COLUMBUS, Ohio, April 26, 2007 – American Electric Power (NYSE: AEP) has released its first-ever Corporate Responsibility Report in which it addresses issues that affect the company’s sustainability, including climate change, public policy strategy, environmental performance, energy security, reliability and growth, work force issues and stakeholder engagement.
“This report is a milestone because it discusses these important issues in a candid way for our shareholders and all of our other stakeholders,” said Michael G. Morris, AEP’s chairman, president and chief executive officer. “In developing the report, we initiated a new level of dialogue with the many groups with whom we interact, including our investors, employees, representatives of the communities we serve, labor unions, and representatives of the environmental community. That dialogue helped us improve the report and better understand how our best intentions of operating in a responsible, sustainable way translate to our policies and day-to-day actions.”
Each section of AEP’s Corporate Responsibility Report provides an overview of how that topic affects the company’s long-term sustainability and how the company plans to address it. The report was written to standards established by the Global Reporting Initiative, a voluntary reporting framework used by organizations around the world as the basis for sustainability reporting..
“This report represents a new level of commitment by AEP to engage regularly with our stakeholders about the role our company plays in society and the impact that we have,” said Dennis Welch, AEP senior vice president, Environment, Safety & Health. “We believe that’s in the best interest of our shareholders, our employees, our customers and all the other facets of society that we affect.”
In the report, AEP reiterates its policy regarding climate change and identifies the steps it is taking to reduce the growth of future greenhouse gas (GHG) emissions as the company builds new power plants to meet growing customer demand. Through its participation in the Chicago Climate Exchange (CCX) since 2003, AEP will have reduced GHG emissions by 46 million metric tons by 2010. However, GHG emissions will begin to increase after that date without further intervention as the company’s new power plants come on line.
To help reduce and offset that growth, AEP plans include demonstrating and deploying carbon capture technology on two existing pulverized coal plants, continuing efforts to improve the efficiency of its existing coal-fueled fleet and adding 1,000 megawatts of wind generation capacity to its eastern generation portfolio through long-term purchase agreements. The company also plans additional investments in domestic greenhouse gas offsets, such as methane capture from livestock and landfills; increased investment in forestry offsets; and programs to offset GHG emissions from its 11,000-vehicle fleet and corporate aircraft.
“One of the keys to an effective sustainability policy is to recognize that these important issues can be addressed while still operating profitably and providing economical power for our customers. Our commitment to addressing our challenges in a sustainable way is supported by our Board of Directors, who reviewed, provided input and approved this report,” Morris said. “The future of our company is limited only by our vision of what we can accomplish. Based on our 100-year legacy of finding innovative ways to provide cleaner, more-reliable electricity for our customers, I have every confidence that our core values will guide us to new, more sustainable ways of generating, transmitting and delivering power that benefit all of our stakeholders.”
AEP’s Corporate Responsibility report is available online at www.AEP.com/cr. Printed copies of the report also can be requested at www.AEP.com/cr.
American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP’s transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP’s headquarters are in Columbus, Ohio.
This report made by AEP and its Registrant Subsidiaries contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its Registrant Subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: electric load and customer growth; weather conditions, including storms; available sources and costs of, and transportation for, fuels and the creditworthiness of fuel suppliers and transporters; availability of generating capacity and the performance of AEP’s generating plants; AEP’s ability to recover regulatory assets and stranded costs in connection with deregulation; AEP’s ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; AEP’s ability to build or acquire generating capacity when needed at acceptable prices and terms and to recover those costs through applicable rate cases or competitive rates; new legislation, litigation and government regulation including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances; timing and resolution of pending and future rate cases, negotiations and other regulatory decisions (including rate or other recovery for new investments, transmission service and environmental compliance); resolution of litigation (including pending Clean Air Act enforcement actions and disputes arising from the bankruptcy of Enron Corp. and related matters); AEP’s ability to constrain operation and maintenance costs; the economic climate and growth in AEP’s service territory and changes in market demand and demographic patterns; inflationary and interest rate trends; AEP’s ability to develop and execute a strategy based on a view regarding prices of electricity, natural gas and other energy-related commodities; changes in the creditworthiness of the counterparties with whom AEP has contractual arrangements, including participants in the energy trading market; actions of rating agencies, including changes in the ratings of debt; volatility and changes in markets for electricity, natural gas and other energy-related commodities; changes in utility regulation, including the potential for new legislation or regulation in Ohio and/or Virginia and membership in and integration into regional transmission organizations; accounting pronouncements periodically issued by accounting standard-setting bodies; the performance of AEP’s pension and other postretirement benefit plans; prices for power that AEP generates and sell at wholesale; changes in technology, particularly with respect to new, developing or alternative sources of generation; other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.