AEP's "Principles of Business Conduct - The Power of Integrity" can be found here. However, if Morris would remain uncorrected while misinforming analysts about the state of AEP's affairs, does that mean that these principles are mere window-dressing? Or do they simply fail to apply at a certain level of AEP's hierarchy? Is Morris setting the right example?
Let's take a look at some of AEP's principles and see how they have been applied to the PATH Project over the years.
Page 1 contains a Message from Mike Morris:
"Every day we demonstrate our commitment to excellence by the way we live and work according to our shared beliefs about the way we will treat each other, our customers, and the communities we serve."
I don't know how they treat each other, but the way they have treated their potential customers and the communities they intended to serve with the PATH project has been abysmal. The PATH Project has been one huge lie ever since its inception. PATH is not needed (finally admitted by PJM), and relied heavily upon a dishonest PR spin campaign and influence buying to facilitate necessary approvals. I have never encountered an affected "customer" in PATH's "community" who didn't feel that they were being lied to and bullied by PATH and its land agents over the past several years. PATH has also been hugely expensive to the ratepayers collectively financing it, and personally expensive to the citizen opponents who have expended a great deal of time, effort and money over the past three years in order to defend themselves and have a voice in the approval process.
More from Mikey:
"Ethical conduct means doing the right thing at the right time, every time. It means applying our core values in all our business decisions. It means adhering to the laws, regulations, and policies related to the performance of our jobs. And, it means demonstrating our leadership, integrity, and compassion as a valued corporate citizen of every community we serve. We all share responsibility for maintaining the power of AEP’s integrity."
Did AEP "do the right thing at the right time" when their greed got the better of them during The Transmission Project Development Renaissance -- Siting Investment Post EPACT 2006? (Page 3 - Look! There's our pals Haney, Poff and Herling!) No, they didn't. Their I-765 project was just too much, too late, to slip past a public that was well-prepared to deal with it, unlike the TrAIL project that Allegheny Energy and Dominion managed to slide through approvals with bribery and illegal backdoor political deals. We were ready for you this time! AEP's wrong decision at the wrong time has already cost PJM's ratepayers over $100,000,000, plus 14.3% interest yearly.
Did AEP demonstrate integrity and compassion in our community when their land agents tried to get landowners to sign option agreements without the advice of a lawyer? This begs the question: Would Mikey and his henchmen sign a property purchase agreement or option on their own real estate without the advice of a lawyer? I doubt it. I don't think Mikey is allowed to fart without the prior advice of AEP's legal staff.
Now let's get to the Principles:
Our mission, simply stated, is bringing comfort to our customers, supporting business and commerce, and building strong communities.
Was having PATH hanging over your head for the past 3 years comforting to any of you citizens? I will say that PATH strengthened our communities though -- it brought us all together against a common enemy like no issue in recent memory. The PATH opposition came from diverse backgrounds and varied political persuasions, but yet we were all able to work together effectively to stop PATH.
Justice & Fairness
Doing the right thing at the right time, every time.
Cultivating a reputation of honesty and straightforward
Accepting accountability for your actions and living up to high ethical expectations.
Developing a sense of community among all those you encounter.
Treating others the way we want to be treated, regardless of position, and valuing each person’s talents, perspectives, and experience.
Maintaining a sincere desire to make the world a better place.
We've already covered that "right thing, right time" thing, so let's skip to AEP's trustworthiness. After nearly 3 years of being lied to, who trusts AEP? Anyone? AEP's reputation is one of a dishonest, greedy, uncaring corporation, and they fully earned it.
Accountability - now is the time for AEP to admit that their PATH project is never going to happen. They made a mistake with the project, now they need to pull the plug and quit trying to "suspend" their project and hoping that PJM can come up with another excuse to build it.
Citizenship - AEP is an outsider in our community, and always will be. We realize a corporation is not a person (no matter what the courts told corporations) and has no guilt, compassion or any emotions of any kind. A corporation makes money, not warm fuzzies. A corporation doesn't "care" about anything except profits.
Respect - Is that what Archie "Creepyfreak" Pugh was practicing when he spent multiple hearings, in the words of Patience, "staring at us like a stinkbug on his shoe?" Further, when has PATH ever "respected" any of us? Examples demonstrate that AEP was never respectful of the opposition: Castigating, demeaning legal filings; making jokes to each other about "the people around here" at a Tucker County public meeting; dismissing all our concerns as insignificant "NIMBY" issues, both directly by PATH personnel and through PATH's use of third party front groups to discredit opposition to their project.
Caring - see Citizenship above. Also, ask yourself this: Does a gigantic substation in the middle of 1350 homes and the destruction of thousands of acres of forest, farmland and suburban homes, for no other reason than to provide corporate profit, make the world a better place?"
Relationships With Customers
A key to AEP’s business success lies in our ability to please our customers by meeting their needs in ways that improve their quality of life. This includes delivering safe, efficient, and reliable services of consistently high value and promoting our products truthfully. If we please our customers, we will please our regulators, our financial results will reward shareholders, and our employees can reap significant rewards. AEP depends on long-term, continuing relationships with satisfied customers. Cultivating a reputation of honesty and straightforward communication is fundamental to this long-range approach.
PATH does not meet our needs; it meets AEP's need to make money. PATH does not please us. I think we have made that abundantly clear to AEP over the years. Living with the stress of the possibility of losing our homes, our investments, our health and that of our children, for nearly three years did not improve our quality of life. It caused sleepless nights, gray hair and denied us any form of true relaxation... for year upon year.
PATH is AEP's "product." They did not promote it truthfully. They promoted it by attempting to intimidate us, and through a PR spin and propaganda campaign that they made us reimburse them for. We are not pleased with AEP. AEP's "regulators" aren't too happy with them either because PATH wasted a huge amount of their time and resources on a project that was never needed. AEP's reputation is one of dishonesty and evasiveness. Our "relationship" with AEP has gone on much too long already. Go away, AEP, and let us get on with our lives!
Each employee and officer should deal fairly with our customers, suppliers, competitors, and employees. No employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice.
Wow! PATH's land agents coerced land owners into signing legal agreements without the advice of an attorney, manipulated them to get those options signed, and misrepresented material facts about need, safety and the effect of their project on our communities and finances. Nothing was fair about waking up one morning and finding your whole life turned upside down because a corporation had decided to drop a high voltage power line in your backyard. We paid all PATH's legal costs, and then we had to pay our own legal costs as well, or we wouldn't have been fairly represented in the legal process -- nothing fair about that either.
In general, the antitrust laws prohibit:
• Joint action, by means of conspiracies, agreements and other understandings between two or more competitors regarding prices, customers, territories, and other policies or conduct that unreasonably restrain competition.
• Unilateral action that is exclusionary and tends to create or maintain monopoly power in the marketplace for some particular product or service.
• Discrimination in the prices to buyers of similar goods, who are similarly situated, during the same market conditions, subject to several complex defenses and conditions.
How about AEP & Allegheny Energy entering into a shell company "partnership" to construct a completely unnecessary transmission line in order to ship the electricity they produce to customers hundreds of miles away who will pay more for it? On top of that, there are millions of ratepayers who derive no benefit from PATH that will be paying for it for years. And then there's the matter of those PATH alternatives that were proposed by others and rejected, with bias, by PJM. Did AEP have a hand in that?
• False or misleading advertising that either disparages a competing product or service, or conveys materially misleading information about our own product or service.
Remember this one? "Our nation's power grid system is at risk. Five years ago, the blackout in the northeast was a warning." The northeast blackout was caused by human error on the part of FirstEnergy and lack of transmission line maintenance that caused a line to sag into a tree that shouldn't have been there. That has nothing to do with building additional transmission lines.
Or how about this one? "The new PATH transmission line is not just a bright idea for our region but for communities and neighborhoods along the way. From West Virginia to Virginia and Maryland...it's one PATH but it leads everywhere... bringing safe, reliable power to our communities... making sure industry has a dependable source of energy to count on... and giving our local schools, hospitals and offices the energy it takes to stay up and running. Best of all, the PATH transmission line will be there to ensure dependable energy for the future. Not only reinforcing our power grid... but ready and able to support new energy sources, including renewables." PATH was a transmission line. It was not part of the distribution system and did not bring power to the communities along the way. It was a highway plowing through our communities on its way to the east coast, with no local exit or entrance ramps for our use. PATH originated at AEP's John Amos coal-fired power plant and was designed to carry coal-by-wire, not renewables.
And then there were the ads that started out, "Despite what you may have heard.." that intended to disparage the opposition's message.
I would consider all of these examples to be misleading, and there are hundreds of others. PATH bombarded the public with misleading advertising, and recovered the cost of this misleading advertising from the same public.
AEP is committed to nurturing strong and productive relationships with our public officials and regulators. Employees must conduct Company business before public officials and regulators openly and honestly, exercising the utmost integrity at all times. When in doubt on any ethical question, always choose the highest standard.
The Company recognizes that major corporate issues can be at stake in the political arena and maintains a public policy program to advocate the Company’s positions on these issues. Such advocacy often involves
communication with elected officials. However, the Company will exert no pressure, direct or indirect, to influence decisions of employees who serve in public positions.
The PATH Companies engaged in a federal, state and local lobbying effort that was intended to unfairly influence approvals for their project. PATH also recovered a portion of this lobbying expense from the ratepayers, in violation of FERC rules. When asked to produce documents in discovery related to their lobbying campaign, PATH refused to be open and honest and had to be ordered by the WV-PSC to produce detail of their lobbying account. There are still many unanswered questions about PATH's lobbying efforts. Does AEP want to answer them now, in their spirit of openness and honesty? I doubt it.
The Company’s records, books, and documents must accurately reflect all transactions and provide a full account of the organization’s assets, liabilities, revenues, and expenses in order to accomplish the above and to comply with related laws and generally accepted accounting principles.
Two words: Formal Challenge
Security of Property and Confidential Information
All employees must protect the Company’s and third parties’ confidential information and prevent the information from being improperly disclosed to others inside or outside the Company.
The PATH Companies made some serious mistakes in this vein during discovery on the 2010 Annual Update. AEP staff and PATH's counsel released this. I'm only displaying the cover page of the document as an example, and not the confidential document it was attached to. PATH counsel then turned around and asked me to sign a protective agreement for this very same confidential document, after it had already been released to another party without benefit of an agreement! PATH counsel also released the personal information of a third party, one of their contractors. We didn't ask for, or want, the confidential information we received. I'm not going to go into any more detail on this. Randy knows what he did.
AEP’s aim is to please the customer by meeting their needs in ways that improve their quality of life. That means giving one kind of service to everyone … the best possible.
Living in close proximity to a 765kV high voltage transmission line does not improve our quality of life. It detracts from the quality of our lives, and puts our actual lives in jeopardy from constant exposure to EMF. In addition, AEP's plan for approval and construction of PATH wasn't the best possible. There are a multitude of other ways to attempt to accomplish the same goals that don't rely on dishonesty, intimidation, and influence buying. We hope we have taught AEP some things about their processes along the way.
Realize organizational integrity – walk our business ethics talk.
Mike Morris certainly didn't walk the talk when he misled financial analysts during an earnings call. AEP's CFO and Treasurer didn't walk the talk when they let the misinformation go uncorrected. My conclusion is that AEP doesn't walk their talk, which renders their Principles of Business Conduct nothing but worthless talk.
Put simply, our reputation is earned by our conduct. Unfortunately, the actions of one individual can damage the reputation of all. Since perception is often
reality for our customers and other stakeholders, we must take care to guard our reputation by acting with integrity in everything we do.
Well said, AEP. Your corporate reputation has been sullied by your lack of integrity regarding the PATH project, and the disgraceful way you treated affected citizens during the process. Because of the immortality of the Internet and our success in this David vs. Goliath battle, AEP's reputation of dishonesty will be a weakness that haunts them for a long, long time. The PATH opposition has created a new paradigm in successfully fighting greedy corporate initiatives that will be referenced by those who come after us time and time again. Those who don't learn from history are doomed to repeat it.