Environmental Performance

As our business changes, some things remain constant. One of those is our commitment to environmental excellence and stewardship. To help us achieve the level of excellence we strive for, we push ourselves toward prevention, accountability, engagement and continuous improvement.

Environmental compliance is a high priority for the lifecycle of every project we undertake. Our goal is zero enforcement actions – zero violations of environmental regulations or laws.

Our facilities are subject to environmental regulatory and permitting requirements at the federal, state and local levels for which we must demonstrate compliance. Our goal is zero enforcement actions – zero violations of environmental regulations or laws. We are also subject to routine environmental inspections of our facilities through scheduled – and unannounced – visits. During these visits, regulators inspect physical facilities and monitor our compliance with regulatory requirements, permit limits and record-keeping obligations.

Whenever agencies identify concerns, we work with them to address those issues in a timely fashion. This could include identifying and implementing any corrective measures that may be needed to mitigate future risks. One way we check on our own compliance is through audits. Audits provide additional focus on controlling risks and providing assurance that robust compliance processes are developed and implemented system-wide. In 2017, we conducted internal audits of environmental programs at more than 30 locations.

Environmental audits reveal areas where performance related to regulatory requirements and company policies may be improved such as recordkeeping details, inspection criteria, training topics and equipment configuration. Auditors also work to recognize practices that go beyond requirements to bring about robust and sustained compliance. Although reports are site specific, results are aggregated and shared system-wide to improve performance throughout AEP.

Our responsibility to environmental compliance will continue for requirements that remain effective at AEP-owned properties where generating units have been retired. This includes many existing state environmental requirements, in particular, those related to the management of water and coal-combustion byproducts. We continue to work closely with regulators as we move through the decommissioning process.

Measuring Performance to Drive Improvement

For many years, AEP’s Generation business unit has used metrics to encourage self-reporting of events and to improve environmental performance. An Environmental Performance Index (EPI) was established to set annual goals related to opacity, water discharge permits and oil and chemical spills at our generation facilities. In the past, the EPI tracked only events over which we had immediate and significant control.

In 2017, we expanded the EPI to include all reported events specific to NPDES permit expectations and spill events. By expanding the focus to all events, we are increasing awareness on prevention, which encourages sharing as we learn and drives us to be more proactive.

We set targets focusing on continuous improvement as we strive for zero enforcement actions and zero events. In addition, we started a program for good catches for environmental performance, similar to our safety and health Good Catch program. This demonstrates AEP’s commitment to an engaging and accountable culture – using knowledge-sharing and lessons learned to prevent future non-compliance events.

Environmental compliance is a high priority for the lifecycle of every project we undertake. In our Transmission business, where a large part of construction work is taking place, we developed a mandatory environmental compliance training program for all members of the project teams, and we provide support from environmental specialists and engineers to achieve full compliance with environmental permit requirements. This is important to us as we invest approximately $3 billion annually during the next three years to modernize transmission infrastructure across the country.