AEP Sustainability - Water

Water Management

Water quality, availability, use and management are increasingly important sustainability issues for society and our company. We are continuing to take steps to reduce our water consumption, improve water quality and address water availability issues as we comply with current regulations and prepare for new ones.

Water is essential for the production of electricity. Currently, 91 percent of power generated by AEP requires water. Water is used in the steam electric process to cool equipment, scrub flue gas and transport combustion byproducts – and hydroelectric power is completely derived from the energy of flowing water. The water we use is generally returned to its original water source. Water consumption occurs when some of the water is lost to evaporation or to a water-consumptive process, such as flue gas scrubbing. Our captive barge fleet operates on several rivers and relies on consistent water levels to maintain operations, delivering fuel and other supplies to our generating facilities. Our coal and natural gas supply chains also rely on water to mine the coal and extract the natural gas.

As much as we need access to water, we also have a responsibility to manage this resource to minimize potential impacts and to reduce consumption. As AEP continues to diversify its generating portfolio and retire coal generation capacity, our water use will continue to decrease, and we have already significantly reduced our water footprint through plant retirements.

Since 2013, we have reduced our water use from 7,349 million gallons/day (MGD) to 4,173 MGD – a reduction of nearly 43 percent. During that same time period, we have reduced our water consumption by almost 58 percent from 315 MGD to 132 MGD.

We participate in collaborative industry research to find new ways to reduce the use and consumption of water by power plants. In 2019, AEP received two Electric Power Research Institute (EPRI) Technology Transfer Awards, which were the result of research projects involving our western fleet. The first was the study of three AEP power plants and the use of alternative water supplies and transfers between water basins. The study provided understanding of the drivers for, and implications of, using alternative water sources. For example, the use of reclaimed municipal wastewater for the Comanche Plant in Oklahoma resulted in cost savings for Public Service Company of Oklahoma customers and revenue for the City of Lawton, while eliminating our need for fresh water.

The second award recognized the application of case study research at our John W. Turk, Jr., Plant in Arkansas. The plant normally uses water from the Little River, a tributary of the Red River, which is a source of high dissolved solids that has affected plant operations. For example, during 2018, the Red River was flowing at a higher-than-normal level near the plant while the U.S. Army Corps of Engineers was attempting to perform repairs on the nearby Lake Millwood spillway upstream of Turk’s intake.

The Corps’ activity allowed poor-quality water to approach the Turk Plant’s water intake system. The case study looked at on-site alternatives (adding pond storage capacity) and a watershed-based solution. The results found that by working with the U.S. Army Corps of Engineers to optimize water releases from the nearby reservoir, AEP could address the plant’s water needs and provide a net benefit of $5 million through avoided generation curtailments or the need to build additional water storage capacity.

We are also working with EPRI to test the application of a water footprint tool. A water “footprint” is the amount of water used in the production of the goods or services by a business – for example, the amount of water needed to make a pair of jeans or to produce a kilowatt of electricity. This analysis will help us better understand how we use water resources, which will support better water management, reporting, benchmarking and disclosure activities at AEP’s generation facilities.

Water Use Reporting

Because we place a high value on the importance of transparency, AEP extensively reports on our usage and management of water throughout our system in different forums. We do this through both required reporting, such as the U.S. Energy Information Administration, and through voluntary reporting efforts. For example, we participate annually in the CDP Water Survey. The 2018 questionnaire was issued on behalf of 655 investors representing $87 trillion in assets who seek business-critical information about water consumption and water use strategy and planning. In addition, AEP provides extensive water data in our Global Reporting Initiative (GRI) report.

As part of our disclosure, we report if our ability to generate electricity has been compromised by inadequate water (droughts or poor quality) or too much water (floods). For example, in 2018, a 500-year flood event occurred at our Indiana Michigan (I&M) hydroelectric projects on the St. Joseph River in Michigan. In some of these areas, the St. Joseph River crested at levels two feet higher than the prior record. The flood impacted our ability to generate electricity and disrupted distribution service to the flooded areas. In response, we created detailed standard work procedures to address the changes we need to make in our work during times of high-water events. This includes operating spillway gates at certain plants or electrically disconnecting the hydro projects. We also purchased additional equipment to use during flood events and created a staffing plan to enable 24/7 coverage at the plants during emergency events.

Water Management in High-Risk Areas

AEP operates several power plants in areas that necessitate the careful use of water. Since 1999, the Texas Commission on Environmental Control has mandated that all Texas water rights holders implement a water conservation plan. Each entity is required to have voluntary, site-specific five-year and ten-year water conservation goals that must be updated every five years. Annual updates must be filed with the Texas Water Development Board. We have comprehensive water conservation plans in place for the Oklaunion, Pirkey, Welsh, Wilkes and Knox Lee Power Plants. In 2017, the plants conserved an estimated 1,700 million gallons through these plans, demonstrating their effectiveness.

We also have a Drought Contingency Plan in place for the Knox Lee Plant, and we have to comply with Drought Contingency Plans for three water providers we secure water from to operate the plant. These plans are based on the storage volume of area reservoirs. We work with water providers to ensure the plans call for reasonable actions.

AEP is also participating with other water users during water supply planning efforts. Texas is divided into 16 regional water planning groups that are charged with developing cost-effective solutions to ensure adequate water supply for all users in their regions. The regional water plans are incorporated into the state water plan, which is updated every five years. By frequently planning for future water supplies, the state is able to plan for and finance water supply projects that are needed by communities, big and small.

Watershed Protection

Water is important to power production, but it’s also essential for agriculture, drinking water and economic growth. In addition to planning for water needs, the states of Texas and Arkansas have initiatives to protect watersheds, in which AEP participates. For example, AEP Texas participates in a state-mandated effort to quantify necessary environmental flows for streams and rivers. Environmental flows are the properties of water flow that strengthen or support aquatic ecosystems and human livelihood.

In addition, AEP participates in voluntary efforts to protect the watershed of Caddo Lake, a Ramsar Convention designated wetland area. The Caddo Lake Ramsar wetlands is one of only 26 such sites in the United States and were the 13th site to gain this designation. In Arkansas, AEP is actively involved in the Illinois River Watershed Partnership, including planting trees to stabilize riverbanks.