AEP Sustainability - Stakeholders

Stakeholder Engagement

Listening to and engaging with stakeholders has long been a priority for AEP. It allows us to hear different perspectives we might not have considered, mitigate risks and identify opportunities, build stronger relationships, and arrive at consensus or shared motivation for meaningful outcomes.

When we engage our stakeholders about sustainable electricity, they ask us about reliability and affordability, energy efficiency, clean energy, distributed resources, and our investments to modernize the grid. The majority of our stakeholders ask if we are sufficiently prepared for the transition to a clean energy economy and how fast we will get there.

Strategic Priorities for Sustainable Engagement

Our Purpose:
Inspire and engage our stakeholders to co-create a sustainable energy future and make a positive difference.

CustomersImprove our ability to partner with sustainability-oriented customers to meet their needs, prevent disintermediation and promote regulatory and policy changes that support a cleaner energy future.
EmployeesEngage and empower our people to lead the future of sustainability at AEP to attract and retain the best talent and succeed in our transformation journey.
InvestorsLeverage sustainability to position AEP as an attractive investment, and prevent divestment.
NGOsStrengthen NGO-AEP relationships and continue to raise awareness internally about NGO activities to capitalize on collaboration opportunities.
CommunitiesStrengthen our brand and stakeholder relationships locally to build support for infrastructure investments and new programs and services.
PolicymakersProactively engage policymakers to enable our clean energy strategy.

Customer focus has long been one of AEP’s core values. Every time a customer interacts with us, directly or indirectly, it creates an experience. Our goal is to develop an exceptional experience, every time. By engaging our customers, we are able to identify energy solutions that save them money, enable efficient use of energy, and optimize the grid to meet their changing energy needs. This includes everything from giving customers good information when the power goes out and supporting their use of distributed resources, to delivering the clean energy they want for their homes and businesses.

We use both our regulated and competitive businesses to achieve this outcome. We bring our whole team to the table, recognizing that being flexible can mean the difference between a satisfied customer and a missed opportunity. This gives us greater flexibility to deliver on customer expectations.

In 2019, we completed work with the World Resources Institute’s (WRI) Clean Power Council and the Edison Electric Institute (EEI) to develop a new industry-standard carbon and energy report for customers. Accessing their carbon data is important for customers because AEP is a big part of their Scope 2 emissions. The collaboration included utilities, large customers, EEI and WRI. Following a successful pilot, the report will be accessible for customers starting in 2020. This effort reflects the power of partnerships with our customers to deliver the types of solutions they want.

As we build new or rebuild older facilities on our system, we often impact the communities where that work is occurring. Whether it is a disruption caused by construction in a neighborhood or the need to restore habitat when the work is done, it is important that we remain open, honest and responsive about what we are doing.

AEP engages stakeholders through proactive outreach to educate and gain support for the company’s plans to address the needs of its transmission system.

In 2019, AEP logged more than 79,000 interactions with landowners and acquired more than 3,600 easements, using condemnation on less than 1% of these acquisitions. In 2020, we shifted one of our in-person open houses to online virtual meetings due to health concerns associated with COVID-19. The virtual open house is an online version of the community open house normally hosted by project teams. Landowners are able to learn about the project timeline, need, proposed structures and construction process through interactive maps and information boards. AEP also provides landowners with the opportunity to submit comments and discuss their property in detail.

We engage our communities in many other ways, including volunteerism. It is not unusual to find our employees coaching youth league teams, organizing food drives, or serving on local boards and commissions. Learn more in the Volunteerism section.

In 2019, Sustainable Tulsa recognized Public Service of Oklahoma (PSO) as a Henry Bellmon Award recipient. The award distinguishes organizations committed to developing people, profit and planet – otherwise known as the “triple bottom line” – and rewards leadership and effectiveness in social, economic and environmental sustainability.

The universe of environmental, social and governance (ESG) ratings and rankings continued to expand in 2019, as did the demand for ESG-related information. Climate change, governance, social performance, risk and strategy continue to be the main issues. Many institutional investors issued clear intentions to consider ESG performance in their investment decisions, demonstrating the drive for more robust, consistent disclosure and engagement.

We continued our engagement with Climate Action 100+ in 2019 – focusing on climate change, governance, risk and strategy. In early 2020, the conversation expanded to include AEP’s approach to a Just Transition and climate lobbying. Learn about AEP’s efforts in the Climate Change and Climate Lobbying sections of this report.

In response to this growing interest from our investors, we have sharpened our focus in this area and responded to a dozen ESG investor-focused surveys in 2019. One challenge we must overcome is the lack of uniformity and consistency in ESG ratings and rankings, which often creates confusion and frustration for users of this data. We invest significant time reviewing and correcting data to ensure stakeholders get an accurate picture of AEP’s ESG performance. We will continue to advocate for a universal, consistent approach to ESG disclosure and the ratings and rankings that accompany it.

In 2018, AEP published a clean energy report, which outlines our climate-related risk management process and climate governance, as well as related opportunities and challenges. We plan to update this report in 2020. In addition, AEP issues an annual EEI ESG/Sustainability investor report. Together, these disclosures provide a complete picture of how AEP is managing its transition to a clean energy/low carbon future, as well as setting new mid- and long-term goals for carbon emission reductions.

Among our key stakeholders are non-governmental organizations (NGOs), including environmental organizations. We engage with these groups in many different ways. Sometimes we meet in person to discuss specific topics. At other times they are intervenors in our regulatory proceedings. These groups are important stakeholders to AEP because they bring forward different perspectives and ideas, which are effectively used to test the validity of AEP’s approach to managing its business.

We also look for opportunities to collaborate, such as our mutual support of advancing adoption of electric transportation. We believe strong relationships with NGOs create better partnerships to address issues that can influence or shape our business future. Through our commitment to transparency, engagement, candor and honesty, we have seen these relationships become increasingly complementary and collaborative.

In May 2019, AEP co-hosted the IllumiNation Energy Summit in partnership with The Ohio State University, Battelle Memorial Research Institute and Smart Columbus. The Summit sparked conversations with policymakers to reimagine the future of energy. Over 350 utility leaders, public utility commissioners, state legislators, startup companies, technology providers and other thought leaders attended the event, which featured a large-scale technology exhibit and thought-provoking panel discussions. The Summit recently was named Best Overall for Event Marketer’s first-ever Hidden Gems Winners List—the best B-to-B events under 5,000 attendees.

The intent of the conference was to bring together policymakers, technology providers, and others to enable critical thinking regarding the advancement of the customer experience and the policy framework for execution.