With 38,000 megawatts (MW) of generating capacity, AEP is proud to provide secure, low-cost power to millions of users. Our fuel mix is 66 percent coal, 23 percent natural gas, 6 percent nuclear and 5 percent hydro, wind and pumped storage. We expect to further diversify this mix in the future with more renewable and possibly more nuclear power.

We use a resource planning process to plan generation needs for many years out. This process, which is conducted annually and updated continuously, considers projected growth in demand, peak consumption, fuel and commodity prices, economic conditions, legislative and regulatory mandates and other factors to develop energy solutions at the lowest cost for our customers. This process guides the development and seeks to ensure the reliability of our energy supply.

Daily energy needs are planned through our commercial operations group, which manages the dispatch of our plants in conjunction with regional transmission organizations to meet the demand for power on a regional basis.

With the widespread use of air conditioning and the addition of the four Southwestern states of Arkansas, Louisiana, Oklahoma and Texas in 2000, AEP has largely become a summer peaking system. The energy efficiency and demand response programs we are developing will thus be geared toward reducing demand during the summer cooling season.

To meet projected demand in the fast-growing Southwestern Electric Power Company (SWEPCO) service territory, in late 2008 we began construction of the 600-MW John W. Turk Jr. ultra-supercritical coal plant in southwest Arkansas. SWEPCO received the final air quality permit from the Arkansas Department of Environmental Quality in November 2008. Construction should be complete at the end of 2012. This plant will serve the base load needs of customers in Arkansas, Louisiana and Texas. See the section on Climate Change for more information about the Turk Plant.

SWEPCO also is building the 500-MW J. Lamar Stall combined-cycle natural gas unit at the existing Arsenal Hill Plant in Shreveport, La. It is scheduled for completion in 2010 and will help to meet intermediate needs.

In our East region, the outage of the 1,055 MW Unit 1 at the Cook Nuclear Plant in Bridgman, Mich., on Sept. 20, 2008, was caused by the failure of low-pressure turbine blades that damaged the unit’s main turbine and generator, causing a fire that resulted in additional damage. There were no emissions of radioactive materials and no injuries. The earliest the unit may be returned to service is September 2009.

The Cook Nuclear Plant has implemented a program, based on industry guidelines, to meet a 2010 industry goal for fuel reliability. This includes items such as fuel surveillance and inspection and mitigation of debris. These actions allow the plant to operate more efficiently, achieve maximum fuel performance, minimize high radiation and contamination levels in the plant and reduce radioactive waste.

A rendering of the John W. Turk Jr. Power Plant. The plant will be one of the cleanest, most efficient coal-fueled plants in the United States, and the first of its kind in operation in the United States.