Waste-to-Profit April 12, YEARS

2 Fortune magazine, April 2, 2007 Over 11 graphics in this issue alone dealing with the environment and positive economics……

3 Fortune

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5 “The waste we collect helps power over one million homes.” “Waste Management - - Think Green.”

6 “…our innovations are designed to minimize their impact on the environment.” SIEMENS ELECTRIC

7 “ Clean Power Today! Instead of imagining a better environment, let us help you make it happen.”

8 “ All in favor of protecting the environment, raise your hand.” Home Depot

9 “With over 800 environmentally responsible, high quality papers, using DOMTAR EarthChoice helps protect his world and yours.” “DOMTAR EarthChoice …. high quality paper with a conscience.”

10 “ …. putting environmental savings in a whole new light.” Sea Gull Lighting

11 “… the sky is the limit……Because for all of us at ADM, there are no limits to a cleaner, greener world.”

12 United Technologies

13 AEP: An Introduction Among the largest U.S. electricity generators with 39,000 MW America’s largest coal user The nation’s largest electrical transmission system >240,000 miles of T&D A large consumer of natural gas Major wind developer 5 million customers in 11 states AEP Fuel Portfolio: Increasingly Diverse CoalGasNuclearHydroWind %0%9%3%0% Today70%20%7%2%1%

14 AEP is America’s Largest Coal User Coal consumed (~million tons / yr.) Coal combustion products (CCPs) produced (~million tons / yr.) AEP758 In all of the U.S

15 Sustainability ….. The ability to meet our present needs without compromising the ability of future generations to meet theirs

16 AEP ’ s 2006 Corporate Responsibility Report Our Vision for Sustainability safely provide reliable, reasonably priced electric power actively work to protect people and the environment. engage stakeholders continue our role in making people’s lives better today and for generations to come

17 Waste-to-Profit at AEP is enterprise-wide Asset Recovery Environmental Services Information Technology Generation Transmission Distribution Telecommunications Materials Services Fleet Workplace Services Land Management Procurement Aviation

18 Disposition Hierarchy  redeploy  re-stock  sell  scrap  donate  pay to dispose Asset Recovery Group Take surplus assets generate revenue balance risk address environmental concerns support customers’ missions

19 Representative Projects CCP utilization Power Plant demolition and salvage –electric motors –spare parts –scrap metals Spent Selective Catalytic Reduction (SCR) catalyst modules Used electrical equipment / transformers Information Technology equipment Mobile phones

Waste-to-Profit examples Scrap Metal sales $8.8 million Material sales $3.4 million from: Generation = $2.0 million Utility = $1.3 million Other = $62,000 Cost avoidance / savings$2.2 million _____________________ __________________________ Total $14.4 million (CCPs not included)

21 Coal Combustion Products (CCPs) CCP production and utilization at AEP –burned 74.8 million tons of coal in 2005 at 22 power plants –produced 8.2 million tons of CCPs –utilized 44% in concrete, structural fill, ice control (grit), etc. –represents ~$18 million / year in revenues and avoided costs CCP utilized in: –concrete, concrete block, road base asphalt and ice control –flowable fill and structural fill –paint manufacturing, Corvette body production, blasting grit, amber glass manufacturing, roofing shingles and wallboard –mined land reclamation (both contours and AMD treatment)

22 CCPs BOILER SLAG BOTTOM ASH FLY ASH SCRUBBER MATERIAL

23 CCP Utilization Avoids Disposal

24 Synthetic gypsum as a useable byproduct

25 CCP Utilization

26 CCP Utilization

27 CCP and Mine Reclamation CCP used to reclaim highwalls and to treat acid mine drainage

28 Reclaimed, Mined Land Use Tree Plantation for paper mill feedstock

29 Working with EPRI on Beneficial Uses for Old Poles and Crossarms

30 Biomass co-firing at Picway Plant Utilizing cabinet maker’s waste wood to augment coal-fired production of electricity

31 Power Plant Demolition & Salvage

32 Spent SCR Catalysts

33 Used Electrical Equipment

34 Used Electrical Equipment Some used electrical equipment is rebuilt Partially offsets cost of new units

35 IT End-of-Life Program contract is in place to take used IT equipment and refurbish or recycle AEP Asset Recovery is working to improve the return

36 AEP’s CO2 Capture and Enhanced Oil Recovery Northeastern Station 3&4 chilled ammonia process for capturing CO2 emissions from two AEP power plants : initial validation at Mountaineer Plant (4Q 2008) commercial-scale at Northeastern Plant in OK (late 2011) 1.5 million tons of CO2/year captured & sequestered approximate capital cost of ~$ million annual O&M of ~$12 million Enhanced Oil Recovery - - Used to increase production from mature oil fields water or gas traditionally was injected to increase pressure but recently are seeing CO2 being used sell the captured CO2 for Enhanced Oil Recovery in Oklahoma ~ End ~