American Electric Power 2008 Corporate Sustainability Report

40 Climate Change chilled ammonia process that we are developing in conjunction with Alstom and RWE (a German utility) at our Mountaineer Plant in West Virginia. The Mountaineer Plant pilot project, on which we are collaborating with Battelle, would capture up to 100,000 metric tons of CO2 per year, which would be stored underground in deep saline aquifers. Once the chilled ammonia technology is validated our plan is to deploy it on a commercial scale at a plant in our western service territory, delivering the captured CO2 for use in enhanced oil recovery. This will help the region to recover its natural resources and will defray the high costs of carbon capture technology. We are piloting the second GHG reduction technology, an oxy-coal combustion process, with 16 other utilities on a 10-MW scale to verify feasibility and understand the commercial issues. If it proves feasible, we plan to retrofit an existing 150-600 MW unit by 2020. It would result in the capture of 3,000 or more tons of CO2 per day. There is increasing pressure for new coal plants to employ these full-scale carbon capture and storage technologies from the start. We feel this is an unrealistic expectation that could delay bringing the technology forward to full commercial scale. We are pushing the technology forward as fast as we can. In the meantime, we are facing a growing demand for energy – one that cannot be met without near-term construction of new plants. INTEGRATED GASIFICATION COMBINED CYCLE (IGCC) In its testimony supporting AEP’s West Virginia IGCC plant, the Clean Air Task Force said: unusual for an environmental “It is to support construction of a new group coal power plant. Current projections indicate that coal-fired electricity generation will continue to grow in importance, however, over the next several decades. In fact, recent analysis by the United States Climate Change Science Program indicates that global coal-based electricity generation could double or even triple by the year 2050. Advanced technology will be vital to ensuring that such rapid growth does not threaten the world’s environment. In particular, coal gasification, a process in which the energy stored in coal can be put to productive use while rendering coal’s impurities more benign, offers a way to bring coal use into the twentyfirst century without sacrificing the environment or the economy. ” support adding carbon capture to these plants. We are prepared to go forward with regulatory aspects of such an action when the economics of this technology become clearer. The promise of bringing IGCC technology to commercial operation gained momentum in 2007 when Indiana regulators approved a similar proposal by Duke Energy to build a 630-MW IGCC plant – bucking a nationwide regulatory trend against coal-fueled power plants. Although IGCC plants are more expensive than conventional pulverized coal plants, they are considered to be more compatible with carbon capture technology and have fewer negative impacts on the environment. One stakeholder, the Clean In West Virginia, the Public Service Commission approved our 629-MW IGCC plant; we are appealing a negative decision from the Virginia State Corporation Commission. We are ready to begin construction when all approvals are in hand. The plant, estimated to cost $2.23 billion and take up to 48 months to build, would be built in West Virginia but serve customers in two states – West Virginia and Virginia. A second IGCC plant proposal in Ohio has regulatory support but faces legal challenges. The Ohio Supreme Court in March ruled against AEP and returned the case to the Public Utilities Commission of Ohio. Some of our stakeholders

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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