American Electric Power 2008 Corporate Sustainability Report

2008 Corporate Sustainability Report 35 Challenges, Goals, Progress { Public Policy } Challenge Constructively work to influence the structure of a federal cap-and-trade program that does not unfairly harm the U.S. economy or customers whose electricity is derived largely from coal. Convince developing countries they must be part of the solution. Goal Creation of a federal cap-and-trade program that includes a safety valve, provides for a large free allocation of allowances and includes consequences for non-participating countries, as outlined in AEP’s climate policy. Progress All operating companies developed a plan to address this issue at the state level in an attempt to influence federal legislation to support cap-and-trade, impact allocation of carbon credits being discussed in Washington D.C. Contacts commenced in late 2007 and will continue in 2008. Lobbied successfully for financial incentives for carbon capture and storage in both the Bingaman – Specter and Lieberman –Warner climate bills. Work with Congress to provide incentives and tax breaks for advanced coal technology deployment and improve accessibility and affordability of wind energy and other renewable resources. Work with federal and state regulators to gain support for federal oversight of a national extra-high voltage (EHV) transmission system. Include incentives prior to or along with passage of a federal GHG cap-and-trade program to costeffectively address climate change. Ensure Federal Energy Regulatory Commission has oversight over EHV transmission, similar to how it regulates natural gas pipelines. Received NIETC status for entire PATH project. Made numerous presentations and published op-ed pieces in national publications outlining AEP’s vision for national oversight of EHV transmission. Clean energy bill adopted in Arkansas. Virginia S.1416 includes additional rate of return for voluntary RPS and advanced coal technology. Participated in workshop led by National Council of State Legislatures on advanced coal technologies. Gain state-level support for legislation that supports and encourages development of clean energy projects within their own jurisdictions. State legislation adopted supporting carbon capture and storage, renewables and baseload technologies. Engage in active dialogue with our customers, legislators and regulators, consumer advocates, community leaders and other interested parties to explore opportunities, implement solutions and evaluate results for programs aimed at reducing demand and/or energy. Achieve 1,000 MW reduction in demand by the end of 2012 through DSM/EE programs offered to customers and through internal operations efficiency programs. Develop plans for deployment of an advanced metering infrastructure (AMI) with the goal of installing smart meters in all our jurisdictions by the end of 2015, which we believe will enable additional programs/products that will help customers reduce/ shift their demand and reduce their energy usage. Rely upon energy efficiency and DSM for crucial roles in meeting our environmental and sustainability goals. Make DSM an important component of our Integrated Resource Plan. Secure regulatory recovery of investments for implementation of EE/DSM and AMI investments. Advocate for more stringent building codes and appliance standards in the states we serve. Adopted a public policy position on commitment to active pursuit of EE/DSM programs in all AEP jurisdictions. Implemented EE/DSM activities in the following jurisdictions: Texas (2002 - 2007): 250,842 MWh energy savings (250.8 GWH). 72,125 MW peak demand reduction. $46.2 million investment. Texas increased the target for demand growth reduction from 15 percent of projected growth to 20 percent by 2009. Kentucky (1996 - 2007): 411,212 MWh energy savings (411 GWH). 4.3 MW summer/19.8 winter peak savings. $8.7 million investment. PSO – Oklahoma: Filed in December 2007 an application seeking approval of comprehensive and cost-effective EE/DSM programs. The discovery process is ongoing. Arkansas: Initiated four programs in fall 2007 in addition to an all utility-sponsored education/ information program. Indiana: Filed for approval of programs as part of a filed rate case in January 2008. Public Policy

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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