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STAKEHOLDER DIALOGUES AND ISSUES

The link between our financial and nonfinancial performance is strong and growing stronger; we can’t be healthy in one without the other. Our environmental performance is directly related to our financial performance, for example, and the same is true for worker health and safety. Many of our investors are increasingly seeing this connection. Our job is to inform them specifically about how our strategies capitalize on these links.

The uncertainty about Ohio regulations and federal and state environmental rules has caused our share price to be discounted, compared with our peers as defined by the S&P Utilities Index. Our four-part strategy plan is designed  to reduce our share price discount and maximize long-term value to shareholders.

In February 2012, we held a multistakeholder meeting with AEP’s leadership team, led by President and CEO Nick Akins. We met with more than 40 customers, analysts, investors, environmental organizations, trade groups, coal suppliers and labor leaders. It was Nick’s first stakeholder meeting as CEO. He emphasized the importance of these types of discussions, particularly during this time of change, and encouraged stakeholders to come forward with their ideas and concerns. The dialogue focused largely on AEP’s business transformation and Ohio deregulation.

Environmentalists challenged us on our plan that calls for more time to comply with EPA regulations. One stakeholder expressed concern that the legislative path AEP is pursuing appears to be for AEP’s benefit only and pleaded with the company to play a constructive role in the debate. Customers said they rely on AEP and the industry to reach a solution that does not jeopardize reliability and has as minimal an impact as possible on prices. We will continue to update this group and seek their input.

The Energy Efficiency Advisory Council (EEAC) we created in 2010, composed of 13 manufacturing, trade, technology, environmental and policy experts, met twice in 2011. We brought the group to our Dolan Technology Lab in Ohio to show them the many different technologies, from smart appliances to electric vehicles that we are testing on our system.

It became clear early in 2012 that the best structure for this group is as an ad hoc advisory group. We found that during the group’s first 18 months, most of what we worked on were bilateral projects rather than group projects. For example, the Association of Home Appliance Manufacturers sought our opinion on proposed new appliance efficiency standards while the U.S. Green Building Council and Alliance to Save Energy wanted to work with us on energy efficiency education programs. The Department of Energy’s Industrial Technologies program, a member of the EEAC, worked with our national accounts managers on potential resources for our large customers.

We regularly engage with all of these organizations, either individually or through other groups to which we belong. By mutual consent, we changed the structure and agreed to provide a quarterly report about energy efficiency activities at AEP while continuing to seek opportunities to leverage their expertise.


  • For more data,, please see the Governance section of AEP’s Global Reporting Initiative G3 questionnaire.
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