Electrification

Both globally and within the U.S., our economy is moving away from fossil fuel resources to cleaner, less carbon-intensive options. This includes the transportation sector. At the 2021 United Nations Climate Change Conference (COP26), over 100 national governments, cities, states and major businesses signed the Glasgow Declaration on Zero-Emission Cars and Vans to globally end the sale of internal combustion engines by 2040. In the U.S., transportation accounts for the largest share of CO₂ emissions. Getting more Americans to switch to electric transportation options by improving access to charging infrastructure is a key component of President Biden's agenda to combat climate change. The $1 trillion Bipartisan Infrastructure Law includes $7.5 billion dedicated to support EV charging investments over a five-year period, with a portion dedicated to low-income and rural areas. This supports new national goals of building 500,000 EV charging stations and having EVs represent 50% of new car sales by 2030.

Electric utilities play a vital role in decarbonizing and electrifying our economy. According to Edison Electric Institute, over the past decade electric companies have received regulatory approval to invest more than $3.4 billion to accelerate electric transportation. This includes investing in smart grid technologies to support charging infrastructure, deploying cost-saving customer programs, and influencing public policies to support the continued growth of electric transportation options.

AEP has assembled a cross-functional team to analyze the opportunities in the Bipartisan Infrastructure Law and advocate that our customers receive their share of the federal funds to support the electrification of transportation in our communities. We plan to assist our customers, communities, and stakeholders in navigating these historic opportunities. This strategy will accelerate the goals and objectives AEP has been pursuing for the past five years to facilitate the transition to EVs and give our customers access to the benefits of electric transportation.

Globally, automakers sold 6.6 million plug-in vehicles in 2021, more than double the 3 million sold in 2020 and more than triple the 2.2 million sold in 2019, according to the International Energy Agency. According to Kelley Blue Book, electric vehicle sales in the U.S. reached a new peak in the fourth quarter of 2021, making up 4.5 percent of all car sales from October through December.

As the cost of EVs continue to drop, we are seeing adoption rates increase among both our residential and commercial customers. In addition, several of our commercial customers have set emission reduction goals for their fleet which is critical in supporting EV growth. Our efforts to provide customers with accessible and affordable charging options focuses on working with regulators to create programs that benefit all customers. This includes offering customers low off-peak EV-charging rates, incentives for charging station installations and associated infrastructure upgrades, and consultative services to encourage electrification.

Several of AEP’s operating companies offer programs to support customers in their adoption of EVs. For example, Indiana Michigan Power’s IM Plugged In program offers incentive payments and discounted overnight rates for EV charging for residents and small commercial customers in both Indiana and Michigan. IM Plugged also has EV charging incentives in both states for commercial and industrial workplace, fleet, and multi-unit dwelling customers planning to install EV chargers. These include rebates for newly installed EV charging ports and or extended revenue credit options for customers that require new dedicated electrical service from I&M for EV chargers.

We are also supporting our customers that are seeking assistance in deploying EV charging solutions to support their fleet electrification initiatives. For instance, Public Service Company of Oklahoma (PSO) is partnering with ChargePoint, an EV charging network. Through this partnership, PSO will identify business customers with EV charging needs and connect them with ChargePoint, which will offer its services to support our customers’ needs.

In addition, we are looking for opportunities to support our local communities to electrify their fleet. As part of a New Source Review settlement with the EPA, Appalachian Power awarded $2.1 million in grants to five school systems across southwest and central Virginia toward the purchase of nine energy-efficient buses powered by electricity. AEP Ohio and I&M plan to make similar awards in 2022. Electric school buses are quieter and less expensive to maintain and operate. In addition, they reduce children’s exposure to harmful diesel exhaust fumes and particles.