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ENGAGING SUPPLIERS

We work with fuel and nonfuel suppliers to drive continuous improvement and efficiencies within the supply chain while improving environmental and safety performance. We ask suppliers about their sustainability strategy and activities through our procurement process, and we advise them of opportunities to help them reduce or mitigate their impacts on natural resources. 

AEP is a founding member of the Electric Utility Industry Sustainable Supply Chain Alliance (‘the Alliance’), a 501(c) 6, nonprofit corporation that was established in 2008 to “green” the electric utility industry supply chain. The Alliance has 16 utilities that represent more than 50 million customers in 24 states. Some of 2011’s activities to further supply chain sustainability included: two Life Cycle Analysis projects related to wire and cable and transformers; our third annual survey of more than 800 suppliers to the industry; the creation of two videos designed to advance sustainability in a manufacturing environment and motivate companies to address their greenhouse gas emissions; and a meeting with environmental advocates, codes and standards organizations and suppliers about the Alliances’ strategy, goals and performance. The Alliance also held its first sustainability forum.

AEP also works directly with its fuel suppliers and surveys its coal suppliers on their environmental, safety and health performance. We have conducted two surveys of our coal suppliers, a commitment we made to stakeholders to better understand the lifecycle of coal, its impacts on the environment, how our suppliers are addressing those impacts and to share leading practices.

The final report on the results of the second survey was issued in 2011, based on 2009 data. We did not conduct the survey in 2011 due to internal changes and a change in the mining consultant with whom we work. The third survey, based on 2010 data, has been completed and the data are being compiled; a report will be issued later in 2012.

The respondents to the 2010 survey represented companies responsible for about one-third of the coal mined in the United States and nearly every coal basin in the country. We have learned much about our suppliers, and they have learned about their own industry through this process. For example, a majority of respondents have programs that include training, job safety analysis programs, risk assessments and wellness programs, was not generally known about before the survey.

As we diversify our resource mix, we will consider how to engage with other fuel suppliers, particularly within the natural gas industry.

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