Political Engagement

AEP plays a critical role in the nation's transition to clean energy. We are diversifying our fuel resources and taking advantage of advances in technology that optimize the use of the electric power grid for all customers. In addition, AEP's transmission system – the largest in the U.S. – is essential in delivering energy to customers, including increasing amounts of low carbon and emission free energy.

AEP and its operating subsidiaries engage in lobbying and indirect advocacy activities at the federal, state and local levels of government consistent with our policy and all applicable laws. Every state has a unique set of lobbying rules defining legal and ethical standards for registered lobbyists. AEP's lobbyists receive training on these rules and are expected to follow them without exception. In all 11 of our historic footprint states and in Washington, D.C., we employ full-time registered lobbyists, and often engage external lobbying and consulting firms to support them.

Some of the trade associations to which we belong also lobby on behalf of their members. Consistent with our policy, AEP discloses the portion of its membership dues of $25,000 or greater that trade associations indicate is designated for lobbying or other political purposes. Those expenses are not tax-deductible and typically not cost recoverable, meaning they are not financed by our customers.

AEP and its operating subsidiaries are members of multiple trade associations that focus on industry-specific, technical and business issues important to our company and our stakeholders. These organizations provide forums for us to hear different perspectives on a range of issues, as well as to have our voice heard.

Trade associations are generally consensus-building groups and their actions and positions often reflect a compromise of membership. We do not always support positions taken by some of our trade organizations nor does every position they take align with our publicly-stated policy positions. In cases where our positions are not aligned, we seek to educate association members on our perspective and influence change. When that is not possible, we may oppose association positions. We are transparent about our actions with stakeholders when this occurs.

Examples of trade associations to which AEP belongs include the Edison Electric Institute, Electric Power Research Institute, Business Roundtable, American Clean Power Association, Smart Electric Power Alliance and the U.S. Chamber of Commerce.

Many of the issues the electric utility industry deals with are complicated and controversial. To effectively present our views to lawmakers on issues that can affect the future of our company, many of our employees also choose to engage in the political process through the AEP PAC. The AEP PAC actually is a collection of a federal PAC and several smaller, state-specific PACs as allowed by state law. They collect voluntary contributions from eligible AEP employees to support political candidates. The PACs are dedicated to supporting candidates for public office who understand and work toward solutions for issues important to AEP and the energy industry.

The PACs that operate in our states are governed by state Leadership Committees that work with the operating company governmental affairs managers to decide who shall receive contributions from the PAC. Each state has one or more Leadership Committees that conduct recruiting drives, organize local PAC member events and review each state's contributions budget, as permitted by law.

The criteria for candidate support are:

• Candidates who represent and support AEP's business interests and can help AEP achieve its vision
• Candidates whose districts are located near our business operations
• Candidates' policy positions and voting records on business issues relevant to our company
• Candidates' membership on relevant policy committees
• Candidates' positions of leadership

At the federal level, the AEP Committee for Responsible Government (also an employee-governed PAC) makes contributions to federal, state and some local candidates. The PAC may also contribute to political parties or other PACs from time to time.

The AEP PACs comply with all reporting requirements governing political action committee contributions. Employees are prohibited from seeking and receiving reimbursement for any personal or PAC contribution they make.

Corporate political contributions are made to support public policies and candidates to further AEP's business interests. Our positions on key issues affecting AEP are disclosed in our Corporate Sustainability Report, which is published annually and available online, along with an archive of previous years' reports.

AEP makes corporate political contributions as permitted by law. We define political contributions as a contribution of corporate funds or in-kind contributions of goods or services by AEP to any political entity, as defined by our policy. We do not make contributions based on personal interests or in exchange for any official act (see AEP's Anti–Corruption Policy).

AEP complies with all federal, state and local laws, including reporting requirements that govern corporate political contributions.

All requests for corporate political contributions must be reviewed and approved by AEP's Chief Compliance Officer - Political Engagement in advance to ensure compliance with all laws, rules, regulations and our policy. In addition, all requests for corporate political contributions must be reviewed and approved by executive management in advance to ensure compliance with AEP's policy and budgetary objectives.

AEP's Committee on Corporate Directors and Governance oversees political activity and receives a report on political engagement activities semi-annually.