American Electric Power

Subsidiaries

The company is divided into seven major geographic local operating companies:

AEP Ohio

AEP Ohio serves 1.5 million customers in central, southern and northwestern Ohio. For years, it consisted of two operating companies, Ohio Power and Columbus Southern Power. However, in 2014, Columbus Southern was merged into Ohio Power, leaving Ohio Power as the legal operating company for regulatory purposes.

AEP Texas

AEP Texas was formed from a merger of various predecessor utilities, and joined AEP as part of its acquisition of Central and South West Corporation in 1997. It consists of AEP Texas North Company (formerly West Texas Utilities), which operates in west Texas, and AEP Texas Central Company (formerly Central Power and Light), which operates in south Texas.

Appalachian Power

Appalachian Power (AP) is based in Charleston, West Virginia and owns the naming rights to Appalachian Power Park in Charleston. AP serves about one million customers in parts of central and Southern West Virginia, Southwest Virginia and parts of Northeast Tennessee, specifically Kingsport. Cities in the Appalachian Power service territory include Charleston and Huntington, West Virginia; Roanoke, Virginia and Kingsport.

Until the 21st century, AEP's operations in Tennessee were part of a separate operating company, Kingsport Power Company. However, since the turn of the millennium, Kingsport Power's operations have been almost completely merged with those of Appalachian Power, and AEP considers Appalachian Power to be the operating company in the Kingsport area. While Kingsport Power still legally exists, the Kingsport Power name is almost never used anymore except for regulatory formality.

Wheeling Power, based in Wheeling, West Virginia, was long treated as a de facto part of Ohio Power, but is now reckoned as part of Appalachian Power.

Indiana Michigan Power

Indiana Michigan Power serves northeastern and east central Indiana, including Muncie and Fort Wayne; and parts of north central Indiana and southwest Michigan, including South Bend, St. Joseph, Benton Harbor and Three Rivers.

In 2015, AEP supported the utility bill HB 1320 in Indiana in an effort to halt rooftop solar in the state. The bill is designed to curtail the regulation of Indiana's oil and gas industry, as well as end consumer energy choice.

Kentucky Power

Kentucky Power serves most of Eastern Kentucky, the area abutting the Appalachian Power service area, including communities of Pikeville, Hazard and Ashland. Kentucky Power is currently headquartered in Frankfort, Kentucky but announced on July 13, 2016 that they will be moving their state headquarters to Ashland, Kentucky by January 1, 2017.

Public Service Company of Oklahoma (PSO)

PSO was one of the four CSW operating companies when CSW merged with AEP. Incorporated in 1913, PSO serves approximately 540,000 customers in eastern and southwestern Oklahoma. Its headquarters are in Tulsa. PSO has 4,269 megawatts of generating capacity and provides electricity to 232 cities and towns across a service area encompassing 30,000 square miles.

In April, 2014, Oklahoma Governor Mary Fallin signed into law an AEP-backed bill that would add a tax onto anyone in the state who adopted rooftop solar. This anti-solar legislation was headed by Rep. Mike Turner (Oklahoma politician) (R. Edmond), known for both his support of ending rooftop solar and legislation he introduced to end all marriage in the state. After partnering with AEP to pass the legislation, Rep. Turner suffered a failed federal congressional race.

Southwestern Electric Power Company

Often called SWEPCO, the Southwestern Electric Power Company serves most of western Arkansas, northwestern Louisiana, and northeastern Texas. Like PSO, it was one of the four CSW Operating Companies.

Between 2013 and 2014, AEP, under subsidiary SWEPCO, tried to eliminate a fundamental solar policy, net metering, at the LPSC several times, and failed each time. SWEPCO also backed openly anti-solar candidate Eric Skrmetta, who has been widely criticized for receiving 2/3 of his campaign contributions from entities he regulates.

In Arkansas, SWEPCO is expected in 2015 to ask regulators to allow them to pass along the costs of building and running the John W. Turk Jr. Coal Plant, the most expensive project in state history, to Arkansas ratepayers. This process is expected to elicit similar controversy to what has plagued the plant since construction.

Other subsidiaries

AEP also bought much of the town of Cheshire, Ohio, where the Gavin Power Plant is located, due to pollution issues. In 2004, AEP announced their plans to build one, or more, integrated gasification combined cycle (IGCC) coal-fired power plant which is expected to reduce emissions while providing additional electricity capacity to the customers served by AEP.

The company also operates its own inland barge line, AEP River Operations (formerly MEMCO Barge Line), and owns major tracts of land throughout its service areas.

In August 2008, AEP has formed a joint venture company with Duke Energy to build and own new electric transmission assets.

It is the largest shareholder in the Ohio Valley Electric Corporation (OVEC). OVEC is an associate company of AEP, not a subsidiary, because AEP owns less than half of it.

Nuclear

AEP owns and operates the Donald C. Cook nuclear power plant. This accounts for 6% of the generation portfolio.

Hybrid technology

AEP is expanding its green efforts to include 18 more International DuraStar hybrid diesel trucks. AEP is also teaming with Ford for the integration of a Vehicle-To-Power grid communication system, which allows hybrid vehicles to communicate with power companies to determine where, how long, and what it would cost to re-charge a hybrid during travel.

Solar and wind energy

AEP recently signed a deal with Wyandot Solar LLC to purchase power from one of the largest solar fields in the eastern United States of America, based in Upper Sandusky, Ohio.

AEP owns and operates the Desert Sky Wind Farm and the Trent Wind Farm.

In 2009, AEP partnered with other energy companies in commissioning a study of how to transmit wind energy generated in the Upper Midwest to consumers in the East.

AEP currently gets .02% of its energy from renewable energy resources like wind and solar. They are planning to increase their reliance on coal in the next five years. They occasionally support renewable energy in their utility territories, but only when they can own it through their regulated assets.

PATH Proposal

In 2007, AEP teamed with Allegheny Energy to propose the US$1.8 billion (changed to US$2.1 billion in 2011) Potomac-Appalachian Transmission Highline (PATH), a 290-mile (470 km), 765  kilovolt transmission line that would run through West Virginia, Virginia, and Maryland. According to Joe Denault, a volunteer spokesperson for the proposal, the PATH proposal would incorporate new technology to reduce carbon dioxide emissions by 380,000 short tons (340,000 t) a year; allow for the transmission of renewable energy sources, such as wind, solar, and hydroelectric; and generate 5,700 jobs, with $420 million in employee compensation annually. However, many of these claims are disputed and the proposal must pass several legal hurdles before moving forward. On August 24, 2012, PJM Interconnection officially removed the PATH project from its long-range expansion plans, citing a slow economy for reducing the projected growth in electricity use.

History

The American Gas and Electric Company, which would be renamed American Electric Power in 1958, was incorporated in 1906. It replaced Electric Company of America, a holding company that had existed since 1899. It built "the first plant in the world to reheat steam to do double duty in the process of generating electricity" at Philo, Ohio in 1923. Several of its holdings were divested following the passage of the Public Utility Holding Company Act in 1935; these holdings would include Atlantic City Electric (now a subsidiary of Pepco Holdings) and Scranton Electric (since absorbed by PPL). However, it retained its Central System, which ran between Michigan and Virginia. It moved its headquarters from New York City to Columbus, Ohio in the 1980s. On May 1, 1999, The North American electric power industry tested and cleared 75 percent of the U.S. electricity system for compliance with the Year 2000 computer glitch. On August 31, 2004, American Electric Power Company's $10 billion acquisition of the Central and South West Corporation was approved.

Acquisitions

Environmental record

The Political Economy Research Institute ranks American Electric Power 45th among corporations emitting airborne pollutants in the United States. The ranking is based on the quantity (91,000,000 pounds (41,000 t) in 2005) and toxicity of the emissions. Major pollutants include sulfuric and hydrochloric acids, and chromium, manganese and nickel compounds. Overall, electric power plants, such as those operated by AEP, account for almost "70 percent of sulfur dioxide emissions each year and 30 percent of nitrogen oxides emissions." Individually, these pollutants cause serious respiratory damage and other illnesses; when combined, they create what's known as acid rain, which causes long term damage to the environment and deterioration of natural and man-made structures. Environmental Protection Agency has named American Electric a potentially responsible party at the Green River Disposal Inc. Superfund toxic waste site.

Justice Department lawsuit

The United States Justice Department filed a lawsuit on November 3, 1999, against AEP and six other companies for violating the Clean Air Act. On October 8, 2007, AEP agreed to install US$4.6 billion in equipment to reduce emission, as well as pay a US$15 million civil fine and provide US$36 million for environmental projects and $24 million for environmental mitigation. The company will cut 813,000 short tons (738,000 t) of air pollutants annually once all of the controls are installed. According to the press release, the agreement imposes caps on emissions of pollutants from 16 plants located in five states. The facilities are located in Moundsville (two facilities), St. Albans, Glasgow, and New Haven (two facilities), West Virginia; Louisa, Kentucky; Glen Lyn and Carbo, Virginia; Brilliant, Conesville, Cheshire, Lockbourne, and Beverly, Ohio; and Rockport and Lawrenceburg, Indiana.

Political influence

AEP's political action committee, the American Electric Power Committee for Responsible Government, has increased spending since the 1998 election cycle, reaching $1.4 million in contributions in 2007-2008, 57 percent to Republicans. Also in 2008, American Electric Power significantly increased lobbying expenditures from less than $2 million a year to over $11 million, as climate legislation became a key issue in Washington. As of December 2011, lobbying expenses remained between $6 million and $10 million per year.

In 2009, AEP CEO Michael G. Morris contributed $100,000 to Newt Gingrich's American Solutions for Winning the Future, which supports increased oil drilling and opposes mandatory limits on greenhouse gas pollution. American Electric Power is also a member of the American Coalition for Clean Coal Electricity, a lobbying and marketing organization which opposes President Obama's climate and clean energy legislation.

Paul Loeffelman, AEP director of environmental public policy, served as co-chair of the ALEC Energy, Environment, and Agriculture task force, which in 2012 adopted model legislation entitled the "Electricity Freedom Act", designed to repeal state-level mandates requiring electric utilities to produce some of their electricity from renewable sources. In 2013, ALEC-affiliated legislators introduced bills in 13 states designed to weaken or repeal renewable energy mandates. None of the bills passed in 2013.