AEP Produces 2016 Corporate Accountability Report: ‘The Power of Diversity’

The Corporate Accountability Report combines the company’s Annual Report to Shareholders with what was formerly referred to as the Corporate Sustainability Report. 2016 marks AEP’s seventh integrated report and 10th year of reporting on its performance.

“Our vision is to deliver an energy future built on diverse energy resources and an interactive power grid that is more reliable and secure, with technologies that enhance access and services for all customers.”

That message is part of Nick Akins’ introductory letter in AEP’s 2016 Corporate Accountability Report, appropriately titled “The Power of Diversity.”

“Our strategy is to modernize the power grid to support a reliable, clean energy future and modern technologies, with a focus on three key elements: building infrastructure and technology to give customers choice about how they use energy, supporting strong communities with economic development opportunities, and providing investors a long-term opportunity for sustainable shareholder returns,” continued Akins, AEP’s chairman, president and chief executive officer. “Our employees help us implement this strategy with a disciplined and execution-oriented approach supported by a culture of innovation, agility and continuous improvement.”

The Corporate Accountability Report combines the company’s Annual Report to Shareholders with what was formerly referred to as the Corporate Sustainability Report. 2016 marks AEP’s seventh integrated report and 10th year of reporting on its performance.

As the demand for transparency and public disclosure continues to grow, so do AEP’s efforts around sustainability and performance reporting. AEP’s Corporate Accountability Report is used to communicate and respond to stakeholder concerns, manage shareholder engagement, drive performance, and recruit and retain employees — while proactively telling AEP’s story. AEP’s report has evolved from what was once a past performance-based environmental report into a more future-focused integrated report — tying our financial performance to our environmental, social and governance performance to show linkage with AEP’s business strategy.

So what’s new for this year?

• This year’s report provides information on the Enterprise Sustainability Council, a new governance structure around the report. Co-chaired by representatives from the Corporate Sustainability and Ethics and Compliance departments, the Council consists of some of the top leaders and decision-makers from across the company. The Council provides a forum for key decision-makers to come together, and reflects the maturity of sustainability and the reporting process at AEP. It has become embedded in AEP’s business strategy, supporting our culture initiatives of strategic alignment and employee engagement, as well as, our continuous improvement efforts. The Council also reflects AEP’s commitment to sustainability reporting — addressing stakeholder concerns by telling our balanced, accurate and complete story.
• The 2015 Performance Summary is an interactive information graphic that visually depicts AEP’s social, environmental, economic and financial performance. The Summary takes you on a journey highlighting not only AEP’s strong performance in 2015, but also the important connection between our success and the strategic alignment of our dedicated employees – who power everything we do.

The 2016 report focuses on three key areas: Customer Experience, Sustainable Electricity and Strategy for Growth.

A key part of the Customer Experience section focuses on “customer expectations.” The report notes that “the conveniences we get from technology make life easier, allow us to conduct business at any time, and give us portability and mobility. Customers want the same interactive experience with AEP – personal, online, mobile, in ‘the cloud,’ and securely delivered to their newest mobile device. It also has to be simple, fast and provide value – something that is as individual as customers themselves.” AEP’s challenge then is to be innovative in the products we offer to our customers and help to transform the regulatory process, public policies and pricing plans that enable change at the same speed that technology and customer demands are changing.

The Sustainable Electricity section includes a glimpse at what a “clean energy future” might look like and notes that “our strategy to diversify includes increasing our use of natural gas and renewable generation and reconfiguring the grid to support further integration of distributed energy resources, increased energy efficiency and demand response, and the growth of other customer-driven technologies.”  The report also notes that AEP is “investing in energy storage technologies that have the capability to improve the efficiency of the power grid and enable reliability with greater use of variable resources in the future.”

In Strategy for Growth, the report notes that between 2016-2018, AEP plans to invest approximately $5 billion, annually. Most of these capital investments – 95 percent – will be allocated to our regulated businesses; 74 percent will be allocated to transmission and distribution. “Tomorrow’s energy company must be adaptable, agile and ready to embrace new opportunities as they arise,” the report says. “We are deploying capital where it is needed and can benefit customers and investors the most. For example, the upgrade of our customer contact center technology which is under way will enable us to engage customers across multiple platforms in one place, providing the type of service customers expect. Our investments in transmission improve reliability for all customers and enable the connection of renewable resources to the grid. And our strategy to invest in large-scale universal solar will allow us to cost-effectively and efficiently deliver clean energy to more customers.”