Opportunities & Challenges
Our vision for the future is clear and the path forward is paved with opportunities and challenges. Here is a summary of what is before us at this point in our journey:
Business Opportunities for Success:
Opportunities and Challenges
- Infrastructure & Regulated Investments — As our financial commitment to generation related investments begins to wind down, our capital investment strategy will shift to infrastructure investments such as transmission and distribution that improve the reliability of service to our customers.
- Focus on Customer Experience & Improved Quality of Service — We seek to meet or exceed customer expectations as we provide reliable, quality, affordable service. The investments we make in grid reliability, technology and efficiency support brand loyalty and a high degree of customer satisfaction.
- An Engaged & Entrepreneurial Work Force — A culture that fosters employee engagement is better able to adapt to a changing business environment. Employee-led continuous improvement efforts are the key to AEP’s competitiveness and success.
- Operational Excellence & Environmental Leadership — We are committed to operational excellence that fosters ingenuity and innovation to enhance the quality of life for our customers, reduce our environmental impacts and develop a highly-skilled work force. We will be a good corporate citizen and help to boost the economic vitality of the communities we serve.
Challenges to Achieving Business Objectives:
- Unregulated Market Volatility — When capacity auctions do not create long-term price signals for all resources and compensate generators for investing in generation capacity, reliability of the system and the financial health of our company are at risk. We are working with our peers and the PJM Interconnection to address some the flaws in this system.
- Aging Infrastructure — Whether it is power plants, transmission or distribution lines or the locks and dams on the nation’s inland waterways, aging infrastructure threatens the reliability of service that we provide to our customers. Aging infrastructure is also a business opportunity as we invest in new facilities. Given the extent and magnitude of the aging infrastructure, addressing this issue in a timely and effective manner presents a challenge.
- Impact of New Environmental Regulations — The increasing scope and stringency of new and existing environmental regulations pose technical and financial challenges for our industry. We are especially concerned with the proposed New Source Performance Standards to regulate greenhouse gas emissions from new electric generation units and the intent for new rules covering existing plants. We believe there should be an appropriate balance between environmental protection, impact on company operations and the economy and cost to our customers.
- Lack of a National Energy Framework — Without a cohesive, national energy policy or framework that recognizes regional flexibility, there is little incentive to make strategic long-term investment decisions, such as building new generation capacity.