End Use Energy Efficiency Corporate Governance In response to environmental issues and in connection with its assessment of AEP’s strategic plan, the Board of Directors continually reviews the risks posed by new environmental rules and requirements that could accelerate the retirement of coal- fired generation assets. The Board of Directors is informed of any new environmental regulations and proposed regulation or legislation that would significantly affect AEP. The Board’s Committee on Directors and Corporate Governance oversees AEP’s annual Corporate Accountability Report, which includes information about AEP’s environmental, social, governance and financial performance. AEP set CO 2 emission reduction goals in 2018 after considering input from corporate governance outreach effort with shareholders. In September 2019, AEP announced new intermediate and long-term CO 2  emission reduction goals, based on the output of the company’s integrated resource plans, which take into account economics, customer demand, grid reliability and resiliency, regulations and the company’s current business strategy. The intermediate goal is a 70% reduction from 2000 CO 2  emission levels from AEP generating facilities by 2030; the long-term goal is to surpass an 80% reduction of CO 2  emissions from AEP generating facilities from 2000 levels by 2050. AEP has made significant progress in reducing CO 2  emissions from its power generation fleet and expects its emissions to continue to decline. AEP’s aspirational emissions goal is zero CO 2  emissions by 2050. Technological advances, including energy storage, will determine how quickly AEP can achieve zero emissions while continuing to provide reliable, affordable power for customers. 13 AEP has reduced energy consumption and peak demand through the introduction of additional energy efficiency and demand response programs. These programs, commonly referred to as demand side management, were implemented in jurisdictions where appropriate cost recovery was available. AEP’s operating companies’ programs have reduced annual consumption by over 9 million MWhs and peak demand by approximately 2,806 MWs since 2008. AEP estimates that its operating companies spent approximately $1.5 billion during that period to achieve these levels. Energy efficiency and demand reduction programs have received regulatory support in most of the states AEP serves. Appropriate cost recovery will be essential for AEP operating companies to continue and expand these consumer offerings. Appropriate recovery of program costs, lost revenues and an opportunity to earn a reasonable return ensures that energy efficiency programs are considered equally with supply side investments. As AEP continues to transition to a cleaner, more efficient energy future, energy efficiency and demand response programs will continue to play an important role in how the company serves its customers. AEP believes its experience providing robust energy efficiency programs in several states positions the company to be a cost-effective provider of these programs as states develop their implementation plans. (a) Colorado, Hawaii, Indiana, Kansas, Michigan, Minnesota, Pennsylvania, and Texas. (b) California, Colorado, Florida, Hawaii, Iowa, Minnesota, Nebraska, New Hampshire, New Jersey, New Mexico, New York, Ohio, Rhode Island, Texas and Vermont. (c) Illinois, New Mexico and Ohio. Competitive Renewable Generation Facilities Size of Energy Resource AEP Energy Supply, LLC Division Renewable Energy Resource Location In-Service or Under Construction 1,212 MW AEP Renewables Wind Eight states (a) In-service 128 MW AEP Renewables Wind Kansas Under Construction 20 MW AEP Renewables Solar California In-service 20 MW AEP Renewables Solar Utah In-service 50 MW AEP Renewables Solar Nevada In-service 119 MW AEP OnSite Partners Solar Fifteen states (b) In-service 28 MW AEP OnSite Partners Solar Three states (c) Under Construction