As a founding member of the Chicago Climate Exchange (CCX), AEP committed to cumulatively reduce or offset 48 million metric tons of CO₂ emissions from 2003 to 2010. Through 2008, we reduced or offset 51 million metric tons of CO₂ — exceeding our target. We’ve done this in a number of ways, such as improving power plant efficiency, replacing or retiring less efficient and higher emitting units, increasing our use of renewable power, reducing SF6 emissions and investing in forestry projects in the United States and abroad. For example, we have signed contracts to add 903 MW of wind capacity in the past two years — about 90 percent of our goal toward adding 1,000 MW of wind by 2011. Consequently, we will double this goal and add a total of 2,000 MW of renewable energy by the end of 2011, with regulatory support. This will help us to further diversify our fuel portfolio. Our upcoming integrated resource plan likely will contain a minimal 10 percent renewable energy target by 2020. We already are planning to go beyond our initial commitment.

AEP has made significant progress in reducing a potent GHG — SF6 — which is found in some electrical equipment. When AEP joined the Environmental Protection Agency’s (EPA) SF6 Emission Reduction Partnership in 1999, our SF6 leakage rate was 10 percent. In 2008, this rate had been reduced to 0.38 percent based on total system capacity, falling well below a self-imposed goal to achieve a maximum 2.5 percent leak rate from 1996 levels. We did it by employing a combination of technologies such as putting new breakers on lines to lower rates of SF6 leakage, investing in leak detection cameras and training field crews on SF6 gas handling procedures.

Our post-2010 strategy is to voluntarily reduce or offset an additional 5 million tons of CO₂ per year by purchasing offsets from projects such as forestry, reducing methane from agriculture, adding more renewable energy in our portfolio and improving the efficiency of our power plants. The investments we have made in our coal-fired power plants make them more efficient than the national average for coal plants. Between 2001 and 2007, these improvements helped us to avoid burning 16.2 million tons of coal, preventing the release of 39 million tons of CO₂.

AEP owns and operates 16 hydroelectric and one pumped storage plant. These plants, which operate on six rivers, generate more than 1 million MWh of mostly emissions-free electricity each year and are important to the diversity of our overall fuel portfolio.

AEP believes that verifiable offsets must be part of any climate legislation. AEP is a founding member of the Coalition for Emission Reduction Projects, which seeks to educate policymakers and the general public about the benefits of using offsets to meet compliance obligations under a federal GHG regulatory program. Forestry must play a major role if we are to have any chance to stabilize the atmosphere at a level sufficient to avoid dangerous climate change. To ensure forestry offsets are fully included in domestic and international climate policy, AEP joined with conservation groups and other energy companies to develop The Forest Carbon Principles (PDF). Since 1944, AEP has planted 63 million trees in the United States; we also have invested in reforestation and forest conservation projects in Belize, Bolivia, Brazil and Guatemala.