Business Performance

Natural Resources

It is challenging to practice environmental stewardship while providing electricity at affordable rates. AEP is meeting this challenge in several ways. For example, efforts are underway to implement vegetation management practices on our transmission rights of way to encourage wildlife, while at the same time, meeting all North American Electric Reliability Corporation (NERC) requirements. We are also working with the Electric Power Research Institute (EPRI) to find more ways to generate power and create benefits for the environment at the same time. EPRI’s Ohio River Water Quality Trading Program, of which AEP is a participant, is one good example.

Increasingly, endangered or threatened species are of growing concern nationally. In March 2014, AEP was among 32 private companies and five states that committed to enroll more than 3.6 million acres in the Lesser Prairie Chicken Range-Wide Conservation Plan. This three-year plan is a collaborative effort to support habitat conservation for the bird, which is being considered for listing under the Federal Endangered Species Act. As we seek to build new transmission facilities across our service territory, we are mindful of potential environmental and ecological impacts we might have. Working with organizations such as the Western Association of Fish & Wildlife Agencies – which is overseeing this plan – helps us understand the issues, support habitat preservation and take appropriate actions to mitigate our impacts.

In Eastern Oklahoma and parts of Arkansas and Texas, AEP is required to take steps to protect the American burying beetle (ABB) when building projects in its range. The ABB was listed as an endangered species in 1989 and any disturbance of its habitat must be offset. When the ABB is found in areas where a proposed transmission line route is being considered, we are faced with restrictions regarding construction activities (including clearing activities) that may disturb their habitat. This can lead to substantial project delays which can increase costs. AEP Transmission is developing a long-term habitat conservation plan for the ABB. Although there are costs associated with developing and implementing such plans, having a plan in place protects the species while reducing time constraints for meeting project schedules.

The Indiana bat is another species AEP is mindful of. The bat has been on the federal endangered species list since 1967. The bat is known to be located in 9 of the 11 states in which AEP operates. In some areas, tree cutting during certain times of the year must take into consideration potential effects on the Indiana bat habitat. Since the Indiana bat roosts under tree bark or crevices, areas with potential habitat trees must be evaluated prior to tree clearing.

AEP provides information about how we manage these and other issues through our participation in business and environmental disclosure surveys, such as the Global Reporting Initiative and the Carbon Disclosure Project. AEP voluntarily discloses its social, economic and environmental challenges through its responses to these surveys, which are then reviewed and ranked and made public. This information is shared with investor groups, shareholders, government agencies, and other public organizations. Responses to questions regarding the company’s management of social issues, such as employee benefits, demographics, and safety issues, economic issues, such as rate cases, deregulation and national economic trends, and environmental issues, such as new regulations, compliance, and natural resource use, are also provided in these surveys. These responses provide a valuable insight into how the company addresses and manages what many consider to be important business risks.

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