Economic and Business Development
Developing and investing in the local communities in which we operate and provide service has become increasingly important to us and our communities. A slower-than-expected economic recovery, recent and anticipated coal unit retirements and an increase in shale gas production have caused us to rethink how we do business.
In 2011, AEP formed an Economic and Business Development (E&BD) group to work with local communities to attract and retain businesses. This group works strategically with businesses, communities and state and local officials through our operating companies to identify potential sites for business relocation and expansion.
The E&BD team provides comprehensive assistance such as property searches and screening; custom research on demographics, work force, incentives and geographic information system (GIS) mapping; electric service plan and rate design; site visits; design, build and maintenance services for electrical facilities; and introductions to state, regional and local government officials and business leaders.
In 2012, AEP was named one of the top 10 utilities in economic development by Site Selection, a magazine covering corporate real estate strategy and economic development. The recipients were chosen based on an analysis of corporate end-user activity in 2011 in the company's territory. This includes website tools and data; input from site location decision-makers; innovative programs and incentives for business, including energy efficiency and renewable energy programs; and the utility's own job-creation infrastructure and facility investment trends. The magazine cited AEP for our site selection services through our seven operating companies, and energy efficiency programs for commercial and industrial customers.
AEP has targeted several industries for growth and development opportunities within its service territory. Qualified data center locations are one area that appears to have the greatest potential for growth. It is estimated that, by 2015, there will be a 50 percent shortage of data storage availability. AEP’s 11-state territory provides attractive opportunities such as access to bandwidth and fiber optics and reduced risk of natural disasters and other hazards, which are critical when siting data centers. AEP is currently qualifying locations to become data center-certified. The qualification process includes an assessment of market conditions that could lead to potential data center locations, selection of potential data center sites, and a detailed analysis and site certification process that involves a review of factors that are most critical to the operation of data centers.
Our plan to close some of our coal-fired units will adversely affect local economies. Power plants often provide the highest-paying jobs where they are located and are a source of vital tax dollars that help pay for schools, roads and other community needs. The plants also support local businesses. The loss of jobs, taxes and local employee income related to plant retirements is going to hurt these communities.
In an effort to lessen the impact of coal plant retirements on local communities, the E&BD team is pursuing a two-pronged approach. First, we are advocating for the provision of federal resources to assist our communities in retooling their economies to support job-creating investment once the plants close. Second, we are exploring effective ways to reuse retired coal plants or plant sites, including the existing infrastructure, for other industrial uses. AEP plants are located on industrial sites that are already permitted and have a variety of infrastructure in place as well as a world-class manufacturing work force. These sites can serve as ideal locations for manufacturers. We are actively seeking business opportunities that will be able to use these assets while providing economic stability locally.