Goal

2010 Performance

Future Target

Performance results in no significant Enforcement Actions (NOVs).

2010 --3
2009 – 5
2008 -- 1

2011 -- 0

Do not exceed annual target for Environmental Performance Index (opacity, NPDES, oil & chemical spills).

**Affects only Generation business.

2010 -- 15
2009 --- 9
2008 -- 10

2011 -- 10 or fewer incidents

Part of AEP’s commitment to environmental performance is to comply with the Clean Air Act and all applicable air quality regulations, to reduce air emissions of sulfur dioxide (SO2) and nitrogen oxide (NOx). We also are completing NSR commitments.

Between 2003 and early 2011, built 9 scrubbers on 7,900 MW of coal-fired generating units and selective catalytic reduction systems on 11,000 MW since 2001. Currently SOx and Nox are about 80 percent lower than 1980 levels.

2010 SO2 and NOx caps achieved on eastern plants, per consent decree. (For a full update on NSR compliance, see Environmental Performance.)

The target is to continue to achieve the Sox and NOx emissions cap in the NSR commitment. Further emission reductions will largely be dependent on outcome of current regulatory activity. Read more about this in Environmental Performance.

Establish and maintain a management system that conforms to AEP’s Environment, Safety and Health Management System Standard, based on ISO 14001 and OHSAS 18001. Implement the system at fossil and hydro plants and develop site-specific manuals at selected plants.

In 2010 the MESH initiative focused on two primary areas: 1) the development of corporate level tools, procedures and electronic systems required to support compliance with the AEP ES&H Management System Standard, and 2) to develop and implement a MESH Manual at Amos Plant that is being used as a template for all Fossil/Hydro facilities. The plants are now able to share documents and create site-specific operational control procedures and guidelines using the new MESH Manual.  Corporate ES&H Communication modules.

Goal is to continue implementation of MESH (ISO 14001 and OHSAS 18001) at fossil/hydro plants by the end of 2012. However, the timing and number of plants participating will be affected by the transformation plan that is expected to result in retirement of some fossil units.

Water Study Group to identify opportunities to address water risk management.

Began to develop plan for study of water use at power plants to identify opportunities to reduce water needs and address conservation.

Evaluate water usage at a representative plant with the goal of maximizing water reuse and minimizing the quantity of wastewater generated that would require treatment prior to discharge. One of the main drivers for this study is the possibility of changes in power plant water balances due to future regulatory requirements for handling coal ash, in addition to water conservation. Complete CDP Water Survey.

Continue to eliminate PCBs from the AEP system through planned phase-outs and normal equipment retirements.

Within the Generation business unit, the last major equipment items known to contain PCBs at concentrations greater than 500 ppm are electrostatic precipitator transformer/rectifier sets. These T/R sets are being replaced as equipment failures occur and as units are removed from service.  In 2010, four T/R sets were replaced with equipment that does not contain PCBs.

Removed and recycled approximately 32,800 pieces of electrical equipment. Of that, 1,790 (approx. 5.5 percent), and fewer than 0.5 percent of the transformers, were found to contain greater than 500 parts per million (ppm) of PCBs. Only about 3 percent of 1,576 transmission and distribution electrical equipment spills involved oil that contained 50 ppm or greater PCBs, and all were cleaned up properly.

Continue to eliminate PCBs from the AEP system through planned phase-outs and normal equipment retirements.

Continue to work with suppliers to enhance/improve their environmental performance.

Coal Suppliers
Conducted second survey of coal suppliers to assess environmental, safety and health performance. Conducted follow-up stakeholder meeting. Read a summary of preliminary results of the 2010 survey (www.AEPsustainability.com/reporting) The final report will be posted later this year when complete.

Nonfuel Suppliers
As part of a pilot, bidders are asked to complete a sustainability survey, the results of which are considered during the decision-making process.

AEP is one of 16 investor-owned electric utilities that belong to the Electric Utility Industry Sustainable Supply Chain Alliance. The alliance sent surveys to more than 700 suppliers during the past two years to learn more about their environmental performance and to identify trends. Read about the results and about the Alliance at www.EUISSCA.org.

We will continue to survey coal suppliers and share best practices with all suppliers, as well as continue to engage with stakeholders, to drive performance improvement in the coal industry. We are also exploring the possibility of an industry-wide survey to avoid survey fatigue for suppliers.

We will consider revising our nonfuel purchasing policy to better enable us to assess the impact that our suppliers have on water, air, land and energy. Once we evaluate this, we will consider making environmental performance a factor in supplier reviews, starting in 2012.