AEP is regulated by the public service commissions in the 11 states we serve, as
well as the Federal Energy Regulatory
Commission at the federal level. Regulators review AEP's costs to ensure
we are acting responsibly and prudently.
In return, we have the opportunity to recover our costs and earn a reasonable return.
AEP represents its own as well as its customers' and shareholders' interests before
Regional Transmission Organizations (RTOs), Independent System Operators (ISOs),
Congress and with state and federal agencies.
As a company that operates in a highly regulated industry, AEP conducts robust public
policy activities on the local, national and international levels. These may range
from local zoning questions regarding the siting of equipment or facilities to international
issues regarding climate change. These issues can influence what customers pay for
electricity.
Our stakeholders care deeply about public policy and want to know more about our
involvement. We work with many stakeholders in the public policy process and believe
that collaboration is essential if we are to solve complex problems such as climate
change. Our stakeholders suggested that our public policy positions should be developed
more collaboratively with them before we go to regulators or legislators. We agree.
For example, the Arkansas
Sierra Club asked us to work with them and others to develop a reasonable
renewable energy standard for that state. Our Southwestern Electric Power Co. is
now discussing this with them.
Our public policy positions are developed with input and assistance from many departments,
including the Board of Directors, the CEO and our Executive Council, Regulatory
Services/Public Policy, Environment, Safety & Health and Facilities, Generation,
Transmission, Corporate Communications, Human Resources, our operating companies
and our Washington, D.C., office, among many others. We work with organizations
such as the National Association of
Regulatory Utility Commissioners,
National Conference of State Legislatures,
American Legislative Exchange Council,
Council of State Governments, National
Governors Association and regional governors associations
to ensure that our positions are responsible, well-articulated and coordinated.
Seven core public policy objectives guide our activities as we develop positions
that would further the company's ability to:
- Produce electricity safely, reliably and at a reasonable price.
- Expand and reinforce the transmission infrastructure to create a robust system that
can be used to support the next generation of electricity supply resources, including
renewables. This will also reduce congestion and energy losses, thereby reducing
costs.
- Meet the growing demand for clean energy.
- Help our customers manage their consumption through energy efficiency programs designed
to balance the impact of increasing fuel costs, meet environmental requirements
and manage infrastructure issues.
- Increase environmental protection through reasonable and voluntary efforts.
- Ensure regulatory cost recovery for generation, transmission, distribution and environmental
compliance investments in markets subject to regulation.
- Provide a reasonable total return (including ROE and market growth) for shareholders,
thereby helping to ensure AEP's financial stability needed to meet these policy
goals.
