On August 31, 2004, AEP released a report entitled, "An Assessment of AEP's Actions
to Mitigate the Economic Impacts of Emissions Policies." This assessment was conducted
at the request of a group of shareholders who requested an evaluation of the actions
that American Electric Power is taking to mitigate the economic impact of increasing
regulatory requirements, competitive pressures, and public expectations to significantly
reduce carbon dioxide and other emissions.
A subcommittee of independent directors of the Policy Committee of the AEP Board
of Directors prepared this report in response to this shareholder proposal. This
subcommittee evaluated the actions the company has taken and is taking to address
emissions of carbon dioxide and other air emissions; assessed the technologies available
to the company for reducing these emissions; and reviewed analyses of the costs
of several control scenarios.
The subcommittee's report affirms that the actions that AEP has taken over the last
decade constitute a solid foundation for the company's future efforts to address
the intersection between environmental policy and business opportunities. The assessment
identifies the central challenge the company faces as being that of making decisions
about large investments in long-lived assets in a setting of uncertain public policy
and rapidly evolving technology. The authors conclude by recommending forceful and
serious advocacy of highly efficient control programs; proactive leadership in technology
development and operation; discipline in capital allocation decisions; openness
to partnerships in technology and policy; and continued transparency of action as
being essential elements of the path ahead for AEP.
