American Electric Power 2008 Corporate Sustainability Report

42 Climate Change • Offsetting 0.2 million ton of CO2 emissions from our mobile fleet and aircraft. We achieved this goal in 2007 and we took steps to increase the number of hybrid electric vehicles in our 11,000-vehicle fleet. Of 542 light-duty vehicles planned for purchase in the coming year, 31 percent will be hybrid or flex fuel. We remain committed to our post-2010 climate change strategy in terms of the overall goals, but our recent experiences demonstrate the need for flexibility in how we can achieve them in a cost-effective manner. Some of the many tactics we are using to reduce our carbon footprint are described in more detail below. ENERGY EFFICIENCY & DSM and Texas, have recently initiated several programs in Arkansas, and have requested approval for programs and related cost recovery in Oklahoma and Indiana. As part of our gridSMARTSM initiative we will begin approaching regulators, customers and other stakeholders in the remaining states we serve. (For a state-by-state review of energy efficiency programs and actions in AEP’s service territory, see www.AEP.com/cr/energyefficiency.) Energy efficiency strategy must go far beyond changseeks to put consumers in coning light bulbs and rebates. Our gridSMARTSM initiative trol of electricity usage by giving them the information about when energy is at peak demand, and when there is excess capacity in the system – and enabling them to adjust their usage accordingly. Facilitating informed decisions by our customers will help us reduce the number and length of outages, improve service and postpone the need for new generation. (Read more about gridSMARTSM in the Energy Security, Reliability & Growth section.) Overall, our philosophy on demand-side efficiency is to help our customers understand the true value of electricity, in the belief that they will be motivated to change how they use it – and be more likely to embrace technologies and rate structures that encourage energy conservation. Many of our stakeholders, including customers, employees and regulators, agree with this philosophy and we will continue to work with them to make it not just a philosophy but a reality. RENEWABLE ENERGY AEP is committed to pursuing energy efficiency and DSM programs in all of the states in which we operate. We believe these programs should be an important part of our Integrated Resource Plan. The challenge is that we have some of the lowest electricity rates AEP has good intentions but is bumping up against challenges it didn’t see coming or knows how to address. It felt like you just shrugged your shoulders and moved on. We have to look at unintended consequences and we want to know that AEP is at the table on these policy issues. “ ” Laura Belleville, Appalachian Trail Conservancy, referring to unforeseen challenges. in the country, making it difficult for such programs to pass the “cost-effectiveness” tests that can motivate behavior changes. Reasonable cost recovery is an issue for us, too, in some jurisdictions. We support greater consistency across supply-side and demand-side cost recovery treatment but continue to face a regulatory preference for supply-side investments in many states. Much to the frustration of some stakeholders, we previously did not have a clearly defined policy on energy efficiency. In 2007, therefore, we clarified our policy and developed a strategy (through our gridSMARTSM initiative) to take us beyond traditional energy efficiency and DSM programs. We fully support programs that result in additional conservation and reduction – critical components in addressing climate change. We have ongoing programs in Kentucky Many consumers are clamoring for clean, renewable energy. We are working to expand the options we can offer our customers and help our states meet their clean energy goals. For example, AEP Ohio’s Green Pricing Option program en- http://www.AEP.com/cr/energyefficiency

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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