax Expense.
(b)
Reflected in Gain on Sale of Assets and Income Tax Expense.
(c)
Reflected in Asset Impairments and Other Related Charges and Income Tax Expense.
(d)
Reflected in Discontinued Operations, Equity Earnings and Income Tax Expense.
(e)
Reflected in Income Tax Expense.




American Electric Power
Summary of Selected Sales Data
Regulated Connected Load
(Data based on preliminary, unaudited results)
 
 
 
 
 
 
 
 
 
Three Months Ended June 30
ENERGY & DELIVERY SUMMARY
 
2017
 
2016
 
Change
 
 
 
 
 
 
 
Vertically Integrated Utilities
 
 
 
 
 
 
Retail Electric (in millions of kWh):
 
 
 
 
 
 
   Residential
 
6,499

 
6,674

 
(2.6
)%
   Commercial
 
5,996

 
6,190

 
(3.1
)%
   Industrial
 
8,689

 
8,654

 
0.4
 %
   Miscellaneous
 
562

 
565

 
(0.5
)%
   Total Retail
 
21,746

 
22,083

 
(1.5
)%
 
 
 
 
 
 
 
Wholesale Electric (in millions of kWh): (a)
 
5,918

 
5,696

 
3.9
 %
 
 
 
 
 
 
 
Total KWHs
 
27,664

 
27,779

 
(0.4
)%
 
 
 
 
 
 
 
Transmission & Distribution Utilities
 
 
 
 
 
 
Retail Electric (in millions of kWh):
 
 
 
 
 
 
   Residential
 
5,956

 
6,009

 
(0.9
)%
   Commercial
 
6,490

 
6,602

 
(1.7
)%
   Industrial
 
5,941

 
5,506

 
7.9
 %
   Miscellaneous
 
171

 
175

 
(2.3
)%
   Total Retail (b)
 
18,558

 
18,292

 
1.5
 %
 
 
 
 
 
 
 
Wholesale Electric (in millions of kWh): (a)
 
761

 
412

 
84.7
 %
 
 
 
 
 
 
 
Total KWHs
 
19,319

 
18,704

 
3.3
 %

(a)
Includes Off-System Sales, Municipalities and Cooperatives, Unit Power, and Other Wholesale Customers.
(b)
Represents energy delivered to distribution customers.





American Electric Power
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Results for Year-to-Date 2017
Reconciliation of GAAP to Operating Earnings (non-GAAP)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2017
 
 
 
Vertically Integrated Utilities
 
Transmission & Distribution Utilities
 
AEP Transmission Holdco
 
Generation & Marketing
 
Corporate and Other
 
Total
 
EPS
 
 
 
($ millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Earnings (Loss)
 
340.3

 
230.3

 
200.2

 
212.6

 
(16.2
)
 
967.2

 
$
1.97

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Special Items
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mark-to-Market Impact of Commodity Hedging Activities
(a)
—

 
—

 
—

 
2.7

 
—

 
2.7

 
$
—

 
Gain from Competitive Generation Asset Sale
(b)
—

 
—

 
—

 
(129.4
)
 
—

 
(129.4
)
 
(0.26
)
 
Impairment of Certain Merchant Generation Assets
(c)
—

 
—

 
—

 
4.2

 
—

 
4.2

 
0.01

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Special Items
 
—

 
—

 
—

 
(122.5
)
 
—

 
(122.5
)
 
$
(0.25
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings (Loss) (non-GAAP)
 
340.3

 
230.3

 
200.2

 
90.1

 
(16.2
)
 
844.7

 
$
1.72

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Results for Year-to-Date 2016
Reconciliation of GAAP to Operating Earnings (non-GAAP)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2016
 
 
 
Vertically Integrated Utilities
 
Transmission & Distribution Utilities
 
AEP Transmission Holdco
 
Generation & Marketing
 
Corporate and Other
 
Total
 
EPS
 
 
 
($ millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Earnings (Loss)
 
487.0

 
232.1

 
138.5

 
120.4

 
25.3

 
1,003.3

 
$
2.04

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Special Items
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mark-to-Market Impact of Commodity Hedging Activities
(a)
—

 
—

 
—

 
(3.7
)
 
—

 
(3.7
)
 
(0.01
)
 
Disposition of Commercial Barge Operations
(d)
—

 
—

 
—

 
—

 
22.9

 
22.9

 
0.05

 
Federal Tax Audit Settlement
(e)
—

 
—

 
—

 
—

 
(55.6
)
 
(55.6
)
 
(0.11
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Special Items
 
—

 
—

 
—

 
(3.7
)
 
(32.7
)
 
(36.4
)
 
$
(0.07
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings (Loss) (non-GAAP)
 
487.0

 
232.1

 
138.5

 
116.7

 
(7.4
)
 
966.9

 
$
1.97


(a)
Reflected in Revenues and Income Tax Expense.
(b)
Reflected in Gain on Sale of Assets and Income Tax Expense.
(c)
Reflected in Asset Impairments and Other Related Charges and Income Tax Expense.
(d)
Reflected in Discontinued Operations, Equity Earnings and Income Tax Expense.
(e)
Reflected in Income Tax Expense.






American Electric Power
Summary of Selected Sales Data
Regulated Connected Load
(Data based on preliminary, unaudited results)
 
 
 
 
 
 
 
 
 
Six Months Ended June 30
ENERGY & DELIVERY SUMMARY
 
2017
 
2016
 
Change
 
 
 
 
 
 
 
Vertically Integrated Utilities
 
 
 
 
 
 
Retail Electric (in millions of kWh):
 
 
 
 
 
 
   Residential
 
14,738

 
15,798

 
(6.7
)%
   Commercial
 
11,685

 
12,070

 
(3.2
)%
   Industrial
 
16,953

 
16,921

 
0.2
 %
   Miscellaneous
 
1,098

 
1,106

 
(0.7
)%
   Total Retail
 
44,474

 
45,895

 
(3.1
)%
 
 
 
 
 
 
 
Wholesale Electric (in millions of kWh): (a)
 
12,425

 
10,488

 
18.5
 %
 
 
 
 
 
 
 
Total KWHs
 
56,899

 
56,383

 
0.9
 %
 
 
 
 
 
 
 
Transmission & Distribution Utilities
 
 
 
 
 
 
Retail Electric (in millions of kWh):
 
 
 
 
 
 
   Residential
 
11,850

 
12,250

 
(3.3
)%
   Commercial
 
12,243

 
12,389

 
(1.2
)%
   Industrial
 
11,417

 
11,004

 
3.8
 %
   Miscellaneous
 
331

 
341

 
(2.9
)%
   Total Retail (b)
 
35,841

 
35,984

 
(0.4
)%
 
 
 
 
 
 
 
Wholesale Electric (in millions of kWh): (a)
 
1,559

 
735

 
112.1
 %
 
 
 
 
 
 
 
Total KWHs
 
37,400

 
36,719

 
1.9
 %

(a)
Includes Off-System Sales, Municipalities and Cooperatives, Unit Power, and Other Wholesale Customers.
(b)
Represents energy delivered to distribution customers.
*    *    *    *    *    *

Please do not hesitate to call me at (614) 716-2821 with any questions you may have regarding our responses.


Very truly yours,


/s/ Joseph M. Buonaiuto
Joseph M. Buonaiuto
Controller and Chief Accounting Officer


cc:    Cliff Olsen - Partner, Deloitte & Touche LLP
Casey Herman - Partner, PwC