Corporate Ecosystem Services Review at AEP’s Rockport Plant

Diane FitzgeraldManaging Director - Environmental Affairs

AEP

EPRI Technology Innovation Project

• Purpose: To conduct a pilot project to identify the ecosystem services that coal-fired power plants use and impact

• Outcome: Improve operational efficiencies, reduce societal impacts of power generation and establish a better position to respond to emerging government regulations

• Approach: Applying World Resources Institute method

• Test Case: American Electric Power• Schedule: Final report end of 2010

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Applying WRI Methodology

• Funded by EPRI Technology Innovation Grant.

• Stakeholders expressed interest in AEP’s biodiversity impacts

• Goals listed in AEP’s accountability report

• Complementary to biodiversity initiative

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American Electric Power

• Serve 5.2 million customers in 11 states• Over 38,000 MW generating capacity, 67% utilizing fossil

fuels• Nation’s largest transmission system–39,000 mi.

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Rockport Plant Selected

Ohio River Basin

6Source: US Army Corps of Engineers. “Ohio River Basin Comprehensive Reconnaissance Report.” 2009. Online at: http://www.orboutreach.com/pdfs/ORBStudy.pdf

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Rockport Plant Overview

2600 MW coal-fired power plant on the Ohio River in southern IN Advanced stage of ISO 14001 implementationPotential link to an EPRI water quality trading programLarge property size (4500 acres) including leased

farm landKnown threatened and endangered species

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AEP Rockport Lands

Source: Aerial map provided by AEP

Priority Ecosystem Services

• Freshwater – Plant depends on water availability and impacts

water quality; potential for lands to improve quality• Water timing and flows

– Potential to enhance timing and flows to downstream users; flood and drought conditions in the basin will affect the Rockport site

• Global climate regulation– Site’s forests, wetlands and soils sequester GHGs

• Crops– 52% of property is in crop cultivation

• Recreation– Site provides recreational opportunities 9

Freshwater (Quantity)

Source: Tetra Tech Inc. “Evaluating Sustainability of Projected Water Demands Under Future Climate Change Scenarios.” July, 2010. Available at: http://rd.tetratech.com/climatechange/projects/doc/Tetra_Tech_Climate_Report_2010_highres.pdf

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Freshwater (Quality)

Source: Graph adapted from information found from: ORSANCO. “Biennial Assessment of Ohio River Water Quality Conditions.” Sept. 2008. Pg. 27. Available at: http://www.orsanco.org/index.php/biennial-assessment-of-ohio-river-water-quality-conditions-305b

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Climate Regulation

Source: EPRI. AEP Rockport: Corporate Ecosystem Services Review. October, 2010. 12

Fieldprint Calculator

Crops

Source: Field to Market Fieldprint Calculator www.fieldtomarket.org

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Recreation

Source: Flickr/AEP

AEP’s Honey Creek Farm

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Risks and Opportunities

Risk Opportunity

Freshwater

• Seen as contributing to water scarcity and poor water quality

• New regulations on mixing zones and TMDLs

• New regulations on sewage and stormwater may incentivize local community to pay AEP to offset emissions

• Improve public understanding of AEP’s freshwater impacts

• Improve community relations by addressing localized water scarcity

Water Timing & Flows

• Increased flooding at site that affects farmers

• Reduce the effects of droughts and floods to downstream communities by restoring wetlands

• Improve community relations by addressing localized water scarcity

Crops • New TMDL

requirements could impact farms

• Modify agriculture leases to incentivize farmers to deliver ecosystem services other than crops

Recreation • Seen as degrading

recreation opportunities

• Create new recreational sites and recreation opportunities

Climate Regulation

• Manage lands for more GHG sequestration

• Change agricultural leases to incentivize GHG sequestration

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Strategies – Water

• Calculating and disclosing Rockport’s water footprint would improve public understanding of its water usage and uncover opportunities to improve water use.

• Water Footprint Network – emerging standard that focuses on consumption not withdrawals.

• www.waterfootprint.org• Water stress indices allow firms to understand the

supply of water relative in the region to demand for a given water body.

• A combined water footprint-stress index would provide information on plant’s incremental contribution to water scarcity in the Ohio River basin.

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Strategies - Wetlands for Water Filtration

Source: Flickr

• Use existing or construct new wetlands for tertiary treatment of wastewater

• Requires analysis of:– cost effectiveness

of alternatives, legal issues and safety issues related to recreation

– ability to clean the wastewater

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Strategies – Crop Lands

• Put marginal land into more secure protected status – Wetlands leased to one farmer could be entered into USDA’s Wetlands

Reserve Program – Farmers may be interested in implementing additional practices

independently, but have not had the security in their contacts to advance them

• Engage a farm consultancy with expertise in leasing and agricultural conservation programs– Negotiate improvements to the contracts– Longer-term leases, conservation performance incentives and cost-

sharing of investments in best management practices

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Strategies – Recreation

• Improve community relations• Possible steps:

– Determine types of recreation of most interest to the community – Develop candidate land use plans including partnerships with

local steel company, Spencer County and civic organizations for trails and other natural enhancements

– Convene tourism industry representatives to discuss Rockport site land use plans

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Corporate Strategies

• Systematize across AEP– Recast some environmental aspects as

environmental services– Expand scope beyond the industrial process– Expand risk analysis to include opportunities

• Develop internal communication strategy (e.g. briefing with AEP Real Estate staff)

• Seek opportunities for inclusion in ongoing initiatives (e.g. Global Reporting Initiative)

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Did We Achieve Project Purpose?

• Purpose: To conduct a pilot project to identify the ecosystem services that coal-fired power plants use and impact.

• Outcome: Improve operational efficiencies, reduce societal impacts of power generation and establish a better position to respond to emerging government regulations.

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