AEP Corporate Sustainability Report outlines challenges, performace on key issues

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COLUMBUS, Ohio, April 23, 2008 – American Electric Power (NYSE: AEP) has released its second Corporate Sustainability Report, addressing issues that affect its ongoing sustainability, including climate change; environmental performance; public policy; energy security, reliability and growth; work force issues; stakeholder engagement and leadership, management and strategy.

As part of the company’s focus on sustainability, AEP management met with more than 100 stakeholders during the last year to receive input about the company and its business practices. Stakeholders participating included state and federal regulators, power plant neighbors, environmental and conservation advocates, customers, employees, investors, community leaders and representatives from academia.

“Sustainability is a process of continuous improvement, and we have committed to be candid and transparent about our business. Over the last year, we met with groups representing all of our stakeholders to discuss sustainability and how we do business. These thoughtful discussions gave us a greater understanding of how we are perceived and what is expected of us, much of which is reflected in this report,” said Michael G. Morris, AEP chairman, president and chief executive officer.

AEP’s Sustainability Report provides an overview of how many key issues affect the company’s long-term sustainability and how the company plans to address them. The report was prepared according to G3 Reporting Principles established by the Global Reporting Initiative, a voluntary reporting framework used by organizations around the world as the basis for sustainability reporting.

The report details AEP’s support for reasonable, achievable mandatory climate change legislation and the company’s endorsement of the Low Carbon Economy Act of 2007 introduced by Sens. Jeff Bingaman and Arlen Specter. The report also identifies the steps AEP is taking to reduce and offset its greenhouse gas (GHG) emissions, including demonstrating and deploying carbon-capture technology on two existing pulverized coal plants, building new plants with lower emission designs, continuing to improve the efficiency of its existing coal-fueled fleet, and adding 1,000 megawatts (MW) of renewable generation capacity by 2011. AEP’s plans include additional investments in domestic GHG offsets, such as methane capture from livestock and landfills; increased investment in forestry offsets; and programs to offset GHG emissions from its 11,000-vehicle fleet and corporate aircraft.

AEP also set a self-imposed goal of reducing electricity demand by 1,000 MW by 2012, with 15 percent coming from AEP actions to improve internal efficiency and 85 percent through customer programs.

“Although significant focus remains on climate change and our response, we are studying how we can enhance the sustainability of our supply chain based on input we’ve received,” said Dennis Welch, executive vice president, Environment, Safety & Health and Facilities. “We are taking a hard look at what we purchase to see if there are better alternatives with fewer environmental impacts, even visiting suppliers as far away as China to learn more about their processes and impacts. That effort includes looking at our coal supplies to determine if there are ways to develop a process for evaluating the safety, health and environmental performance of our coal suppliers.

“Focus on suppliers as part of the sustainability process is new for utilities, but we are enthusiastic about the opportunities we may have to influence the impacts of our supply chain,” Welch said.

In August 2007, AEP was the first utility to join the Green Suppliers Network (GSN). GSN is a joint project of the U.S. Environmental Protection Agency and the National Institute of Standards and Technology´s Manufacturing Extension Partnership within the U.S. Department of Commerce. Through its participation, AEP will work with small- to medium-sized suppliers to help them become more competitive and reduce their environmental impact. Three AEP suppliers already have signed up to participate.

AEP’s Corporate Sustainability Report is available online at http://www.AEP.com/cr. Printed copies of the report also can be requested at http://www.AEP.com/cr. To reduce the impact of printing, the report was printed on 50 percent recycled paper containing 25 percent post-consumer waste with soy-formulated inks. Printing was done by the only certified totally enclosed commercial print facility in the United States, which means virtually no volatile organic compound emissions are released from the printer’s production facilities into the atmosphere.

American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP’s transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP’s headquarters are in Columbus, Ohio.




This report made by American Electric Power and its Registrant Subsidiaries contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the registrants believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: electric load and customer growth; weather conditions, including storms; available sources and costs of, and transportation for, fuels and the creditworthiness and performance of fuel suppliers and transporters; availability of generating capacity and the performance of AEP’s generating plants; AEP’s ability to recover regulatory assets and stranded costs in connection with deregulation; AEP’s ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; AEP’s ability to build or acquire generating capacity (including the company’s ability to obtain any necessary regulatory approvals and permits) when needed at acceptable prices and terms and to recover those costs through applicable rate cases or competitive rates; new legislation, litigation and government regulation including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances; timing and resolution of pending and future rate cases, negotiations and other regulatory decisions (including rate or other recovery of new investments in generation, distribution and transmission service and environmental compliance); resolution of litigation (including disputes arising from the bankruptcy of Enron Corp. and related matters); AEP’s ability to constrain operation and maintenance costs; the economic climate and growth in AEP’s service territory and changes in market demand and demographic patterns; inflationary and interest rate trends; volatility in the financial markets, particularly developments affecting the availability of capital on reasonable terms and developments impairing AEP’s ability to refinance existing debt at attractive rates; AEP’s ability to develop and execute a strategy based on a view regarding prices of electricity, natural gas and other energy-related commodities; changes in the creditworthiness of the counterparties with whom AEP has contractual arrangements, including participants in the energy trading market; actions of rating agencies, including changes in the ratings of debt; volatility and changes in markets for electricity, natural gas, coal, nuclear fuel and other energy-related commodities; changes in utility regulation, including the potential for new legislation in Ohio and the allocation of costs within regional transmission organizations; accounting pronouncements periodically issued by accounting standard-setting bodies; the impact of volatility in the capital markets on the value of the investments held by AEP’s pension, other postretirement benefit plans and nuclear decommissioning trust; prices for power that AEP generates and sells at wholesale; changes in technology, particularly with respect to new, developing or alternative sources of generation; other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.

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