Corporate Ecosystem Services Review at AEP s Rockport Plant. Diane Fitzgerald Managing Director - Environmental Affairs AEP

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1 Corporate Ecosystem Services Review at AEP s Rockport Plant Diane Fitzgerald Managing Director - Environmental Affairs AEP

2 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

3 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 3

4 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. 4

5 Rockport Plant Selected 5

6 Ohio River Basin Source: US Army Corps of Engineers. Ohio River Basin Comprehensive Reconnaissance Report Online at: 6

7 Rockport Plant Overview 2600 MW coal-fired power plant on the Ohio River in southern IN Advanced stage of ISO implementation Potential link to an EPRI water quality trading program Large property size (4500 acres) including leased farm land Known threatened and endangered species 7

8 AEP Rockport Lands Source: Aerial map provided by AEP 8

9 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

10 Freshwater (Quantity) Source: Tetra Tech Inc. Evaluating Sustainability of Projected Water Demands Under Future Climate Change Scenarios. July, Available at: 10

11 Freshwater (Quality) Source: Graph adapted from information found from: ORSANCO. Biennial Assessment of Ohio River Water Quality Conditions. Sept Pg. 27. Available at: 11

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

13 Crops Fieldprint Calculator Source: Field to Market Fieldprint Calculator 13

14 Recreation AEP s Honey Creek Farm Source: Flickr/AEP 14

15 Risks and Opportunities Freshwater Water Timing & Flows Risk Seen as contributing to water scarcity and poor water quality New regulations on mixing zones and TMDLs Increased flooding at site that affects farmers Opportunity 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 Reduce the effects of droughts and floods to downstream communities by restoring wetlands Improve community relations by addressing localized water scarcity Crops Recreation Climate Regulation New TMDL requirements could impact farms Seen as degrading recreation opportunities Modify agriculture leases to incentivize farmers to deliver ecosystem services other than crops Create new recreational sites and recreation opportunities Manage lands for more GHG sequestration Change agricultural leases to incentivize 15 GHG sequestration

16 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. 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. 16

17 Strategies - Wetlands for Water Filtration 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 Source: Flickr 17

18 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 costsharing of investments in best management practices 18

19 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 19

20 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) 20

21 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. 21