American Electric Power 2008 Corporate Sustainability Report

32 Public Policy with carbon stocks, such as safe underground storage and enhanced oil recovery. ENERGY EFFICIENCY & DSM effective programs as a key component of our climate strategy as a resource to keep energy costs affordable, and as a way to potentially delay the need for new power plants. We have modified our policy on energy efficiency and DSM to reflect this commitment. One major challenge in this new environment is the difference of opinion among our stakeholders. While some groups advocate for more aggressive programs, our commercial and industrial customers tend to see higher rates as the difference between turning a profit and operating at a loss – or even being forced out of business. It is an example of the tension that exists between those who want us to implement new programs, ahead of regulations, and those who don’t want to pay for programs that benefit others. AEP has set a self-imposed goal of reducing demand by 1,000 MW by 2012 through customer programs and internal energy efficiency improvements. Each program will Energy efficiency and DSM programs have long been used by the utility industry and regulators to encourage energy conservation and thereby reduce the need to build new power plants. Because AEP has been a low-cost provider, our customers and regulators have been comparatively slow to embrace these programs as cost-effective. While they may agree in principle with the goal of energy conservation, low prices reduce the financial incentives to act quickly. More recently, however, increasing fuel prices, escalating new generation costs, new greenhouse gas concerns and the availability of new technology have combined to bring greater interest and attention to energy efficiency and DSM programs in our 11 states. AEP has embraced costPrices for All Retail Customers (2006, in cents per kWh) What AEP’s retail customers pay versus the average cost of electricity in AEP states: Arkansas – 6.99¢ SWEPCO – 6¢ Louisiana – 8.30¢ SWEPCO – 6¢ Oklahoma – 7.30¢ PSO – 7¢ Texas – 10.34¢ SWEPCO – 6¢ AEP Texas Central – 11¢ AEP Texas North – 12¢ 8.14¢ Indiana – 6.46¢ I&M – 5¢ Kentucky – 5.43¢ Kentucky Power – 5¢ Michigan – 8.14¢ I&M – 6¢ Ohio – 7.71¢ CSP – 7¢ Ohio Power – 6¢ 5.04¢ 5.43¢ 6.86¢ 6.46¢ 7.30¢ 6.99¢ 7.71¢ 10.34¢ 8.30¢ 6.97¢ Tennessee – 6.97¢ APCO – 5¢ Virginia – 6.86¢ APCO – 5¢ West Virginia – 5.04¢ APCO – 5¢ AEP Wheeling Power – 4¢ (APCO) Appalachian Power, (CSP) Columbus Southern Power, (I&M) Indiana Michigan Power, (PSO) Public Service Company of Oklahoma, (SWEPCO) Southwestern Electric Power Company. Source: Energy Information Administration, State Electricity Profiles, November 2007

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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