American Association of Blacks in Energy May 20, 2010 Genevieve (Gen) Tuchow VP, Human Resources American Electric Power

2  How AEP is building it’s future leadership talent bench  Evolving talent planning from reactionary succession planning to more proactive talent development  Engaging leadership in identifying and developing future leadership talent  Accelerating the development of a leadership talent pool

3 Company Overview  5.2 million customers in 11 states  Industry-leading size and scale of assets:  Coal & transportation assets ◦ Control over 9,000 railcars ◦ Own/lease and operate over 2,900 barges & 80 towboats ◦ Coal handling terminal with 20 million tons of capacity  Over 21,000 employees AEP Generation Portfolio CoalGasNuclearHydroWind 68%23%6%2%1% Source: Company research

4  Purpose - Provide AEP a sustainable supply of quality leaders at all levels to meet challenges today and tomorrow  Overall … ◦ Create shared understanding and development of talent at AEP ◦ Foster the diversity of AEP’s talent pool ◦ Embed structure, support and accountability for talent development Do we have the leadership talent needed to execute AEP’s strategies today and in the future?

5 Targeted Development Current year’s considerations Leadership Talent Pool Past Performance & Leadership Potential Factors All AEP Employees Contains approximately 15% of AEP population Individuals highly regarded and believed to have the ability to be successful in a leadership position at least one level higher than current position Replacement Planning used to further develop / prepare these individuals Contains all AEP employees Performance Management Review, Individual Development Plans, etc. used to further develop these individuals Once a year a subset of the leadership talent pool selected to participate in Targeted Development Nominated by business unit leaders and confirmed by senior executives Individuals believed to have the ability to be successful in a leadership position at least two levels higher and in other business units Special assessments, mentoring, stretch assignments, etc. used to develop these individuals

6 Emerging Mid-Level Leaders Emerging Bus. Unit Leaders Emerging Senior Executives Emerging Front-line Leader Ind. Contributors Professionals Non-exempt leaders Selected FromPreparing For Superintendent First Level Manager Supervisor Superintendent First Level Manager Supervisor Director Manager Director Manager Senior VP President Vice President Senior VP President Vice President Chairman EVP, Senior VP Other EC Roles

7 Success Profile

8  Ensure ongoing quality of leadership Success Profiles (e.g., future focus, clarity, relevance, etc.)  Select a given year’s participants  Guide mentor matches  Match development opportunities across the organization to development priorities of pool members  Review the development plans of pool members for a higher level perspective  Monitor and reinforce development progress of pool members  Champion the process and talent with other organization leaders

9  Increasing supply of leaders.  Jump-started organization’s developmental focus.  Talent development as key responsibility vs. “nice to do.”  Shaping a development culture (e.g., candid career discussions, ownership of development, selection criteria, etc.).  Adapting process within operating units for those expected to rise only within their group.

10

11  "We've seen a remarkable increase in the self-awareness of [targeted development participants]."  "This has been an excellent start in our challenge to build our future leaders."  "The structure has helped."  “There is an observable difference in many of our participants.”  "We've all gotten exposure to individuals that we otherwise would not have had."

12  Key benefits include the "softer" aspects: visibility of talent, relationships among pool members, interaction with senior leaders, etc.  Executive involvement key.  Participant selection is a work in progress.  Selection of the “right” mentors and coaches essential.  It can be done.  It’s never over!