Venture Created to Help Firms Deal With Fluctuations in Power

American Electric Power Co., which owns utilities in seven states, formed a joint venture with construction company Bechtel Group Inc. and Siemens aimed at helping businesses avoid problems caused by power-supply fluctuations.

The venture, Lectrix, would guarantee its services by compensating customers if a power surge or a rapid drop in voltage disrupts production or damages equipment. Lectrix initially would target semiconductor makers and data centers.

U.S. companies lose $26 billion a year from production disruptions and equipment repairs that stem from voltage problems, the companies said. A shutdown can cost as much as $500,000 an hour.

Lectrix, to be based in San Francisco, also would help customers buy power from low-cost producers by easing constraints that make it difficult to move electricity over transmission lines.

Columbus, Ohio-based American Electric Power is the largest U.S. producer of coal-fired electricity. It has 3 million customers in Ohio, Indiana, Michigan, Tennessee, West Virginia, Virginia and Kentucky.

Closely held Bechtel, based in San Francisco, is the second-largest U.S. construction company. Siemens, based in Munich, Germany, makes everything from lightbulbs to power plants. Its Raleigh, N.C., unit, Siemens Power & Distribution Inc., will oversee its Lectrix stake.

AEP shares fell 16 cents to close at $31.59 on the New York Stock Exchange.