American Electric Power 2008 Corporate Sustainability Report

12 Environmental Performance AEP’s underground storage tank (UST) operations are a good example of our proactive approach to compliance. We own and operate more than 230 USTs that contain large amounts of gasoline, diesel fuel and oil. We inspect them, perform leak detection tests and maintain the tanks on a regular basis. In the last three years, there were 59 routine regulatory inspections with no enforcement actions. AIR QUALITY ISSUES AEP NSR Settlement Facts—By the Dollars • $4.6 billion settlement. • $15 million for civil penalty. • $1.6 billion estimated cost for additional emissions control equipment. • $36 million for environmental projects coordinated with the federal government. • $24 million to eight states for environmental mitigation. • $2.2 million in attorneys’ fees. • Balance for ongoing plant retrofits. AEP’s program to install emissions-reduction controls on existing power plants was the largest within the electric utility industry in 2007 in terms of capital investment and construction. Through this program we installed and brought online pollution controls to reduce sulfur dioxide (SO2) emissions on 3,500 MW of generation. Controls to reduce nitrogen oxide (NOx) emissions began operating on 1,600 MW of generation. We have completed more than two-thirds of our $5.4 billion investment program to reduce airborne emissions from our coal-fired power plants to comply with the federal Clean Air Interstate Rule (CAIR) and the recently-vacated Clean Air Mercury Rule. This program significantly reduces emissions and provides compliance with more stringent environmental requirements while allowing these low-cost facilities to continue to meet our customers’ needs for energy. AEP’s court-approved settlement of the New Source Review (NSR) litigation provides us with additional opportunities to reduce our power plant emissions. The complaint by the U.S. EPA and others alleged that AEP had made major modifications at some of its coal-fueled generating units without obtaining the necessary permits and without installing controls required by the Clean Air Act to reduce emissions of SO2, NOx and particulate matter. The settlement encompasses all of the environmental retrofits we have already completed as well as those we have planned, while providing for additional controls at our Rockport Plant in Indiana. We also agreed to annual SO2 and NOx emissions caps on our 16 coal-fueled power plants in Indiana, Kentucky, Ohio, Virginia and West Virginia. As part of the NOx reductions, AEP will operate its selective catalytic reduction systems (SCRs) year-round on generating units at three of our eastern coal plants starting in 2008. SCR equipment is currently operated to reduce NOx emissions only during the May through September ozone season. Additional environmental controls will be added to several other plants by 2019 as part of the CAIR compliance program. AEP's Annual Emissions Profile (SO2 and NOx in kilotons, CO2 in million metric tons) SO2 & NOx 1,200 1,000 800 600 400 200 (ktons) 2005 2006 2007 CO2 180 160 140 120 100 80 60 40 20 (MMtons) • SO2 In 2007, AEP's CO 2 emissions increased 2.8 percent while electricity demand grew 3.6 percent. The decline in SO 2 emissions reflects the success of our environmental programs. • NOx • CO2

Table of Contents Feed for the Digital Edition of American Electric Power 2008 Corporate Sustainability Report

American Electric Power 2008 Corporate Sustainability Report Contents Leadership, Management & Strategy A Message from Michael G. Morris A Message from Dennis E. Welch About This Report Environmental Performance Work Force Issues Public Policy Climate Change Energy Security, Reliability & Growth Stakeholder Engagement Glossary GRI Table of Contents

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