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The United States desperately needs a comprehensive national energy policy. Without a common vision at both the federal and state level, strategic planning is difficult and less than optimal. State public utility commissions (PUCs) are put in the untenable position of having to reconcile conflicting mandates to ensure the lowest possible prices for customers while ensuring environmental compliance and grid reliability. This situation is occurring while the power sector addresses more stringent environmental requirements at the national level and a rapidly changing and complex energy market.

The need for a coherent national energy policy was more pronounced in 2011 as the U.S. Environmental Protection Agency (EPA) issued new environmental rules without meaningful coordination with the Federal Energy Regulatory Commission (FERC) or the state PUCs. These regulations not only make compliance unnecessarily expensive and difficult, but they also threaten grid reliability and create financial and operational obstacles to invest in the electricity industry.

If the United States had clear federal and state policies, we could better manage the costs associated with environmental compliance, developing renewables and new sources of energy, and expanding our transmission grid. W e could improve our environment, stabilize our energy future and enhance our competitiveness more efficiently.

We face many challenges: the imposition of new environmental regulations and the related transition of our generation fleet; future market competition; separation of generation from transmission and distribution assets in some jurisdictions; the inability to obtain regulatory recovery of certain operational costs; and changes in our business operations. While we have gained greater certainty over some issues, disjointed and uncoordinated regulatory treatment will continue to lead to expensive and suboptimal results.

  • For more data, please see the Society (SO) section of AEP’s Global Reporting Initiative G3 questionnaire.

U.S. Department of Energy
The U.S. Department of Energy should have a larger role in determining the impact of environmental regulations, AEP President Nick Akins told a U.S. House subcommittee in October 2011

Governance Operating