American Electric Power 2008 Corporate Sustainability Report

2008 Corporate Sustainability Report 41 Air Task Force, supported the Duke proposal and is publicly supporting AEP’s proposed plant in West Virginia. For more information about these technologies, please visit www.AEP.com/cr/technologies. FUEL DIVERSIFICATION Through 2007, we have reduced or offset 43 million metric tons of CO2 , and we are on track to meet our commitment. We have done so by improving the efficiency of existing plants; retiring older, inefficient units; substantially reducing the leakage rate of sulfur hexafluoride (SF6) – a potent GHG – from transformers; increasing renewable energy resources; and conserving trees and reforested lands in the United States and abroad. For the future, we have planned improvements to our existing power plants that will further reduce GHG emissions by more than 400,000 tons per year by 2010. We outlined our post-2010 strategy in our first Corporate Responsibility Report and predicted our emissions would grow by as much as 10 million to 15 million tons annually between 2011 and 2020 as we build power plants. We committed to offset CO2 emissions by an additional 5 million tons annually through offsets, as follows: • Purchasing an additional 1,000 MW of new wind power by 2011 and adding some of it in our eastern states. In 2007 we signed agreements to buy 275 MW of wind energy that will serve customers in Indiana, Michigan, Virginia and West Virginia. In January 2008 we began receiving delivery of the first 75 MW of wind-generated power. • Investing in domestic offsets. AEP signed an agreement in 2007 with the Environmental Credit Corp. to purchase 4.6 million carbon credits (one carbon credit is equal to reducing one metric ton of CO2) between 2010 and 2017. The credits would be created by capturing and destroying methane on 200 U.S. livestock farms, at least half of which will be within our 11-state service territory. The first two manure “lagoons” to capture methane were completed on a farm in upstate New York in December. These credits will offset 0.6 million metric ton of CO2 between 2011 and 2017. • Increasing our investments in domestic offsets, including forestry, between 2011 and 2020. As described in the offsets section that follows, investments in new forestry projects have been hampered by the conversion of lands to grow crops, often for biofuels. In addition to developing new coal technologies, we are increasing the diversity of the fuels we use to produce electricity. Today, 68 percent of our energy comes from coal. We have not yet determined what the right percentage is, but actions we have taken will drive it lower and develop a more diverse electricity supply. We are building or buying more natural gas-fired plants to meet peak demand periods, such as the summer cooling season. Natural gas units emit about half the CO2 compared with similarly-sized coal units. However, natural gas is subject to price volatility and supply issues. In 2007, AEP added 12 gas units with a total capacity of 2,020 MW. These plants will emit approximately 8 million metric tons of CO2 during the next decade, based on projected demand, compared with 16 million metric tons for the equivalent coal-fired production. OUR COMMITMENT TO REDUCE EMISSIONS As a founding member of the Chicago Climate Exchange in 2003, AEP committed to cumulatively reduce or offset 46 million metric tons of carbon dioxide (CO2) by 2010. 2006 U.S. GHG Emissions (million metric tons) Other GHGs (3,591) Methane (605) Nitrous Oxide (379) High-GWP Gases* (158) Electric Power Sector Carbon Dioxide (2,344) * High global warming potential gases Source: Energy Information Administration, November 2007 Climate Change http://www.AEP.com/cr/technologies

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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