Our corporate Vision, Mission, Strategy & Values
outline the principles that guide our business and provide the context for integrating sustainability into our strategy, daily operations, measurement and reporting. As we looked more closely at what sustainability means to us, we revised our Vision for Sustainability to better reflect our vision for the future.
Our goal is to help secure a lower-carbon energy future. That means more renewable energy, an extra-high voltage transmission backbone system, advanced coal technologies and energy efficiency. Our strategy and determination to achieve it have not changed. We want to work with all of our stakeholders to find common ground and move toward this goal. Climate change must be addressed through reasonable legislation that sets ambitious but achievable goals.
Like many other companies, AEP is making adjustments to adapt to the current economic crisis and to ensure our sustainability. We have fewer resources to support our business, and we are managing them carefully. We have taken steps to limit spending and reduce debt in response to the economic downturn. We know our customers also are facing hardship; we see it in the loss of jobs throughout our service territory. Electricity consumption is down and customer delinquencies are up, as more customers face difficulties paying their bills. And we see it in regulatory decisions in our states where regulators are understandably unwilling to raise customer rates in this environment. But when rates are kept low and costs are deferred, we face difficult choices. We can no longer afford to spend now and collect later, especially as costs continue to escalate. This regulatory model is quickly creating a crisis in the electric industry, and our strategy is to work with regulators, legislators and other policymakers to develop alternative regulatory solutions.
We have made progress on several
fronts, including the $5.2 billion in environmental investments in our plants, although the recession may slow our pace. We are deeply concerned that if regulations move faster than the development of technology, older coal plants could be forced to retire sooner, leading to more costly generation solutions and higher costs for customers. Our customers have seen their rates increase between 20 percent and 50 percent
during the last three years, driven largely by government mandates and fuel costs. We expect costs to rise further, and we are seeking alternative rate-making options that allow us to make needed investments and recover the cost of those investments sooner.
Better managing the pathway from power plant to customer is a big part of our strategy — from building a far more efficient interstate transmission system to new customer programs enabled by the smart meters of our gridSMARTSM initiative. Just as the federal highway system has facilitated growth in our national economy, so too will a modern electricity grid. It will create efficiencies
for all electricity delivery, improve reliability and drive growth in renewable forms of energy by moving electricity
from where it can be generated to where it is needed.
We support more emphasis on energy efficiency because it is an excellent tool to help customers manage their bills, delay or reduce the need for new generation and address climate change.
