We are a publicly traded electric utility that must protect and enhance the investments of our shareholders. We do this through our mission of bringing comfort to customers, supporting business and commerce, and building strong communities. Our duty is to provide reliable, safe and affordable electricity for the benefit of the public. This dual purpose is reflected in our corporate directives, management systems and operations.

Our strategy is directed toward aligning our business, environmental and social performance. We manage this by setting explicit goals and objectives in all three areas and by holding ourselves accountable for meeting them. We also have linked our environmental, social and governance disclosure to our financial reporting.

Affordable, reliable energy has been the backbone of the U.S. economy for decades. It will be critical to our country’s economic recovery and growth. At the same time, we realize that fossil fuel emissions are a growing concern and we are weighing all of our options as we prepare for the future.

Our strategy for sustainability is grounded in a commitment to meet our customers’ needs as efficiently and cost-effectively as possible without putting our shareholders at undue risk. Although the future is uncertain and there are many challenges, it is clear that the electric utility industry is at the start of a major transformation. This is a consideration in our resource planning process, from the supply side to the customer.

Global climate change is one element driving this change. We may operate fewer coal units in the future, driven by a combination of factors. These include the relative age and efficiency of certain units, carbon reduction mandates, new and more stringent environmental regulations, the cost of compliance, and the potential for increased use of natural gas.

We are exploring many different technology options, such as carbon capture and storage and distributed generation. We are also weighing the possibility of retrofitting older, inefficient coal units to natural gas, preparing to operate a grid that supports energy storage and the electrification of the transportation sector, ramping up energy efficiency, modernizing the grid to enable greater use of renewable energy, and giving customers more control over their electricity use.

We expect the focus will sharpen in the next couple of years. Our challenge will be to determine how much and where to invest capital and which technologies to deploy. At the same time, we have to balance the level of investment our customers are able to afford with the ability of our shareholders to earn a fair return on their investment.

The actions we are taking today will position us to meet these challenges while providing affordable electricity to our customers. These include actions, subject to regulatory approval, to reduce CO₂ emissions; invest in new technologies such as gridSMART^SM, community energy storage, advanced coal, and carbon capture and storage; expand our use of biomass, wind and solar power; increase the use of natural gas and nuclear power; and advocate public policies that support modernizing our transmission system. We are also taking steps to ensure that we have a skilled, diverse work force and can attract and retain the best talent to build, operate and maintain today’s technologies as well as the technologies of the future.

We have ongoing dialogue with many stakeholders who have an interest in or are affected by our business. These include shareholders, customers, labor legislators, regulators, policymakers, employees, retirees, prospective employees, communities and nongovernment organizations. We will continue working with all of our stakeholders to find common ground on these critical issues.