aep 2011 csr

Upload: dudeman111

Post on 08-Apr-2018

228 views

Category:

Documents


0 download

TRANSCRIPT

  • 8/7/2019 AEP 2011 CSR

    1/22

    Our Board of Directors

    AMERICAN ELECTRIC POWER

    2011 CORPORATE SOCIAL

    RESPONSIBILITY REPORT

  • 8/7/2019 AEP 2011 CSR

    2/22

    You may browse through the AEP 2011

    Corporate Social Responsibility report

    at your leisure or you may skip to a

    specifc section rom this page.

    ABOUT AEP

    OUR PROGRESS, OUR FUTURE

    COMPANY OVERVIEW

    OUR BOARD OF DIRECTORS

    ENERGY SECURITY, RELIABILITY, AND GROWTH

    ENVIRONMENT

    CLIMATE CHANGE

    CONTACT AND WEBSITE INFORMATION

    2

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    < >

  • 8/7/2019 AEP 2011 CSR

    3/22

    AEP ranks among the nations largest generators o elec-tricity, owning nearly 38,000 megawatts o generating

    capacity in the U.S. AEP also owns the nations largest

    electricity transmission system, a nearly 39,000-mile

    network that includes more 765 kilovolt extra-high volt-

    age transmission lines than all other U.S. transmission

    systems combined.

    AEPs transmission system directly or indirectly serves

    about 10 percent o the electricity demand in the Eastern

    Interconnection, the interconnected transmission system

    that covers 38 eastern and central U.S. states and eastern

    Canada, and approximately 11 percent o the electricitydemand in ERCOT, the transmission system that covers

    much o Texas.

    At American Electric Power, no aspect o operations

    is more important than the health and saety o people.

    Our customers needs are met in harmony with

    environmental protection.

    AEPs utility units operate as AEP Ohio, AEP Texas,Appalachian Power (in Virginia, West Virginia), AEP

    Appalachian Power (in Tennessee), Indiana Michigan

    Power, Kentucky Power, Public Service Company o

    Oklahoma, and Southwestern Electric Power Company (in

    Arkansas, Louisiana and east Texas). AEPs headquarters

    are in Columbus, Ohio.

    Gene Campbell, transmission station

    manager, AEP Ohio.

    About AEP

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    3< >

  • 8/7/2019 AEP 2011 CSR

    4/22

    WE BELIEVE THAT RELIABLE ,SAFE, AND REASO NABLY PRICED

    ENERGY IS A KEY TO THE GLOBAL

    ECONOMIC RECOVERY.

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    4< >

  • 8/7/2019 AEP 2011 CSR

    5/22

    Our Board of Directors

    A CLIMATE OF CHANGE

    Our Progress, Our Future

    American Electric Power (AEP) will be

    an energy leader through programs and

    technologies that protect people, manage

    our impacts on the environment, promote

    energy eciency, provide or customer

    control over electricity usage and provide

    or greater access to renewable orms

    o energy and advanced clean energy

    technologies. We will work with our regu-

    lators and other stakeholders to achieve

    this through an approach that maxi-

    mizes the positive economic, social and

    environmental impacts o our operations.

    Many AEP power plants are being retrotted with emission control systems, such as these

    Cardinal units in Brilliant, Ohio.

    GLOBAL REPORTING INITIATIVE

    This report was developed according

    to the Global Reporting Initiative (GRI)

    Sustainability Reporting Guidelines Version

    3.0 (G3) and meets the content require-

    ments o Application Level A. Our GRI

    elements were reviewed by and our

    Application Level A was armed by

    GRI. Additional inormation on the GRI

    can be ound on our websitewww.

    AEPsustainability.com. We also report on

    electric utility industry-specic indicators.

    GIVE US YOUR FEEDBACK We want

    to hear rom you and we welcome your

    eedback on this report. Hearing rom our

    stakeholders helps us understand what

    concerns them. E-mail your comments to

    Sandy Nessing at [email protected].

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    5< >

  • 8/7/2019 AEP 2011 CSR

    6/22

    SERVICE TERRITORY

    MARKET PRICE (COMMON STOCK)

    $49.11

    $25.54

    $33.28$36.51

    $24.00

    $34.79

    HIGH H IGHL OW L OWY E AR-END YE A R-END

    2008 2 0 0 9

    STATISTICAL OVERVIEW

    Revenues (in billions) $ 135

    Net Income (in millions) $ 1,3571

    Earnings Per Share $ 2961

    Cash Dividends Per Share $ 164

    Service Territory 197,500 square miles

    Transmission 39,000 miles

    Distribution 215,800 miles

    Generating Capacity 38,988 MW 2

    Generating Stations More than 80

    Renewable Port folio (hydro) 364 MW3

    Renewable Portfolio (wind, solar) 1,406 MW 4

    Pumped Storage 586 MW

    Total Kilowatt-hour Sales (millions) 195,312

    Total Assets ( in billions) $ 483

    American Electric Power has been providing

    electric service or more than 100 years and

    is one o the nations largest electric utilities,

    serving 5.2 million customers in 11 states.

    1. Generally Accepted

    Accounting Principles

    2. Includes 270 MW o retired/

    decommissioned generating capacity

    3. Represents nominal capacity;

    includes 270 MW o mothballed/

    decommissioned generation, AEPs

    interest in Ohio Valley Electric Corp.,

    purchased power agreements

    and renewables

    4. Excludes pumped storage;includes owned capacity and

    purchased power

    5. Regulated wind capacity online or

    under contract

    Company Overview

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    6< >

  • 8/7/2019 AEP 2011 CSR

    7/22

    TOTAL SYSTEM ANNUAL CO2EMISSIONS (in million metric tons)

    ECONOMIC IMPACT (2009)

    AEP GENERATING CAPACITY BY FUEL

    Jobs 21,673

    Wages $19 billion

    Construction Expenses $28 billion 1

    Local Taxes $469 million

    State Taxes $3087 million

    Federal Taxes $123 million

    Goods & Services (not fuel) $43 billion

    Goods & Services from Diver se Suppliers $69 8 million

    Remain Value of All Contracts $43 billion 2

    Coal Purchased ( tons) 759 million

    Coal Average Purchase Price $50/ton

    Corporate Giving $118 million

    AEP Foundation Gr ants $113 million3

    1. All numbers are rounded

    2. Construction Expenses include

    those expenses listed in the Cash

    Flow Statement

    3. Supply chain purchased contracts

    and inventory system

    4. Includes all grants and contributions

    by utility units to support economic

    development

    900

    2005

    145.1

    2005

    275

    2005

    853

    2006

    143.9

    2006

    270

    2006

    749

    2007

    147.7

    2007

    266

    2007

    638

    2008

    148.2

    2008

    249

    2008

    457

    2009

    129.7

    2009

    121

    2009

    TOTAL SYSTEM ANNUAL SO2 EMISSIONS (in thousand U.S. tons)

    TOTAL SYSTEM ANNUAL NOX EMISSIONS (in thousand U.S. tons)

    In 2009, AEPs CO2emission decreased 12.5 percent. The

    decline in SO2and NOXemissions refects, in part, the suc-

    cess o our environmental programs.

    NA TURA L GA S / OI L22%

    NUCLE A R6%

    HY DRO, W IND, S OLA R, &

    P UMP E D S TORA GE6%

    COA L/ L IGNITE 66%

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    7< >

  • 8/7/2019 AEP 2011 CSR

    8/22

    Our Board of DirectorsOur Board of Directors

    The AEP Board o Directors has assigned the

    responsibility or monitoring and overseeing the

    companys sustainability initiatives to the Boards

    Committee on Directors and Corporate Governance.

    At two o the Committees meetings in the past

    year, the Committee and company managementreviewed the companys sustainability objectives,

    challenges, targets and progress. That Committee

    supported the integration o sustainability report-

    ing with nancial reporting and gave management

    input and guidance or the proposed approach to

    this corporate accountability report. It reviewed

    and discussed the nal text o this report beore

    recommending its approval by the ull Board

    o Directors.

    The AEP Board o Directors has received periodic

    reports both rom management and rom the

    Committee on Directors and Corporate Governance

    about the companys sustainability initiatives. Many

    o the topics in this report have been the subject

    o active discussion at Board and Committee meet-

    ings. All members o the Board received copies o

    this report beore it was published, and several

    directors made suggestions that have been incor-

    porated into the report. Following its review, and

    upon recommendation o the Committee, the Board

    o Directors adopted a ormal resolution approving

    the report. The Board believes this report is a

    reasonable and transparent presentation o the

    companys plans and perormance and o its

    environmental, social and nancial impacts. The

    Board realizes that the company must be prepared

    to make requent adjustments in response to thedicult economic and nancial challenges that the

    nation and the regions we serve are experiencing.

    The Board is committed to the companys con-

    tinuing eorts to increase its transparency and to

    its sustainability. The Board has emphasized

    to management that it will be evaluated by its

    success in executing the companys strategic plan

    to meet stakeholders and the Boards expectations,

    including being agile in responding to changing

    circumstances while respecting the commitments

    in this report.

    AEP BOARD OF

    DIRECTORS STATEMENT

    LEFT TO RIGHT: Ralph D. Crosby, Jr., Lionel L. Nowell III, James F. Cordes, Linda A.

    Goodspeed, Dr. Donald M. Carlton, John F. Turner, Thomas E. Hoaglin, Sara Martinez Tucker,

    Dr. Lester A. Hudson, Jr., Dr. Kathryn D. Sullivan, E.R. Brooks, Dr. Richard L. Sandor, andMichael G. Morris.

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    8< >

  • 8/7/2019 AEP 2011 CSR

    9/22

    DURING A T IME OF GR EATCHANGE, HAVING A STRATEGY FOR

    SUSTAINABIL ITY IS ESSENTIAL TO

    AEPS LONG-TERM SUCCESS .

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    9< >

  • 8/7/2019 AEP 2011 CSR

    10/22

    BUSINESS PERFORMANCE

    Energy Security, Reliability, & Growth

    50,000

    2

    110,000

    96

    APPROXIMATE NUMBER OF

    CUSTOMER CALLS HANDLED

    EACH DAY

    MILLION TIMES CUSTOMERS

    LOGGED IN TO CONDUCT

    BUSINESS ONLINE

    CUSTOMERS IN AEP

    OHIOS GRIDSMART

    DEMONSTRATION PROJECT

    CONSUMPTION OF NATURAL

    GAS IN BILLIONS OF CUBIC

    FEET IN 2009

    Our business is to produce electricity and

    deliver it over high-voltage power lines to

    lower-voltage lines that transport it to our

    customers. We have a responsibility to

    deliver electricity to our 5.2 million homes

    and businesses saely, reliably and cost

    eectively. While the system we operate is

    complex and aging, it is vital to the econ-

    omy and to our quality o lie.

    Demand or electricity is growing despite

    energy eciency programs, largely due to

    population growth and the rising number o

    electronic appliances, industrial equipment

    and other devices that people rely on or

    everything rom entertainment to health

    care. Although the pace o growth has

    slowed due to the recession, we must plan

    or these needs. As the demand or electric-

    ity increases, so does the expectation that

    we will deliver uninterrupted power wher-

    ever and whenever it is wanted. We invest

    signicant resources in new equipment

    and processes to meet that expectation.

    We use a variety o uels to reduce emis-

    sions and to ensure reliability. Coal is

    our primary uel because it is a low-cost,

    abundant, reliable and secure domestic

    resource that is oten located near our

    power plants. We also use nuclear, wind,

    hydro, natural gas, biomass and solar

    power to generate electricity.

    We have begun to lay the oundation to

    transorm our energy delivery system to

    lower emissions, improve eciency and

    reliability, give customers more control

    over their usage and costs, and ensure

    energy security. This oundation is being

    built through our gridSMART initiative,

    construction o power plants, diversication

    o our resources and investments in trans-

    mission and advanced coal technologies.

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    10< >

  • 8/7/2019 AEP 2011 CSR

    11/22

    Having the real-time reporting means

    I can actively monitor which items in

    my house are the worst energyconsumers and do something about

    them, right there.

    PAUL ROSS, GRIDSMART PILOT

    PARTICIPANT, SOUTH BEND, IND.

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    11< >

  • 8/7/2019 AEP 2011 CSR

    12/22

    Ensuring an adequate supply o energy at any

    given time requires determining the demand or

    power today, anticipating short-term demand in

    the days and weeks ahead, and predicting long-

    term demand in the years to come. The stakes are

    high in getting this right because o the signicant

    capital and construction costs o new power

    plants and transmission and distribution systems,

    not to mention the time it takes or siting new

    inrastructure and getting regulatory support or

    cost recovery.

    Underestimating uture demand could create

    power constraints and higher rates or customers

    as we scramble to secure power in a tight market.

    Overestimating demand could burden customers

    with paying or unneeded and underusedinrastructure. Planning or long-term generation

    is complicated by the potential or legislative and

    regulatory actions on climate change. We are

    uncertain about these possibilities and related

    uture costs. Current environmental regulations are

    also in a state o fux and could change the way we

    produce or transmit electricity.

    It is thereore dicult to determine with certainty

    whether we can meet uture demand with our own

    generation or will need a combination o our own

    generation and electricity we purchase. We aredeveloping tools that will help inorm this planning

    process. One component o our gridSMART

    initiative will allow us to evaluate our inrastructure

    needs rom the power plant to the customer meter.

    This technology, known as a virtual power plant,

    helps us to better understand what we will need i

    we are to deploy a robust smart grid system. It also

    will allow us to modernize the grid cost-eectively

    by showing us what we need or dont need.

    ENERGY SECURITY

    2009 OPERATING COMPANY EA RNINGS CONTRIBUTIONS

    OHIO P OWE R22%

    CS P20%

    I NDIA NA M ICHIGA N

    P OWE R16%

    A P P A LA CHA IN P OWE R

    COMP A NY16%

    S WE P CO9%

    T E X A S7%

    OTHE RS6%

    PS O5%

    K E NTUCK Y P OWE R2%

    We already have some generation projects under

    way that anticipate a lower-carbon uture, including

    the 600 megawatt (MW) John W. Turk Jr. ultra-

    supercritical coal plant under construction in

    southwest Arkansas, which is scheduled to be in

    service by late 2012. The plant was designed to

    allow or the uture installation o carbon capture

    and storage technology. Read more about this

    plant in the Environmental Perormance section.

    Work also continues on the J. Lamar Stall Plant,

    a 500-MW natural gas combined-cycle acility in

    Shreveport, La., that will begin operation in 2010.

    Our use o natural gas has grown; we consume

    approximately 100 billion cubic eet per year.

    Between 2005 and the end o 2010 we will have

    added more than 4,600 MW o natural gas to our

    system, urther diversiying our uel mix.

    The Federal Energy Regulatory Commission (FERC)

    granted a 30-year extension o the license or

    the Smith Mountain 586-MW pumped storage

    hydroelectric plant on the Roanoke River in Virginia

    in December 2009. The plants initial license was

    granted in 1960 and expired in March 2010. We

    worked closely with area groups, communities

    and regulators to address concerns about water

    level, shore erosion, sediment and endangered

    species. Hydro-electric power is an important part

    o our resource base; we operate 16 hydroelectricplants plus Smith Mountains pumped storage

    acility on six rivers in ve states, generating

    approximately 1,549-gigawatt hours (GWh) each

    year. Approximately 940 GWh o that is ree o

    carbon emissions.

    $3,914

    2007

    $3,522

    2006

    $3,852

    2008

    $2,393

    2009

    $2,044

    2010

    $1,961

    2011

    UTILITY CAPITAL INVESTMENTS (in millions)

    Utility Capital Investments or 2010 and 2011 are estimated.

    12

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    < >

  • 8/7/2019 AEP 2011 CSR

    13/22

    Our electric generation and delivery systems must

    be modern, reliable and able to handle diverse

    uels and technologies. They also must be able to

    keep up with customer demand. Overall reliability,

    as recorded by the average number and duration

    o sustained outages on our distribution system,

    improved systemwide in 2009. SAIFI, the average

    number o interruptions a customer experiences,

    declined to 1.369 in 2009 compared with 1.507

    in 2008. SAIDI, the average number o minutes o

    each outage, also decreased, to 187.3 rom 211.1

    in 2008.

    Rather than ocusing on single-year numbers, we

    have begun using a three-year rolling average,

    which evens out weather-related outages. We

    believe this is a more meaningul measure thatbetter refects changes in the overall status o the

    system. The three-year SAIFI average was 1.470 in

    2009, compared with 1.526 in 2008. The SAIDI

    average in was 198.1 in 2009 versus 201.0 the

    previous year.

    Distributionthe inrastructure and the pro-

    cesses that deliver electricity rom high-voltage

    transmission lines to customers homes and busi-

    nessescontinues to improve as we develop better

    tools and processes to manage our system. Several

    challenges remain, however.

    ENERGY RELIABILITY

    AEP is more than 100 years old, and many o our

    assets are at or near the end o their useul and

    depreciable lie. For example, we have more than 5

    million distribution poles in service, some o which

    are more than 40 years old, increasing the likeli-

    hood o ailure when stressed by wind, snow or ice.

    To prevent this, we have a pole inspection program

    to continually evaluate the status o all distribution

    poles. In addition, 21 percent o our distribution

    station power transormers and 22 percent o our

    distribution line transormers are beyond their

    expected operational lie. New, higher eciency

    equipment is available that we will use to begin

    replacing these aging assets while also achieving

    demand and energy eciency goals.

    Our generation and transmission businesses acesimilar challenges as equipment ages. We conduct

    regular operational risk audits in our Generation

    business unit to assure equipment reliability, as

    well as inspecting, testing and monitoring equip-

    ment. However, at no time are we compromising

    saety and health. We also ormed an aging asset

    task orce to develop a long-term plan to address

    the issue in each state in our ser vice territory.

    New tools and processes enhance our ability to

    manage the system. For example, we began using

    a Line Equipment Analysis Device (LEAD), anelectronic snier developed in our own labs, that

    detects intererence caused by cracked insula-

    tion or other dicult-to-detect ailures. Combined

    with GPS technology, this allows crews to check

    the status o equipment more easily and accu-

    rately by driving along our lines. The LEAD can

    nd electrical leaks that the human eye cannot,

    providing us with advance warning about potential

    imminent ailure.

    2 00 5 20 06 20 07 2 00 8 20 09

    SAIFI1 1.502 1.527 1.547 1.526 1.470

    SAIDI2 210.8 202.9 198.9 201.0 198.1

    THREE-YEAR AVERAGE ROLLING RELIABILITY PERFORMANCE

    1. System Average Interruption Frequency Index is the average number o

    interruptions a customer experiences

    2. System Average Interruption Duration Index is the average outage duration or

    each customer served

    13

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    < >

  • 8/7/2019 AEP 2011 CSR

    14/22

    I NDUS TRIA L30%

    COMME RCIA L27%

    2009 RETAIL LOAD

    RE S IDE NT IA L32%

    WHOLE S A LE *11%

    * Wholesale includes sales tomunicipal and cooperative power

    systems, other wholesale, and

    miscellaneous retail sales

    AEP remains committed to developing an extra-

    high voltage transmission superhighway that

    would acilitate the movement o power among

    regions o the country. This system would reduce

    congestion and costs and enable the transmission

    o renewable power such as wind and solar rom

    where it is generated to where it is needed. We

    believe that widespread use o renewable energy

    depends on the ability o the transmission system

    to transport it.

    One way we are tackling this is through a col-

    laborative eort to develop a master plan or

    transmission that supports the development o

    renewable energy in the Midwest and enables its

    delivery to consumers within the study area. In the

    all o 2009, Electric Transmission America (ETA),a joint venture between AEP and MidAmerican

    Energy Holdings Co., along with ve other utilities

    and transmission operators, began a compre-

    hensive study o the transmission system in the

    upper Midwest. Called the Strategic Midwest Area

    Transmission Study, it will identiy the transmission

    needed to enable the harvesting o the vast clean

    energy resources in areas such as Minnesota, the

    Dakotas and Iowa. Phase 1 o the study has been

    completed; it recommends three alternatives or

    urther study. Phase 2 will measure the economic

    and societal benets and is anticipated to becompleted later this summer.

    The sponsors o the study believe that an EHV

    transmission network in the upper Midwest will

    provide signicant economic, environmental and

    reliability benets by ensuring access to new gen-

    eration sources and strengthening the transmission

    system in the heart o the nation. This study is part

    o a process we started in 2008 to develop an EHV

    transmission system in that region.

    ENERGY GROWTH

    We ormed a wholly owned transmission company

    to acilitate capital investment within our service

    areas. The AEP Transmission Co. (AEP Transco)

    will construct, own and operate only new transmis-

    sion assets. By setting up a separate company with

    its own capital structure, we will relieve some o

    the nancing burden on our operating companies

    because the transmission company ultimately will

    be able to nance transmission projects on its

    own. The transmission company already has led a

    proposed rate structure with the FERC.

    AEPs Transco is just one part o a three-part

    transmission strategy. We have entered into sev-

    eral joint ventures with other utilities, including

    two joint ventures with MidAmerican Energy, ETA

    and Electric Transmission Texas (ETT), to build

    transmission. Although the Potomac-Appalachian

    Transmission Highline project, a joint venture with

    Allegheny Energy, had led permits with Maryland,

    West Virginia and Virginia or permission to build

    the line, we withdrew the Virginia request in January

    2010 based on new inormation rom the regional

    transmission operator, PJM Interconnection.

    The grid operator said that preliminary studies

    showed the line would not be needed in 2014, as

    originally planned, because o reduced demand

    brought on by the recession and energy eciency

    projects. We plan to resubmit the request when the

    results o PJMs ormal planning process warrant

    the line.

    14

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    < >

  • 8/7/2019 AEP 2011 CSR

    15/22

    BY WORKING TOGE THER TODAY WE

    CAN CHAN GE THE WAY WE W ILL

    PRODUCE AND USE ELECTRICITY

    IN THE FUTURE.

    15

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    < >

  • 8/7/2019 AEP 2011 CSR

    16/22

    ENVIRONMENTAL PERFORMANCE

    Environment

    4

    181

    21

    43%

    NUMBER OF AEP FACILITIES

    THAT ARE LEED CERTIFIED

    MILLION GALLONS OF

    WATER /YEAR USED FOR ASH

    HANDLING AT COAL PLANTS

    NUMBER OF

    ENVIRONMENTAL AUDITS

    PERFORMED IN 2009

    LAND OWNED BY AEP

    SUBSIDIARY COMPANIES

    COVERED BY FORESTS

    AEP produces and delivers an energy

    resource that is essential to society. Our

    success is measured by our ability to meet

    customers energy needs while making a

    prot, doing it responsibly, with respect

    or the environment, in compliance with all

    laws and regulations, and by engaging with

    those who have a stake in our business. We

    believe that our environmental perormanceoverall is excellent, but we know there is

    room or improvement.

    Our $5.4 billion program to retrot many

    o our coal-red power plants with environ-

    mental controls is already having signicant

    positive impacts on our perormance and

    the environment. Today, our sulur dioxide

    (SO2) and nitrogen oxide (NOx) emissions

    are at their lowest levels in two decades.

    These reductions refect our compliance

    with the Clean Air Act (CAA) Title IV regula-

    tions, the NOx State Implementation Plan

    Call and the Clean Air Interstate Rule.

    Environmental regulation is in fux: the U.S.

    Environmental Protection Agency (EPA) is

    reviewing or rewriting several key regula-

    tions pertaining to air emissions, water

    quality and waste storage and disposal.

    Many potential changes are aimed directly

    at coal-red power plants and could

    adversely aect our net income, nancial

    position and the cost o electricity.

    I, or example, emission limits become

    more restrictive, or i additional substances

    are regulated, we would ace signicant

    additional costs. We have obtained cost

    recovery or our environmental program

    so ar, and we expect we would continue

    to be allowed to do so i new government

    mandates are imposed.

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    16< >

  • 8/7/2019 AEP 2011 CSR

    17/22

    Oten one o the most challenging

    parts o my job is trying to explain to

    employees why we do what we do inregard to various environmental rules

    and regulations.

    GINGER MACKNIGHT, ENVIRONMENTAL AND

    LAB SUPERVISOR, PHILIP SPORN PLANT

    17

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    < >

  • 8/7/2019 AEP 2011 CSR

    18/22

    ENVIRONMENTAL PERFORMANCE

    Climate Change

    6 %

    130

    66%

    2%

    GENERATING CAPACITY

    FROM RENEWABLE ENERGY

    MILLION METRIC TONS OFCO

    2EMISSIONS IN 2009

    GENERATING CAPACITY

    FROM COAL

    SF6

    EMISSIONS RATE OF

    TOTAL SYSTEM CAPACITY

    IN 2009

    For more than 100 years, AEP has

    produced low-cost electricity by burning

    coala plentiul, domestic and cost-

    eective source o energy. Coal-red

    electricity has played a vital role in

    expanding the American economy, creating

    well-paying jobs and assuring the saety,

    health and well-being o our customers.

    Nearly hal o the nations daily electricitycomes rom coal. We rmly believe that

    coal will continue to be a signicant

    component o Americas energy mix or the

    oreseeable uture.

    At the same time, we recognize that the

    carbon dioxide (CO2) emissions created

    through the combustion o ossil uels,

    including coal, are a matter o concern. The

    AEP system includes the largest portolio

    o coal-based generation in the United

    States, so we have a responsibility to lead

    our industry in proactively addressing

    this issue. We are doing so through our

    investments in clean-coal technology and

    carbon osets and in our vocal support or

    responsible ederal legislation, including

    cap-and-trade policies.

    We are leading in terms o our measurable,

    voluntary eorts to reduce our carbon

    emissions and use more renewable uels,

    and through our eorts to modernize the

    electric grid, put more control o energy

    use in consumers hands, and increase

    energy eciency.

    We expect the makeup o our generationportolio to change in response to several

    external actors, including global climate

    change. The number o coal-red units we

    operate in the uture will be determined

    by new or more stringent environmental

    regulations; greater potential use o natural

    gas, including shale gas; the age and

    eciency o some o our coal units; and

    the outcome o the climate change debate.

    The transition to other uel sources will

    take time and will be expensive, but we are

    preparing or it. The actions that we take

    today will determine how well we meet this

    challenge.

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    18< >

  • 8/7/2019 AEP 2011 CSR

    19/22

    When the United States develops

    legislation or regulations that require a

    reduction in CO2 emissions, there is nodoubt in my mind that CCS will be an

    integral part o compliance or the coal-

    fred power generation industry. While

    efciency improvements to the power

    generation process can take us part o

    the way toward a lower carbon ootprint,there will be no substitute or advanced

    CCS technology deployment.

    GARY O. SPITZNOGLE, MANAGER OF IGCC

    AND GAS PLANT ENGINEERING

    19

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    < >

  • 8/7/2019 AEP 2011 CSR

    20/22

    THE MEN AND WOMEN OF AEP ARE

    MOVING FORWARD. WE INVITE

    YOU TO JO IN US .

    20

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    < >

  • 8/7/2019 AEP 2011 CSR

    21/22

    CONTACT US

    VISIT OURSUSTAINABILITY WEBSITE

    by mail

    AMERICAN ELECTRIC POWER

    1 RIVERSIDE PLAZA

    COLUMBUS, OH 43215

    micro-site

    http://grdedev.erris.edu/~drieseb/grde320/aepsustainability

    iphone app

    http://grdedev.erris.edu/~drieseb/grde320/aepsustainability/iphone.html

    by phone

    1 (614) 716-1000 OR

    1 (800) 277-2177 (24 HOURS)

    or online

    http://www.aep.com/contact/

    21

    2011 AEP CORPORATE SOCIAL RESPONSIBILITY REPORT

    < >

  • 8/7/2019 AEP 2011 CSR

    22/22