AEP : Corporate Citizenship : Corporate Responsibility Report : Challenges, Goals, Progress

Climate Change

Challenge

Reduce or offset approximately 46 million metric tons of carbon dioxide equivalent emissions between 2003 and 2010, in spite of uncertainty how these voluntary reductions will be treated under federal climate legislation.

Goal

Meet our CCX commitment through 2010 through a broad portfolio of actions:

Power plant efficiency improvements.
Renewable generation.
Off-system GHG reduction projects, including forestry.
Direct purchase of emission credits through CCX.

Progress

Through 2007, reduced or offset CO2 emissions by approximately 43 million metric tons through power plant efficiencies.

Completed purchase agreement for 4.6 million carbon credits between 2010-2017 from methane capture from livestock.
Did not meet forestry goal due to competing interests for land that made it inefficient and too costly.

Challenge

With no further actions, AEP’s emissions will increase by approximately 10 million to 15 million metric tons between 2010 and 2020, as new generating plants come online.

Goal

Implement our post-2010 strategy to reduce carbon dioxide equivalent emissions by approximately 5 million metric tons per year:

Bring new carbon capture and storage technology to commercial operation.
Invest in other advanced coal technologies, including IGCC and USC.
Increase renewable energy.
Invest in a range of offsets, including methane capture and forestry.
Implement EE/DSM programs to reduce consumption.
Make efficiency improvements to power plants and retire less efficient, older plants.
Offset corporate mobile fleet and aircraft emissions.

Progress

Signed three long-term power agreements for 275 MW wind; 75 MW online January 2008 with remainder scheduled to be online December 2008.

Mountaineer chilled ammonia carbon capture and storage (CCS) project expected to begin operation in 2009.
Commercial operation of CCS at a power plant likely to begin in 2012. This project will reduce emissions by 1.5 million metric tons per year.
Arkansas and Louisiana regulators gave conditional approval to USC plant; Texas approval pending. Oklahoma regulators rejected second USC plant.
Proposed IGCC plant in West Virginia approved (decision pending in Virginia); legal challenge to Ohio IGCC sent back to PUCO.
Identified efficiency improvements to power plants to potentially reduce CO2 emissions by 1.1 million tons per year, after 2015.
31 percent of 542 new light-duty vehicles ordered for 2008 are hybrid or flex fuel.
Reduced mobile fleet emissions, including aircraft, through carbon credits.

Challenge

Implement cost-effective energy efficiency and DSM programs that motivate customers to reduce energy consumption.

Goal

Collaborate with stakeholders to bring cost-effective EE/DSM programs to regulators, resulting in both MW and MWh reductions, delaying demand for new generation.

Obtain regulatory support for gridSMART^SM initiative, including traditional EE/DSM programs, new digital grid and smart metering technology.

Reduce 1,000 MW of demand by 2012 – 15 percent to come from AEP; 85 percent to come from customer programs.

Deploy 5 million smart meters by 2015, with regulatory support.

Progress

Developed clearer policy on EE/DSM.

For complete state-by-state information on 2007 EE/DSM activities, see www.AEP.com/cr/energyefficiency
Kicked off gridSMART^SM initiative that includes traditional EE/DSM program development and new technologies. Signed agreement with General Electric Co. to jointly develop and deploy equipment and technology programs to support this initiative.
Working collaboratively with Indiana Utility Consumer Counsel to implement 10,000-meter pilot in South Bend, Ind.
Participation with Leadership Group of National Action Plan for Energy Efficiency.

Challenge

Reasonable and achievable carbon controls that encourage other nations to participate, as described in AEP’s climate change policy.

Goal

A market-based federal cap-and-trade program that includes all sectors and sources, rewards early action, allows GHG offsets, supports public and private funding for technology development, includes a safety valve on the market price for purchasing allowances that protects the economy, allowances allocated based on historical emissions with only a small number of allowances (less than 5 percent) auctioned or set aside for public benefit.

Progress

AEP supports Senate Bill 1766, the Low Carbon Economy Act of 2007, introduced by U.S. Sens. Jeff Bingaman (D – N.M.) and Arlen Specter (R – Pa.).

Ongoing discussions with policymakers, industry peers and environmental stakeholders.
Supported Business Roundtable Energy Task Force report calling for diversified, domestic-based energy supply mix, increased EE/DSM and more investment in new technologies, such as carbon capture and storage.
Broad support for AEP/IBEW provision for climate change legislation.
Through participation in WBCSD, AEP is one of 10 global companies to develop report outlining policies and technologies needed for sustainable electricity future. Report presented at U.N. climate negotiations in Bali, Indonesia.
Hosted e8 coal power plant conference; engineers from India and Indonesia participated.
Through e8 participation, Galapagos wind energy project completed and brought online. Wind turbines displace partial need for diesel fuel for electricity, reducing the risk of fuel spills and emissions that could harm the fragile ecosystem of the Archipelago. Certified under Kyoto Protocol Clean Development Mechanism. AEP donated and installed 12 photovoltaic panels and funded training for long-term repairs and maintenance of both the solar and wind equipment.