Resource Planning & Diversity

Our vertically integrated utilities are obligated to have an adequate supply of generating capacity and energy to meet their customers’ needs. To meet this obligation in a cost-effective manner, they engage in long-term resource planning. AEP’s planning process helps our states plan their energy and capacity needs over time and considers available resource and market options to achieve the right mix of resources at reasonable costs for our customers.

Integrated Resource Plans (IRP) provide a snapshot of a potential future generating mix, based on today’s assumptions. An IRP is not a commitment to a specific course of action, as the future is uncertain and decisions relating to AEP's generation resources are subject to regulatory approval. Rather, it is a roadmap that shows the amount, timing, cost and type of potential future resource additions that meet the customers’ future resource needs at a reasonable cost.

Our publicly filed IRPs use a planning horizon of 10 to 20 years. They demonstrate how we will meet customer demands for reliable and affordable energy and allow us to estimate future emissions from our generation resources. Our current plans project that we can achieve a 60 percent reduction in CO2 emissions from 2000 emission levels by 2030 by focusing on near-term investments in renewable energy, and incorporating an assessment of potential future carbon costs and expected lives of our generating resources in all of our planning and investment decisions. The potential for carbon regulation has been part of our IRP process for many years and provides an important market signal when we are determining resource needs and costs.

To develop our IRPs, we systematically evaluate and balance multiple issues, including the increasingly complex existing and pending environmental regulations, technology advancements, changing pricing fundamentals, load growth forecasts, energy efficiency advancements, growth in customer-adopted distributed resources and other complexities. Many IRP processes also include stakeholder outreach.

Once an IRP is developed, it is filed with the state regulatory commission. In some states, the commission will approve the IRP, determining that the plan is reasonable and in the public interest for its intended purpose. AEP’s resource planning, as reflected in our IRPs, sets a clear path forward to reducing our carbon footprint.