To achieve long-term, sustained value for customers, investors and employees requires a clear focus, thoughtful planning and an organizational culture of innovation and engagement. We are in the business of producing and delivering reliable, safe and affordable electricity to our customers. This is both a great honor and a great responsibility.
We measure our success by our financial performance, the reliability of our system, the customer experience, our environmental performance and compliance, the safety and health of our employees, contractors and the public, and the relationships we have with our various stakeholders. We are focused on fiscal discipline, continuous improvement and investing to modernize the grid.
The connections between our environmental, financial, operational and social performance have become much stronger and clearer to us. We are in business to be profitable, yet we are sensitive to the impacts our product has on the environment, the prices our customers can pay for electricity, the demand for safe, reliable electricity and the value of informed stakeholder engagement.
Fiscal discipline, continuous improvement and prudent investments are fundamental to sustainable growth.
Overall, AEP’s environmental performance is excellent. A major transformation of our generation business due to new environmental regulations will affect customers and grid reliability.
Safety and health are a top sustainability priority at AEP. We continue making progress toward our goal of zero harm.
Our industry has a strong track record of maintaining high levels of reliability. Vegetation-related outages and equipment failure are among the biggest challenges to AEP’s service reliability. During the past five years, AEP has invested more than $1 billion in vegetation management, including $281.9 million in 2014.
AEP Ohio’s Distribution Investment Rider allows for proactive investments in aging Distribution infrastructure in order to maintain and improve service reliability. The company also has regulatory support for a separate rider that supports a proactive vegetation management program to reduce the impacts of weather events and maintain overall system reliability.
In 2014, Appalachian Power opened a new training facility in Virginia. The Pulaski Distribution Line Training School includes an indoor and outdoor climbing area, giving us the ability to train future line mechanics year-round. In 2014, 67 line apprentices completed the Distribution Line Mechanic Apprentice Training Program across AEP.
AEP has implemented new design criteria to strengthen, or harden, the distribution system. We now design new and replacement poles to withstand wind speeds and ice accumulations that exceed the National Electrical Safety Code requirements. In 2014, approximately 105,000 poles were designed and installed using the new criteria.
AEP River Operations is one of the largest inland waterways carriers in the U.S. In 2014, River Operations transported 21.3 million tons of coal and other consumables to AEP facilities and 48 million tons of coal, grain and other bulk goods for commercial customers.
In 2013, AEP Transmission formed a siting team which is responsible for frontline public outreach and siting support in AEP’s 11-state service territory. In 2014, we implemented a formal outreach strategy to match the level of construction being planned. Outreach can include open houses, one-on-one meetings and virtual open houses.
When a major event occurs that results in widespread outages the electric industry mobilizes to deliver resources, supplies and crews to restore power. AEP and the industry are working to improve emergency response plans. AEP’s updated Emergency Response Plan will be fully implemented in 2015. A key element of the plan is an Incident Command System.
We conduct internal audits of our environmental and safety and health management programs every year. This system helps us to measure, track and report our progress. In 2014, audits were conducted at 16 locations across AEP.
AEP is partnering with the Wildlife Habitat Council to develop a conservation “tool kit” that will provide a range of conservation options for right of way (ROW) land management. Our intent is to incorporate environmentally beneficial conservation practices into our ROW management efforts that are both economical and protect reliability as we rebuild old lines and build new ones.
It is challenging to practice environmental stewardship while providing electricity at affordable rates. AEP is meeting this challenge in several ways. For example, we are implementing vegetation management practices on transmission rights of way to encourage wildlife, while at the same time meeting all regulatory reliability mandates.
Utilities, including AEP, are adopting Avian Protect Plans to mitigate the risks of birds colliding with or being electrocuted by power lines. AEP’s plan was completed in 2013. In addition to reducing avian mortality, the plan is also intended to reduce the frequency of bird-caused outages.