AEP announces additional environmental investments at five plants in four states

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COLUMBUS, Ohio, June 17, 2005 -- American Electric Power (NYSE: AEP) today announced five additional locations where it will invest in advanced equipment to continue to improve the environmental performance of its coal-fired power plants. These projects are part of the company’s previously announced plan to invest at least $3.7 billion in environmental retrofits through 2010.

The next group of environmental control investments includes:
  • Flue gas desulfurization (FGD) system installations to reduce sulfur dioxide (SO2) emissions at
    • John E. Amos Plant units 1, 2 and 3 – 2,900 megawatts (MW) located at Winfield, W.Va;

    • Muskingum River Unit 5 – 585 MW located near Beverly, Ohio;

    • Big Sandy Unit 2 – 800 MW located near Louisa, Ky.; and

    • Conesville Unit 4 – 780 MW located at Conesville, Ohio

  • Selective catalytic reduction (SCR) system installation to reduce nitrogen oxide (NOx) emissions at Conesville Unit 4; and

  • FGD system upgrade at H. W. Pirkey Plant – 675 MW located near Hallsville, Texas.


Construction will begin when all design and engineering work is complete and once any needed approvals, permits and certificates are received. The projects will be completed between 2007 and 2010.

“Our investments in improving the environmental performance of our coal-fired generating stations will allow us to extend the environmental life of these plants and continue to use coal – our nation’s most abundant fuel source and the backbone of the economies in many states where we operate,” said Michael G. Morris, AEP chairman, president and chief executive officer. “Even with these significant investments, AEP will continue to provide some of the lowest-cost electricity available for our customers.”

FGD systems, commonly called scrubbers, reduce SO2 emissions, a contributor to acid rain, by up to 98 percent. FGD systems provide the additional benefit of removing oxidized mercury from the flue gas as well. SCR systems reduce NOx emissions, a contributor to the formation of urban ozone or smog, by up to 90 percent.

H. W. Pirkey Plant was equipped with an FGD system when it went into service in 1985. That system consistently removes nearly 80 percent of SO2. This original equipment will be upgraded to bring its removal rate into the 90-percent range.

Overall, these systems will meet the requirements of the U.S. Environmental Protection Agency’s Clean Air Interstate Rule (CAIR) and Clean Air Mercury Rule (CAMR). AEP plans to invest at least $3.7 billion by 2010 in environmental control equipment on existing plants to meet these increasingly stringent air quality regulations. Included in this total are previously announced FGD system installations on the one generating unit at Mountaineer Plant in West Virginia and on units 1 and 2 of Cardinal Plant in Ohio and both FGD and SCR system investments on units 1 and 2 at Mitchell Plant, also located in West Virginia. AEP anticipates that additional investments in the range of $1.5 billion will be needed between 2010 and 2020 to meet the requirements of CAIR and CAMR.

AEP also has filed with the Public Utilities Commission of Ohio seeking cost recovery for a new 600-megawatt clean-coal power plant with enhanced emission performance using Integrated Gasification Combined Cycle (IGCC) technology. The plant, which will be the largest commercial-scale IGCC plant in the United States, will be built in southern Ohio, once cost-recovery approval is received from the Ohio commission. A second 600-megawatt IGCC plant is under consideration by AEP for West Virginia, Ohio or Kentucky, but no decision has been announced.

AEP’s environmental construction investments will create a need for temporary labor, and positions will be filled through the contractors selected to install the equipment. Workers from all 14 building trades will be supplied through local union hiring halls. Additional full-time staff will be required at most of these locations once these projects are complete. The number of additional full-time staff will vary from location to location depending on the technology being installed.

American Electric Power owns more than 36,000 megawatts of generating capacity in the United States and is the nation´s largest electricity generator. AEP is also one of the largest electric utilities in the United States, with more than 5 million customers linked to AEP’s 11-state electricity transmission and distribution grid. The company is based in Columbus, Ohio.

This report made by AEP and certain of its subsidiaries contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its registrant subsidiaries 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 of fuel suppliers and transporters; availability of generating capacity and the performance of AEP’s generating plants; the ability to recover regulatory assets and stranded costs in connection with deregulation; the ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; new legislation, litigation and government regulation including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon and other substances; timing and resolution of pending and future rate cases, negotiations and other regulatory decisions (including rate or other recovery for new investments, transmission service and environmental compliance); oversight and/or investigation of the energy sector or its participants; resolution of litigation (including pending Clean Air Act enforcement actions and disputes arising from the bankruptcy of Enron Corp.); AEP´s ability to constrain its operation and maintenance costs; AEP´s ability to sell assets at acceptable prices and on other acceptable terms, including rights to share in earnings derived from the assets subsequent to their sale; the economic climate and growth in AEP´s service territory and changes in market demand and demographic patterns; inflationary trends; 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 and number of participants in the energy trading market; changes in the financial markets, particularly those affecting the availability of capital and AEP´s ability to refinance existing debt at attractive rates; actions of rating agencies, including changes in the ratings of debt; volatility and changes in markets for electricity, natural gas, and other energy-related commodities; changes in utility regulation, including membership and integration into regional transmission structures; accounting pronouncements periodically issued by accounting standard-setting bodies; the performance of AEP´s pension and other postretirement benefit plans; prices for power that AEP generates and sells at wholesale; changes in technology and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.
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