American Electric Power 2008 Corporate Sustainability Report

48 Energy Security, Reliability & Growth Defense Council, Ceres and the American Council for Energy Efficient Economies, continue to press us for programs and ideas that result in measurable reductions. At the same time, they recognize AEP’s need for the cost of these programs to be recovered – while we recognize the value of continuing to work with these groups toward achievable solutions. As rates increase because of higher fuel prices, environmental upgrades, new plant costs and related factors, AEP expects that the appeal of these programs will increase, and that gridSMARTSM will magnify their benefits for our AEP's Transmission Operations Center, in New Albany, Ohio, is the nerve center of the nation's largest electricity transmission system. customers. We will also continue to offer traditional programs such as home weatherization, lighting upgrades and high efficiency upgrades. Our goal is to offset 1,000 MW of demand by 2012 through these efforts. gridSMART SM will help us to operate more efficiently and save energy with programs that range from installing energy management systems in our company buildings to upgrading to new transformers that reduce energy losses. We project that making these improvements to our assets would yield 150 MW of our 1,000 MW goal in demand savings and provide 600 gigawatt hours a year in energy savings by 2012. The gridSMART SM initiative also involves technology development in the areas of fuel cells, large-scale batteries and other energy technologies. No one can say with certainty how these technologies will be adopted, the rate at which they will be deployed and what their final impact will be on traditional generation systems. Among the technologies we are leaders in deploying, ers would be able to decide how much they are willing to spend to perform a particular task now, versus waiting until a lower rate is in effect. During periods of peak demand, customers might choose to cycle their air conditioning in 20-minute periods, for example, rather than run them continuously, or to turn off the pool pump for a few hours. Commercial and industrial customers could postpone energy intensive manufacturing or business operations. The same technology would also allow AEP to better manage its system. Smart meters and distribution system equipment would enable us to connect customers remotely, identify overload conditions more easily and reduce energy theft. The result would be more timely service for customers, fewer crews on the road, fuel savings and lower emissions. gridSMART would enable us to identify outages SM more quickly rather than waiting for customers to report them, and this would help us deploy repair crews sooner. gridSMART SM also incorporates more traditional energy efficiency and DSM programs, which could be implemented independently of advanced technology. Because electric prices have been so low in our service area, these programs have had little appeal among customers and regulators alike. Low prices undermine incentives to reduce consumption. Some of our stakeholders, including Natural Resources SAIFI indicates the number of sustained outages the average customer experienced during the year. SAIDI indicates the amount of time the average customer is without service due to sustained interruptions during the year, measured in minutes. Target is 186.4 SAIFI SAIDI AEP’s Systemwide Reliability Performance 2005 2006 2007 1.546 197.7 1.51 191.4 1.519 189.8

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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