American Electric Power Co Inc's Suppliers Performance

AEP’s public utility subsidiaries procure coal and lignite under a combination of purchasing arrangements including long-term contracts, affiliate operations and spot agreements with various producers and coal trading firms. Coal consumption in 2013 was down slightly from the same period in 2012, but coal inventories ended the year at target levels on a system basis.

Despite the availability of natural gas due to the increased shale supply, the U.S. pipeline infrastructure remains a limiting factor in the expansion of natural gas-fired generation. Several of AEP’s natural gas-fired power plants are connected to at least two pipelines, however, which allows greater access to competitive supplies and improves delivery reliability. A portfolio of term, monthly, seasonal firm and daily peaking purchase and transportation agreements (that are entered into on a competitive basis and based on market prices) supplies natural gas requirements for each plant, as appropriate.

I&M has made commitments to meet the current nuclear fuel requirements of the Cook Plant. I&M has made and will make purchases of uranium in various forms in the spot, short-term and mid-term markets. I&M also continues to lease a portion of its nuclear fuel.

For purposes of the storage of high-level radioactive waste in the form of spent nuclear fuel, I&M completed modifications to its spent nuclear fuel storage pool more than 10 years ago. I&M entered into an agreement to provide for onsite dry cask storage of spent nuclear fuel to permit normal operations to continue. I&M is scheduled to conduct further dry cask loading and storage projects on an ongoing periodic basis.

AEP’s generation and marketing subsidiaries procure coal under a combination of purchasing arrangements including long-term contracts, affiliate operations and spot agreements with various producers and coal trading firms. Management believes that AEP’s generation and marketing subsidiaries will be able to secure and transport coal of adequate quality and in adequate quantities to operate their coal-fired units. Through subsidiaries, AEP owns, leases or controls more than 5,700 railcars, approximately 600 barges and 15 towboats to move and store coal for use in our generating facilities.

Most of the coal purchased by AEP is procured through term contracts. As those contracts expire, they can be replaced at the new market price with an impact in subsequent periods. Several of AEP’s natural gas-fired power plants are connected to at least two pipelines, which allows greater access to competitive supplies and improves delivery reliability. A portfolio of term, monthly, seasonal firm and daily peaking commodity and transportation agreements (that are entered into on a competitive basis and based on market prices) supplies natural gas requirements for each plant, as appropriate.

AEP’s public utility subsidiaries procure coal and lignite under a combination of purchasing arrangements including long-term contracts, affiliate operations and spot agreements with various producers and coal trading firms. Coal consumption in 2013 was down slightly from the same period in 2012, but coal inventories ended the year at target levels on a system basis.

Despite the availability of natural gas due to the increased shale supply, the U.S. pipeline infrastructure remains a limiting factor in the expansion of natural gas-fired generation. Several of AEP’s natural gas-fired power plants are connected to at least two pipelines, however, which allows greater access to competitive supplies and improves delivery reliability. A portfolio of term, monthly, seasonal firm and daily peaking purchase and transportation agreements (that are entered into on a competitive basis and based on market prices) supplies natural gas requirements for each plant, as appropriate.

I&M has made commitments to meet the current nuclear fuel requirements of the Cook Plant. I&M has made and will make purchases of uranium in various forms in the spot, short-term and mid-term markets. I&M also continues to lease a portion of its nuclear fuel.

For purposes of the storage of high-level radioactive waste in the form of spent nuclear fuel, I&M completed modifications to its spent nuclear fuel storage pool more than 10 years ago. I&M entered into an agreement to provide for onsite dry cask storage of spent nuclear fuel to permit normal operations to continue. I&M is scheduled to conduct further dry cask loading and storage projects on an ongoing periodic basis.

AEP’s generation and marketing subsidiaries procure coal under a combination of purchasing arrangements including long-term contracts, affiliate operations and spot agreements with various producers and coal trading firms. Management believes that AEP’s generation and marketing subsidiaries will be able to secure and transport coal of adequate quality and in adequate quantities to operate their coal-fired units. Through subsidiaries, AEP owns, leases or controls more than 5,700 railcars, approximately 600 barges and 15 towboats to move and store coal for use in our generating facilities.

Most of the coal purchased by AEP is procured through term contracts. As those contracts expire, they can be replaced at the new market price with an impact in subsequent periods. Several of AEP’s natural gas-fired power plants are connected to at least two pipelines, which allows greater access to competitive supplies and improves delivery reliability. A portfolio of term, monthly, seasonal firm and daily peaking commodity and transportation agreements (that are entered into on a competitive basis and based on market prices) supplies natural gas requirements for each plant, as appropriate.