American Electric Power 2008 Corporate Sustainability Report

2008 Corporate Sustainability Report 49 GENERATION M U LTI- FAM ILY H O U SING SINGL E - FAM ILY HOMES COMMERCIAL / IND U STR I A L ENERGY DELIVERY SUBS TATION By providing real-time information about costs and usage to customers, gridSMART SM will encourage energy conservation and better use of resources. U TIL ITY O F F IC E S as discussed in last year’s report, are sodium sulfur or NAS batteries, which can be deployed to support local circuits and take the strain off substations nearing capacity load. These batteries can support megawatt-sized loads for hours in the event of an outage. Their steady supply of power also helps offset power quality issues. They can delay the need for expensive substation upgrades for years, facilitating a better prioritization of capital. Once station upgrades have been completed, the batteries are easily moved to a new location. AEP installed its first megawatt-scale NAS battery in 2006 and ordered three two-megawatt NAS batteries in 2007, which will be delivered and deployed this year. We expect to have 25 megawatts of NAS batteries in place by the end of 2010. Another technology with significant potential to reshape the utility business is the plug-in hybrid electric vehicle, or PHEV. We are working with the major auto manufacturers to determine their likely rate of adoption. General Motors, Ford and Toyota have announced plans to introduce PHEVs, which will recharge from 110-volt circuits, before or in 2010. Plug-in electrics have the potential to significantly alter utility load profiles. The utility industry goal is to en- courage customers to recharge at night, when demand is lower and capacity is available. More importantly, PHEVs can improve the nation’s environmental profile. PHEVs eliminate automobile greenhouse gas emissions, which are a major contributor to greenhouse gas levels worldwide. Power plant emissions will increase, which will offset some of those gains. However, power plant emissions come from much fewer sources and are concentrated, which makes them easier to capture. As described earlier, AEP and others are developing technologies to capture carbon dioxide from coal plants. All of these elements are part of gridSMART SM. Deploying the technology will vary by state and is subject to regulatory approval and cost recovery. Each of our operating companies will develop plans to roll out these technologies and will work with their regulators on cost recovery. To support the gridSMARTSM effort, AEP and the General Electric Co. agreed in 2007 to jointly develop and deploy equipment and technology programs. The agreement calls for two pilot programs to be conducted in two midsized cities to test the equipment and customer response. Those cities have not yet been identified. A small pilot program will be conducted in Indiana as part of a settlement Energy Security, Reliability & Growth

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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