On August 31, 2004, AEP released a report entitled, "An Assessment of AEP's Actions to Mitigate the Economic Impacts of Emissions Policies." This assessment was conducted at the request of a group of shareholders who requested an evaluation of the actions that American Electric Power is taking to mitigate the economic impact of increasing regulatory requirements, competitive pressures, and public expectations to significantly reduce carbon dioxide and other emissions.
A subcommittee of independent directors of the Policy Committee of the AEP Board of Directors prepared this report in response to this shareholder proposal. This subcommittee evaluated the actions the company has taken and is taking to address emissions of carbon dioxide and other air emissions; assessed the technologies available to the company for reducing these emissions; and reviewed analyses of the costs of several control scenarios.
The subcommittee's report affirms that the actions that AEP has taken over the last decade constitute a solid foundation for the company's future efforts to address the intersection between environmental policy and business opportunities. The assessment identifies the central challenge the company faces as being that of making decisions about large investments in long-lived assets in a setting of uncertain public policy and rapidly evolving technology. The authors conclude by recommending forceful and serious advocacy of highly efficient control programs; proactive leadership in technology development and operation; discipline in capital allocation decisions; openness to partnerships in technology and policy; and continued transparency of action as being essential elements of the path ahead for AEP.
