AEP produces 2014 Corporate Accountability Report: ‘Building the Utility of the Future’

AEP’s 2014 Corporate Accountability Report can be viewed at AEPsustainability.com.

What does the utility of the future look like?

According to the 2014 AEP Corporate Accountability Report, “The electric utility industry is undergoing a rapid and significant transformation, and the only thing that seems certain is change. We cannot see into the future, but we must be prepared for it. At AEP, being prepared means thinking about the future of our industry and how electric companies of tomorrow will differ from those of today.

“We know the process of changing our business is a journey with no end — much like our quest to be a sustainable company. We are grounded in our conviction that we must balance the needs of customers and investors, and that our employees hold the keys to our success.” 

The 2014 report once again combines the company’s Annual Report to Shareholders with what was formerly referred to as the Corporate Sustainability Report. It is AEP’s fifth integrated report and eighth year of reporting on its performance.

This year’s report is again fully web-based and is complimented by an application that will make it available on the Apple iPad in the near future. The responsive design of the website makes it available on any desktop computer or mobile device (smartphone, tablet, etc.).

The 2014 report focuses on five key areas: About Our Business (Utility of the Future); Business Performance; Technology & Innovation; Customers & Communities; and Our Work Force.

The report says the utility of the future will need to:

1. Develop a diverse and well-balanced fuel resource portfolio that is more secure, reliable and less carbon intensive than it is today.
2. Modernize the grid to enable the management of physical assets with information technology and data to optimize efficiency and value, while providing a pathway for renewable energy and other sources to reach the market.
3. Focus on customers by delivering superior customer service and bringing investments closer in line with what customers need and want.
4. Work constructively to influence public policies and regulations that move away from incentives and subsidies and toward value creation and fairness — especially for low- and fixed-income consumers.
5. Develop a work force that is entrepreneurial, engaged, collaborative, adaptable and flexible, along with a culture that supports those qualities.
6. Deliver strong, reliable financial performance that meets or exceeds investor expectations.
7. Be a good corporate citizen of our communities by supporting volunteerism, philanthropy, economic development and environmental stewardship and building strong, trusting relationships with stakeholders.

The “Our Work Force” section of the report describes how AEP is working to engage all of its employees through its culture commitment, diversity initiatives and continuous improvement efforts.

“The energy business has changed dramatically during the past few years and so has AEP,” said Nick Akins, AEP chairman, president and chief executive officer, in his message in the report. “These changes have led to some positive outcomes, including greater fuel diversity, environmental gains, new jobs and grid modernization.

“We provide a vital service that keeps people safe, supports the economy and sustains quality of life,” Akins continued. “But the pace of change is accelerating, and what got us through our first century won’t get us through our second. To sustain our targeted earnings growth, we must adapt to the new realities of our operating environment by leveraging our strengths as a regulated electric utility to grow our business for the future. We have more confidence than ever in our strategy to meet the challenges and opportunities before us, and we are taking steps to execute our strategy.”

Under “Business Performance,” AEP highlights its outstanding financial, safety and environmental performance during 2013, and discusses the many challenges — both current and future — of maintaining a reliable electric grid in this country.

In the “Technology & Innovation” section, the reports notes that, “The technology and gadgets we rely on today are much faster, more efficient and less costly than they once were. Electric vehicles, smart appliances, energy storage and distributed solar generation are among the technologies we are adapting to.”

“As would any organization striving to become more sustainable, we not only stay focused on the future, we plan for it and sometimes strive to shape it,” Akins added. “Innovation has enabled us to meet challenges over and over again that improved our efficiency, our reliability and our customer service.”

“We provide a vital service that keeps people safe, supports the economy and sustains quality of life,” AEP CEO Nick Akins said in the report.

Under “Customers & Communities,” the report says, “Customers judge their experience with any company in terms of cost, quality and service. They also measure value by how well a company responds when something goes wrong. Demonstrating that we care about our customers in every interaction we have with them is the hallmark of a positive customer experience. Providing reliable, quality, affordable service is just the beginning. We have to understand what our customers want, sometimes before they do, and be ready to meet those expectations. If we do it right, the payback for AEP is brand loyalty and a high degree of satisfaction for our customers.”

The “Our Work Force” section describes how AEP is working to engage all of its employees through its culture commitment, diversity initiatives and continuous improvement efforts.

“As we move forward on this journey of change and adaptation, our values will be our north star,” Akins concluded. “In 2013, we updated our corporate values to reflect who we are today and who we must become if we are to transform into the utility of the future. We worked with our employees to help us shape this vision and we agreed that zero harm, customer focus, integrity and stewardship, and the ability to adapt and achieve are the values that will determine our success. We also worked with employees to articulate our purpose. It’s simple and precise – We power life’s possibilities^sm.”