AEP Sustainability - Sustainable Electricity

Sustainable Electricity

The energy industry is experiencing a profound transformation, driven by decarbonization of the global economy; new, advanced technologies; and the growing electrification of energy demand. During the past decade, electric utilities have been at the forefront of this transition, diversifying resources, delivering clean energy solutions to customers and investing in a modern grid capable of optimizing all resources and technologies. The result is that customers have more control; in some cases, they can “pay as they go,” choose special time-of-day-rates to reduce bills, and opt for cleaner options to power their homes and businesses.

AEP has already made significant progress in reducing our carbon footprint. During the past decade, we retired, sold or converted to natural gas 12,339 megawatts (MW) of coal-fueled generation, ramped up our clean energy portfolio with more than 5,200 MW of total renewables, extended the life of our carbon-free nuclear units, and invested $31.4 billion to modernize the transmission and distribution systems. In 2019, coal represented 45% of our generating capacity, compared with 70% in 2005. Through 2019, AEP reduced its carbon emissions profile by 65%, putting us well on our way to our goal of reducing our carbon footprint by 70% by 2030.

Looking ahead, we will continue to invest in clean energy solutions for customers. By 2030, our current integrated resource plans for our regulated utilities include the addition of up to another 4,149 MW of solar, 3,935 MW of wind and 1,607 MW of natural gas. In addition, we are committed to investing $2.1 billion in contracted renewables from 2020 through 2024 across the U.S. Today, this competitive business manages a renewable portfolio of 1,572 MW across 11 states.

As we transition to a cleaner energy future, we will take steps to ensure we continue to provide the safe and reliable electricity that is the backbone of our nation’s economy and powers our customers’ daily lives.

Integrated Resource Planning

As a regulated utility, we must provide our customers with reliable energy. To meet this demand in a cost-effective manner, we use a long-term approach to resource planning. We determine our energy and capacity needs well into the future to help us find the best mix of energy resources at reasonable costs to our customers. Achieving this requires striking the right balance of renewable energy sources – such as solar, wind and hydro – and 24/7 sources such as natural gas, nuclear and coal, as well as other advancements in resource technology that drive a more efficient grid.

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, showing the amount, timing, cost and type of potential future resource additions. It must cover both energy and capacity needs and do so at a reasonable cost.

Our publicly filed IRPs use a planning horizon of 10 to 20 years. They demonstrate how we plan to meet customer demands for reliable and affordable energy and allow us to estimate future emissions from our generation resources. We are entering the latter phases of our retirement of generating units in many jurisdictions. This makes the planning process extremely important as AEP transitions to a cleaner energy future.

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

IRPs are filed with state regulatory commissions. Regulatory proceedings and requirements for IRPs vary widely from state to state. Some states require significant stakeholder engagement processes ahead of filing, and some have significant testimony and discovery periods. Commission actions also vary: In some states IRPs are merely recognized, while in others they are approved and found to be in the public interest.

New IRPs filed in 2019 by Appalachian Power (APCo), Indiana Michigan Power (I&M), Southwestern Electric Power Company (SWEPCo) and Kentucky Power call for additions of renewable energy over their respective planning periods. Based on the inputs and results of IRP analyses, the economic addition of renewables over these planning horizons would lower costs to customers compared to other resource decisions.

Read about the details of these and other projects in our Renewables section.

AEP Operating Company by State Case Number/Docket
Southwestern Electric Power Company – LouisianaSWEPCO LA I-33013
Southwestern Electric Power Company – ArkansasSWEPCO AR Doc.07-011-U
Public Service Company of Oklahoma - OklahomaDocketless Case
Kentucky Power Company 2016 IRP - KentuckyCase NO. 2016-00413
Appalachian Power Company – VirginiaCase NO. PUE-2016-00050
Appalachian Power Company – West VirginiaCase 15-2003-E-IRP
Wheeling Power Company – West VirginiaCase 15-2004-E-IRP
Indiana Michigan Power - IndianaDocketless Case