Today’s Environment

AEP’s transformation - to adapt the legacy energy system to become a smarter, resource-diverse power grid that is reliable, secure and modern - reflects the transition happening across our industry.

For 110 years, we have thought about our business in terms of generation, transmission and distribution – a one-directional flow of power and information to customers. That’s how the electric utility system was originally designed and the prudency of those decisions and customer rates were determined by regulators to support that structure.

Today, there is a clean energy transition under way to reduce carbon, enable large- and small-scale renewables, integrate advanced technologies and provide power and information that flow both ways. In addition, technology plays an important role in energy efficiency because it makes the system more efficient, helps consumers manage their energy usage, lowers cost for customers and AEP, and helps to reduce emissions. As we embrace these changes, we also need to define the rules and policies that govern our industry, enabling us to be responsive to customers’ needs.

Among the catalysts for change:

  • Technology advancements
  • Increasing demand for clean energy
  • Customer attitudes
  • Commodity prices
  • Environmental regulations
  • Competitors’ actions
  • Public policies
  • Declining cost curves

To meet these challenges, we are developing new partnerships and building on established relationships with our customers. Our goal is to make the customer experience unique, while providing access to the power grid and its services to all customers. In the process, we are reinventing ourselves by focusing on customers, resources and technologies of the future, being disciplined in our allocation of capital and fostering a customer-centric culture of innovation and operational excellence.

Our investment strategy is shifting from being compliance-driven to optimizing the system for efficiency and operational excellence, diversifying our resource portfolio to reduce environmental impact and investing in infrastructure that delivers positive value to our customers and investors.

This transformation presents new opportunities for growth but also carries a degree of risk and responsibility. We are engaging in discussions with policymakers, regulators, customers, investors and stakeholders about how we are evolving and how they can support our efforts.