Company strategy will cut carbon dioxide emissions 60 percent from 2000 levels by 2030; 80 percent from 2000 levels by 2050
COLUMBUS, Ohio – American Electric Power (NYSE: AEP) today released a report outlining the company’s strategy for a clean energy future. The strategy includes new carbon dioxide emission reduction goals and investments in renewable resources and advanced technologies to enhance the efficiency of the power grid.
In the report, AEP outlines a business strategy that will lead to reductions in carbon dioxide emissions from its power plants of 60 percent from 2000 levels by 2030 and 80 percent from 2000 levels by 2050.
AEP expects to achieve its carbon dioxide emission reductions through a variety of actions including investments in renewable generation and advanced technologies; investment in transmission and distribution systems to enhance efficiency; increased use of natural gas generation; and expanded demand response and energy efficiency programs.
“AEP is focused on modernizing the power grid, expanding renewable energy resources and delivering cost-effective, reliable energy to our customers,” said Nicholas K. Akins, AEP chairman, president and chief executive officer. “Our customers want us to partner with them to provide cleaner energy and new technologies, while continuing to provide reliable, affordable energy. Our investors want us to protect their investment in our company, deliver attractive returns and manage climate-related risk. This long-term strategy allows us to do both.”
AEP’s resource plans include adding 3,065 megawatts (MW) of solar generation and 5,295 MW of wind generation to the portfolio serving its regulated utility customers by 2030. AEP’s largest planned renewable energy investment is the $4.5 billion, 2,000-megawatt Wind Catcher Energy Connection project in Oklahoma. If approved, Wind Catcher will be the largest contiguous wind farm in the U.S. and will deliver nearly 9 million megawatt-hours of low-cost wind energy annually to AEP customers in Oklahoma, Arkansas, Louisiana and Texas. Wind Catcher approval would accelerate how quickly AEP can add new wind generation to its portfolio.
AEP also is investing in renewable energy in competitive markets. Between 2018 and 2020, the company plans to invest approximately $1.2 billion in contracted renewables and renewables integrated with energy storage.
To enhance the efficiency and resiliency of the energy delivery system, AEP’s strategy includes plans to invest nearly $13 billion over the next three years in its transmission and distribution system.
AEP has factored future carbon regulations into the company’s evaluation of generation resource options for many years and will continue to do so. The company already has cut its carbon dioxide emissions by 44 percent since 2000.
AEP’s generation capacity has gone from 70 percent coal-fueled in 2005 to 47 percent today. Its natural gas capacity increased from 19 percent in 2005 to 27 percent today, and its renewable generation capacity has increased from 4 percent in 2005 to 13 percent today.
“This transition to a more balanced resource portfolio will help mitigate risk for our customers and shareholders alike and ensure a more resilient and reliable energy system into the future,” Akins said.
AEP’s Strategic Vision for a Clean Energy Future 2018 report complements the integrated Corporate Accountability Report that AEP has produced for the last 11 years to provide a comprehensive view of the company’s performance on key financial, environmental, social, governance and sustainability issues that are important to shareholders, customers and other stakeholders. Additionally, AEP helped lead the steering committee for Edison Electric Institute’s ESG/sustainability reporting effort, a voluntary electric industry initiative to help provide industry investors with more uniform and consistent environmental, social, governance, and sustainability-related (ESG/sustainability) metrics.
American Electric Power, based in Columbus, Ohio, is focused on building a smarter energy infrastructure and delivering new technologies and custom energy solutions to our customers. AEP’s more than 17,000 employees operate and maintain the nation’s largest electricity transmission system and more than 224,000 miles of distribution lines to efficiently deliver safe, reliable power to nearly 5.4 million regulated customers in 11 states. AEP also is one of the nation’s largest electricity producers with approximately 33,000 megawatts of diverse generating capacity, including 4,200 megawatts of renewable energy. AEP’s family of companies includes utilities 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 also owns AEP Energy, AEP Energy Partners, AEP OnSite Partners and AEP Renewables, which provide innovative competitive energy solutions nationwide.
This report made by American Electric Power 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: economic growth or contraction within and changes in market demand and demographic patterns in AEP service territories; inflationary or deflationary interest rate trends; volatility in the financial markets, particularly developments affecting the availability or cost of capital to finance new capital projects and refinance existing debt; the availability and cost of funds to finance working capital and capital needs, particularly during periods when the time lag between incurring costs and recovery is long and the costs are material; electric load and customer growth; weather conditions, including storms and drought conditions, and AEP’s ability to recover significant storm restoration costs; the cost of fuel and its transportation, the creditworthiness and performance of fuel suppliers and transporters and the cost of storing and disposing of used fuel, including coal ash and spent nuclear fuel; availability of necessary generating capacity, the performance of AEP’s generating plants and the availability of fuel, including processed nuclear fuel, parts and service from reliable vendors; AEP’s ability to recover fuel and other energy costs through regulated or competitive electric rates; AEP’s ability to build transmission lines and facilities (including the ability to obtain any necessary regulatory approvals and permits) when needed at acceptable prices and terms and to recover those costs; new legislation, litigation and government regulation, including oversight of nuclear generation, energy commodity trading and new or heightened requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances that could impact the continued operation, cost recovery, and/or profitability of AEP’s generation plants and related assets; evolving public perception of the risks associated with fuels used before, during and after the generation of electricity, including nuclear fuel; a reduction in the federal statutory tax rate that could result in an accelerated return of deferred federal income taxes to customers; timing and resolution of pending and future rate cases, negotiations and other regulatory decisions, including rate or other recovery of new investments in generation, distribution and transmission service and environmental compliance; resolution of litigation; AEP’s ability to constrain operation and maintenance costs; AEP’s ability to develop and execute a strategy based on a view regarding prices of electricity and gas; prices and demand for power generated and sold at wholesale; changes in technology, particularly with respect to energy storage and new, developing, alternative or distributed sources of generation; AEP’s ability to recover through rates any remaining unrecovered investment in generating units that may be retired before the end of their previously projected useful lives; volatility and changes in markets for capacity and electricity, coal, and other energy-related commodities, particularly changes in the price of natural gas; changes in utility regulation and the allocation of costs within regional transmission organizations, including ERCOT, PJM and SPP; AEP’s ability to successfully and profitably manage competitive generation assets, including the evaluation and execution of strategic alternatives for these assets as some of the alternatives could result in a loss; 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 AEP debt; the impact of volatility in the capital markets on the value of the investments held by AEP’s pension, other postretirement benefit plans, captive insurance entity and nuclear decommissioning trust and the impact of such volatility on future funding requirements; accounting pronouncements periodically issued by accounting standard-setting bodies; and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes, cyber security threats and other catastrophic events.