Strings Attached: How utilities use charitable giving to influence politics and increase investor profits
American Electric Power
American Electric Power (AEP) is one of the nation’s largest investor-owned utilities, with 5 million customers in eleven states, including Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia.
Basic Facts:
- EPI estimate of AEP’s total charitable giving in most recent 5 years (2013-2017): $116,102,421. (1)
- Name of Foundation: American Electric Power Foundation
- American Electric Power Foundation Giving (2013-2017): $46,372,387
- 2017: $12,719,479
- 2016: $7,445,412
- 2015: $8,504,012
- 2014: $8,705,491
- 2013: $8,997,993
- Corporate Charitable Giving (2013-2017)
- Sum of total corporate and foundation giving in most recent 5 years, according to AEP’s annual corporate accountability reports: $97,603,012
- Sum of total donations in most recent 5 years, according to FERC Form 1 and Form 60 filings: $116,102,421. (2)
- 2017: $5,501,233
- 2016: $69,268,168
- 2015: $7,854,038
- 2014: $20,075,460
- 2013: $13,403,522
- American Electric Power Foundation Executive Director:
- Teresa McWain. Also serves as Director of Corporate Communication for AEP.
- Applicants for funding are instructed to contact representatives of their local AEP operating companies, most of whom work for the utility on community affairs, communications, or external affairs.
- American Electric Power Foundation Board of Directors:
- Nicholas K. Akins, Chief Executive Officer of AEP and Chairman of the Foundation
- Dale E. Heydlauff, Senior Vice President of Corporate Communications for AEP and President of the Foundation
- Brian Tierney, Executive Vice President and CFO of AEP and Vice President of the Foundation
- Charles Patton, Executive Vice President of External Affairs for AEP
- Paul Chodak, Executive Vice President of Generation for AEP
Examples of AEP using charitable giving to manipulate policy:
2014 AEP Ohio Electric Security Plan and Power Purchase Agreement
“‘Bribe’ means offering (or accepting) anything of value for the purpose of influencing a business decision or securing any kind of improper advantage. A bribe is not just a suitcase of cash. Bribes may include… Charitable or political contributions.” – AEP’s Principles of Business Conduct.
Charitable contributions from AEP Ohio come with some strings attached.
“AEP Ohio contributions are awarded with the understanding that AEP Ohio, at any time, can make public its financial investment in your organization as we look to strengthen community-based relationships in our service territory,” according to AEP Ohio’s Contributions Application.
Beyond the public relations benefits that AEP seeks to derive from its charitable giving, some charitable organizations that have received contributions from AEP Ohio have supported the utility in regulatory cases before the Public Utilities Commission of Ohio (PUCO).
In 2014, two non-profit organizations that received financial support from AEP provided public testimony to the PUCO praising the utility as it sought approval for proposals that included consumer bailouts for coal-fired power plants.
Representatives of the United Way of Central Ohio (UWCO) and the YWCA Columbus, both tax-exempt 501(c)(3) organizations, lauded AEP as an “excellent corporate citizen” and a “community leader” during a public hearing on AEP Ohio’s Electric Security Plan. At the time, Nicholas Akins, the CEO of AEP, was involved in leading fundraising campaigns for both organizations, as was noted in their testimony.
Table 1: AEP Foundation Contributions to United Way of Central Ohio and YWCA Columbus
| 2017 | 2016 | 2015 | 2014 | 2013 | Total | |
| United Way of Central Ohio | $200,000 | $100,000 | $100,000 | $100,000 | $300,000 | $800,000 |
| YWCA Columbus | $100,000 | $100,000 | $100,000 | $400,000 | $325,000 | $1,025,000 |
Dawn Tyler Lee testified on behalf of UWCO at a public hearing before the PUCO. Tyler Lee described how AEP supported her organization’s work to “help people who are struggling to meet their basic needs, like housing and access to critical healthcare.” Her testimony did not address the concerns of consumers who under AEP’s plan would be forced to pay over $115 million to bail out the Ohio Valley Electric Corporation, which operates the coal-fired Clifty Creek and Kyger Creek power plants, according to estimates from the Ohio Consumers’ Council. AEP is OVEC’s largest shareholder.
At the start of her testimony, Tyler Lee said she spoke on behalf of the UWCO’s president and CEO Janet Jackson, and thanked the commission for the opportunity “… to share some of the ways AEP has been an excellent corporate citizen and steadfast supporter of the work of the United Way of Central Ohio.”
“Each year AEP conducts a strong United Way campaign.” she said. “Through those campaigns, AEP employees have invested almost $19 million over the past ten years.”
Tyler also said that AEP’s CEO Nick Akins and his wife Donna served as co-chairs for the UWCO’s 2014 fundraising campaign. The couple were later listed as trustees on UWCO’s Form 990 report for 2014.
The Akins were not the only AEP executives involved in the UWCO.
“Pablo Vegas, president and COO of AEP Ohio, serves on our Board of Trustees,” Tyler Lee continued. “Past AEP campaign chairs include: Former chairman, president and CEO, Mike Morris, and former vice chairman, Carl English.”
Tyler Lee went on to list several other AEP employees involved in her organization, including “AEP manager of community affairs, Renee Shumate, who is with us today…,” as she said at the public hearing.
Next, the commission heard similar testimony from Elfi Di Bella, the president and CEO of YWCA Columbus, an organization dedicated to eliminating racism and empowering women that provides shelter and other services to women and children.
“Recently AEP pledged $1 million to the YWCA campaign,” Di Bella said.
“… Nick and Donna Akins of AEP have stepped up as co-chairs of the campaign, along with Renee and Alex Shumate, once again representing community leaders, but also AEP’s support, of course, ensuring our success during this process,” she also said.
Schumate was listed as the secretary of YWCA Columbus on the group’s 2014 Form 990 report.
Di Bella said the money raised would be used for HVAC improvements at the YWCA’s Griswold Building, and to support the services the organization provides to the community. She also said AEP’s energy efficiency programs would be useful for the newly renovated building.
“As a community leader, I urge you to be as supportive of AEP as they are a vital part of our community and as supportive as they are to our community at large,” she said as she concluded her remarks.
2014-15 AEP Ohio Power Purchase Agreement
Also before the PUCO in 2014 was a Power Purchase Agreement (PPA) proposed by AEP Ohio, which included bailouts for coal plants that the Ohio Consumers’ Counsel estimated would cost consumers as much as $1.8 billion.
Columbus Business First reported on how AEP provided form letters for local governments and business associations to use to voice their support for its proposal.
“The groups then send the letters – usually identical except for a change of letterhead and other minor personalizations – to the Public Utilities Commission of Ohio,” according to the article.
A later review of the associated docket by the Energy and Policy Institute identified form letters submitted in support of the PPA by nonprofit 501(c)(3) and 501(c)(6) economic development organizations with financial or other ties to AEP.
“It is not a bailout as others would suggest, but a plan that protects Ohio’s economy and shields AEP Ohio’s customers from market volatility,” one line in the form letters said.
One such letter was signed by Dean Monske, president and CEO of the Regional Growth Partnership (RGP), a 501(c)(6) organization. A list of “investors” found on an archived 2014 page of the RGP’s website included AEP. Tim Wells, an economic and business development manager at AEP Ohio, also served on the RGP’s board of directors, according to the group’s annual Form 990 report to the IRS for 2014.
Another letter was signed by Steve Waers, president of the Area Development Foundation of Knox County. AEP was included in a list of 2014 members and “investors” found on the group’s website. Paul Prater, an external affairs manager for AEP Ohio, served on its board of directors.
Dave Wheeler, a director of external affairs for AEP Ohio, served on the board of the Holmes County Economic Development Council, a 501(c)(3) organization that also signed one of the form letters. Wheeler was also involved with the Tuscarawas County Improvement Corporation, a 501(c)(6) organization that submitted a brief comment supporting the PPA.
Tracy Drake and Dale Hileman, the president and executive director of the Eastern Ohio Development Alliance, a 501(c)(3) nonprofit organization, submitted comments to the PUCO in support of AEP Ohio’s PPA. The comments were worded differently than the form letters submitted by the Regional Growth Partnership and Area Development Foundation of Knox County.
In the group’s 2014 Annual Report, Drake paid “special tribute to EODA’s Major Sponsors,” including AEP. A list of “major contributors” found on the membership page of the group’s website that year also included several members of AEP Ohio’s external affairs team.
Footnotes
(1) Estimate is based on total donations reported by AEP subsidiaries on annual reports to the Federal Energy Regulatory Commission for 2013-2017. See section 7.b. for details.
(2) Based on total “Donations” reported on FERC Form 1 or Form 60 reports filed by the following AEP subsidiaries, which are listed with their total donations for 2013-2017: Ohio Power ($38,665,472); AEP Appalachian Transmission Company ($1,749); AEP Generating Company ($822,194); AEP Generation Resources ($133,571); AEP Indiana Michigan Transmission ($1,036,573); AEP Kentucky Transmission Company ($67,388); AEP Ohio Transmission Company, Inc. ($2,021,009); AEP Oklahoma Transmission Company, Inc. ($648,113); AEP Southwestern Transmission Company, Inc. ($493); AEP Texas North ($1,897,322); AEP Texas Central ($7,396,083); AEP Texas ($552,067); AEP West Virginia Transmission Company, Inc. ($598,271); Appalachian Power Company ($19,716,830); Indiana Michigan Power Company ($16,304,574); Kentucky Power Company ($5,719,118); Kingsport Power Company ($292,224); Public Service Company of Oklahoma ($6,975,944); SWEPCO ($10,242,716); Wheeling Power Company ($319,050); AEP Service Company ($2,707,480)
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