GE Energy's VFT Technology Chosen by AEP for Texas Grid Reliability Project

ATLANTA, GA.-August 31, 2006-American Electric Power (AEP) has selected GE Energy's Variable Frequency Transformer (VFT) technology to maintain grid reliability in the Laredo, Texas area along the United States border with Mexico. The VFT will establish an asynchronous transmission link between AEP's Texas Central Company (TCC) and Mexico's Comisión Federal de Electricidad (CFE).

Under terms of the agreement, GE Energy will design, manufacture and commission the 100-megawatt VFT, which will be installed at the Laredo Substation. The project is in support of the reliability must run exit strategy for the Laredo Power Station, endorsed by the Electric Reliability Council of Texas (ERCOT), to maintain reliable transmission of power within south Texas to Laredo.

The AEP project is a reliability-driven application for the VFT and is expected to be available for commercial operation in May 2007.

GE Energy's VFT technology provides a controlled transmission path between the ERCOT and CFE electrical grids, permitting power exchanges that previously were impractical due to asynchronous boundaries.

The VFT technology enhances grid stability for both the Texas and Mexican power systems and will be used to provide emergency support in addition to the transactional transfer of power. AEP believes the VFT will prove economical for ERCOT due to its capability for maintaining system security with lower energy imports from CFE than those required by other asynchronous technologies.

Although the VFT concept is relatively new, the VFT itself is comprised of well-established hydro-generator, motor and variable-speed drive technology. It consists of a rotary transformer that provides a continuously controllable phase shift for any angle, and a drive system and control that adjust the angle and speed of the rotary transformer to regulate power flow. The individual, 100-megawatt VFT channels can be combined in increments to meet a particular load situation.

"GE Energy's VFT technology provides an innovative alternative to back-to-back high voltage direct current converters by allowing customers to control power between two asynchronous grids with less risk than with conventional technologies," said Dan Heintzelman, president of GE Energy's services business. "We look forward to working with AEP on this important project which will help to efficiently maintain grid reliability in the Laredo area."

The VFT at TCC's Laredo Substation is the second VFT provided by GE Energy, the first being a development project with TransEnergie, Hydro Québec's transmission division, at its Langlois Substation in Québec.

American Electric Power owns more than 36,000 megawatts of generating capacity in the United States and is the nation's largest electricity generator. AEP is also one of the largest electric utilities in the United States, with more than five million customers linked to its 11-state electricity transmission and distribution grid.

About GE Energy
GE Energy ( is one of the world's leading suppliers of power generation and energy delivery technologies, with 2005 revenue of $16.5 billion. Based in Atlanta, Georgia, GE Energy works in all areas of the energy industry including coal, oil, natural gas and nuclear energy; renewable resources such as water, wind, solar and biogas; and other alternative fuels. Numerous GE Energy products are certified under ecomagination, GE's corporate-wide initiative to aggressively bring to market new technologies that will help customers meet pressing environmental challenges.

For more information, contact:
Dennis Murphy
GE Energy

Gina DeRossi or Howard Masto
Masto Public Relations
Tel: 518 786 6488

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