Re: 10 CFR Part 300 General Guidelines for Voluntary Greenhouse Gas
Reporting: Proposed Rule, 68 Feb. Reg. 68204 (December 5, 2003)

American Electric Power respectfully submits the following comments in
response to the request for comments from the Department of Energy
(DOE). American Electric Power owns and operates more than 42,000
megawatts of generating capacity in the United States and select
international markets and is the largest electricity generator in the
U.S. AEP is also one of the largest electric utilities in the United
States, with almost 5 million customers linked to AEP's 11-state
electricity transmission and distribution grid.

AEP voluntarily participates in the U.S. Department of Energy\'s Climate
Challenge program focused on CO2. Between 1991 and 2002, 23.2 million
tons of carbon dioxide have been avoided or sequestered by AEP under
this program. AEP aggressively planted 21.8 million trees in 5 years
(bringing AEP\'s total to 62 million trees planted since the 1940s),
improving generating and energy delivery efficiency, using more nuclear
generation, and implementing energy conservation programs at AEP
facilities and for customers. For example, AEP was recognized by the
U.S. Environmental Protection Agency with its Green Lights Utility Ally
of the Year Award for upgrading lighting in 6.5 million square feet of
company facilities and reducing energy use by over 23 million kilowatt
hours.

In addition to DOE's Climate Challenge program, AEP is a participant in
The Business Roundtables' Climate Resolve initiative, U.S. EPA\'s SF6
Emissions Reduction Partnership for Electric Power Systems, EPA's
Climate Leaders partnership (we have taken on a reduction goal under
that program), and a number of other voluntary climate related
initiatives.

Finally, AEP is a founding member of the Chicago Climate Exchange (CCX),
a voluntary greenhouse gas trading program under which the company has
agreed to cap its carbon dioxide emissions at the average of 1998-2001
levels and reduce or offset them by a cumulative 10 percent over the
period 2003-2006.

**Comments on the General Guidelines:**

-   **Technical Guidelines Important To Commenting On General
    Guidelines**

> Many of the general guideline provisions are difficult to comment on
> without the Technical Guidelines to provide the reporting details.
> Reductions in emission intensity, Absolute reduction in emissions,
> Increased carbon storage, Avoided emissions, Project emission
> reductions, Registration of Emission Reductions, etc. all could, or
> could not, become issues in the General Guidelines depending on their
> treatment in the Technical Guidelines. We therefore recommend that we
> are provided the opportunity to comment on the entire proposed program
> once the Technical Guidelines and EIA reporting elements to be
> contained in the reporting forms are issued.

-   **Failure Of Addressing The President's Call For Providing Credit
    For Past Actions**

> As pointed out above, AEP has reported 23.2 million tons of carbon
> dioxide as being avoided or sequestered since 1991. These reductions
> were undertaken in good faith with the belief that AEP's actions would
> be credited under a future program. Instead, AEP will be penalized if
> for taking early action should these reductions not be credited.
>
> When the White House initiated this effort to revise the voluntary
> guidelines, it noted that in 1999, 207 companies and other
> organizations reported on more than 1,700 projects "that achieved 226
> million metric tons of carbon dioxide equivalent reductions -- equal
> to 3.4 percent of national emissions" to the global atmosphere. The
> July 8, 2002, four-Agency letter to the President recommended that DOE
> "\[d\]evelop a process for evaluating the extent to which past
> reductions may qualify for credits." However, the proposed revision
> conveys a rather different message, namely, that all of the efforts to
> date by reporting entities will not be "registered" or receive credit.
>
> AEP does not understand the basis for DOE interpreting section 1605(b)
> as permitting it to choose an arbitrary year of 2002 and declaring
> that only reductions reported after that year may be included in the
> EIA data base and "registered" or recognized, while reductions
> properly reported under the current and legally effective guidelines
> and the statute between 1994 and 2002 may not be so included and
> "registered" or recognized, even if "recast to fully comply with the
> revised Guidelines." There has been no change in the statute and, as
> discussed above, there apparently is no change in the EIA database.

-   **Minimum Reporting Threshold Too Restrictive**

> The threshold for exclusion from having to report all sources for all
> GHGs as well as terrestrial sinks is too restrictive. We recommend
> that the purposed threshold of "... total emissions excluded did not
> exceed 3% of its total emission inventory or 10,000 tons of CO2
> equivalent, whichever was smaller" be changed to "... total emissions
> excluded did not exceed **5%** of its total emission inventory or
> **10,000 ton** of CO2 equivalent, whichever was **larger**". Our
> experience with developing our baseline for the CCX is that the effort
> to quantify and document small sources is far too large for the
> benefit of reporting them, particularly for the electric power
> generation industry. Any shifting of production to these small sources
> (an argument often used for including small sources) from reporting
> sources would quickly exceed the threshold and bring them into the
> inventory.

-   **Project Based Reporting Important**

By not allowing "registration" or recognition of credible reductions
from projects alone, the proposed revisions to the guidelines have
missed yet another opportunity to provide incentives to take action.
Under the December 5 proposal, the only way an entity can "register" is
if it undertakes actions that, taken collectively, result in the overall
reduction of the emission intensity of the entire entity. This creates a
disincentive to undertake projects that individually or collectively do
not create an emission intensity path for the entire entity that is
consistently below the baseline level. However, such projects can still
lead to significant reductions that would make real, valuable
contributions to the President's goal. Allowing "registration" or
recognition of reductions from projects would create an incentive to
undertake such projects and make a contribution. Further, DOE's approach
to entity-wide reporting is inconsistent with the realities of trading
GHG emission reductions, which are focused on project-based reductions,
avoidances, and sequestrations, not entity-wide reductions.

When combined with the lack of any definition of the "special
recognition" or other benefits of "registration," all of these barriers
ultimately create disincentives and represent missed opportunities to
encourage action that would contribute to achieving the President's goal
while still enhancing credibility.

-   **Need For Recognition Of International Projects**

> AEP has been a leader in undertaking international projects for
> climate change. We are a founding partner in the creation of the
> largest forestry sequestration project in the world -- the Noel Kempff
> Mercado Climate Action Project in Bolivia - and also support similar
> projects in Brazil and Belize. We are also undertaking renewable
> energy and energy efficiency projects in developing countries. AEP
> believes that if the final revised guidelines retreat from the current
> guidelines in which international and domestic projects have continued
> to enjoy equal status, it would be a severe and unjustified blow to
> reporting on, and participating in, voluntary programs.
>
> We understand that the primary focus of the President's climate plan
> is on the reduction of U.S. GHG intensity. However, GHGs know no
> geographical boundary, and thus reducing, avoiding or sequestering
> GHGs overseas is effectively the same as doing so in the U.S. Often
> the reductions can be made in a more cost-effective manner. Also note
> that international projects are consistent with sustainable
> development programs that the U.S. is undertaking in the wake of the
> World Summit on Sustainable Development (2002) and the Delhi
> Declaration on Climate Change and Sustainable Development.

-   **Need To Provide Single Registry**

> At the January 12^th^ Public Workshop, DOE expressed it's desire to be
> the sole reporting database for GHG inventories in the US. We would
> strongly endorse this desire to keep the administration of this, and
> other reporting programs, to a minimum. By designing the reporting
> structure to be flexible enough to include elements of other reporting
> programs (Climate Leaders, CCX), DOE would certainly improve the
> number of reporting entities as well as reducing the administrative
> burden on participants.

-   **CEO Or** **Environmental Compliance Officer Certification
    Excessive**

AEP feels we should be given the flexibility under this voluntary
program to have our report signed by a "responsible corporate official"
as is the case with other environmental laws that are mandatory.

-   **Flexible Interface To DOE's Database**

More and more corporations are developing their own internal
Environmental Management Information Systems where data on GHG emissions
would be stored and maintained. In designing the interface for DOE's GHG
inventory database, we would encourage DOE to provide flexibility moving
our inventory report data in and out of the official database. Using an
XML data transfer protocol and developing an interface with external
submission in mind would help many companies minimize their
administrative burden.

AEP appreciates the opportunity to submit these comments and plans on
participating in further discussion with DOE and EIA on these important
Climate Challenge guidelines.

Sincerely,

Diane M. Fitzgerald

Vice President -- Environmental & Government Affairs

Gregory W. McCall

Senior Engineer -- Environmental Services

American Electric Power

1605bgeneralguidelines.comments@hq.doe.gov