| | JUNE 201619E ERGYTech ReviewPutting Data and Analytics to Work· Operating Companies ­ our Operating Companies, which serve 5.4 million customers in 11 states, are excited to get a more comprehensive view of customers to help them design better products, services and outreach programs. · Regulatory ­ The Regulatory group wants to leverage the information about our customers to drive meaningful conversations about how we can balance our capital investments to serve the objectives of the communities we serve.· Program Managers ­ after sharing the segmentation results with our customer program managers, we found that the addition of propensity models and scores for particular programs will improve targeting. · Call Center ­ we know that some customers will call repeatedly to find an agent that will give them a more satisfactory answer. We were able to identify two distinct patterns ­ customers who call multiple times in one billing cycle, and those who regularly call in the early or later stages of billing cycles over several months. We found that the majority of these calls were coming from one of our customer segments. We plan additional analysis of call details to implement solutions that will reduce those calls. We were also surprised to learn that, over a three year time frame, 73 percent of our customers had called our call center at least once. This revealed an untapped opportunity to market programs to customers with a high propensity score.Improving Work EfficiencyOur Distribution Services organization sponsored a project to analyze the mix of employee and contractor crews that perform their work ­ installing and maintaining poles, power lines, transformers and other equipment ­ to determine if they could better optimize staffing for different types of projects. We leveraged three years of historical information and developed a forecast model that gives us a high degree of confidence in the most economic staffing mix by project type, allowing us to either reduce costs or increase productivity. As we share the results across the enterprise, many other groups are now very interested in the model and results, including our Transmission and Generation organizations, which also leverage a lot of contractors. Our supply chain organization hopes to use the model to forecast the need for construction and maintenance materials with longer lead times, which could lead to improved pricing and lower inventory carrying costs. We see savings and efficiency opportunities worth millions of dollars across the company.Our early investments in analytics to improve the reliability of the grid have grown organically within our Generation, Transmission, and Distribution organizations. We have initiatives in all three groups that are leveraging sensor and machine data (IoT) to identify patterns that can predict asset failures, possible tampering or incorrect installations or configurations. These teams have begun to share their experiences and we expect the algorithms and analytics will benefit everyone.The Tip of the IcebergOur approach to analytics initiatives reflects a common cause spirit. Several years ago, we adopted agile development methodologies, allowing us to bring together cross-functional teams and focus on delivering value incrementally. We did not anticipate the need to fundamentally change how we think about data. Many activities that we previously considered useful but not necessary for success, such as maintaining a data dictionary, starting with logical data models or analyzing data lineage, we now understand are essential practices for successful analytics programs. With these tools and techniques, our IT architects and developers can accelerate our data science efforts by enabling analytic modeling and data modeling in parallel rather than delaying analysis in the pursuit of perfect data. The result is a stronger culture of collaborative, iterative development between IT and our business partners. We are just beginning our journey with advanced analytics. We continue to adapt and adjust our old ways of thinking and working as we seek insights that will lead to actions to improve safety, efficiency, and lower costs. As AEP transforms to better meet the needs of our customers, taking full advantage of the value of data, analytics tools and techniques will help drive our success. Alberto Ruocco
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