AEP´s emission control equipment performs better than designed to reduce 2005 ozone season NOX emissions

Future investments will bring additional emission reductions and improve the environmental performance of AEP´s coal-fired generation fleet

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COLUMBUS, Ohio, Dec. 2, 2005 – American Electric Power (NYSE: AEP) submitted data about the emissions performance of its generating units during the 2005 ozone season to the U.S. Environmental Protection Agency (EPA) Nov. 29 indicating that its nitrogen oxides (NOX)-reducing selective catalytic reduction (SCR) equipment is performing better than designed to help improve air quality during the ozone season. AEP submits NOX emission data to the EPA as a participant in the EPA´s NOX Budget Trading Program.

Between May 1 and Sept. 30, 2005, AEP´s 50 coal-fired generating units located in the 22-state regional NOX control area emitted 45,945 tons of NOX while generating 54,641,950 megawatthours (MWh) of electricity. Between May 1 and Sept. 30, 2004, those same units emitted 58,698 tons of NOX while generating 51,787,843 MWh of electricity. As comparison, in 2000, before installation of SCR equipment on AEP´s coal-fired plants, AEP emitted 145,762 tons of NOX between May 1 and Sept. 30 while generating 51,827,692 MWh of electricity.

"AEP has invested nearly $1.3 billion in equipment retrofits to reduce NOX emissions at our plants. The very successful performance of this equipment and the diligence of our plant operators enabled us to achieve significant NOX emission reductions during the 2005 ozone season while generating more electricity," said Michael G. Morris, AEP chairman, president and chief executive officer.

"It is extremely challenging to retrofit a power plant with emissions control technology and ensure that the plant and the technology operate efficiently and effectively. AEP´s SCR equipment is consistently performing better than its design parameters to achieve greater than 90 percent reduction levels. As we move forward with an additional $4 billion in pollution control equipment retrofits before 2010, the excellent performance of this equipment demonstrates that we have the technological expertise to make our emissions reduction equipment work as well, and often better, than designed to improve the environmental performance of our very low-cost coal-fired power plants," Morris said.

AEP has been operating SCR systems on coal-fired generating units since 2001 and currently has SCR systems installed on 9,742 megawatts of coal-fired generation (14 generating units at eight plant sites). The company also operates low-NOX burners and other combustion control technologies that reduce NOX emissions at all of its other coal-fired plants. AEP´s SCR systems are designed to reduce NOX emissions by up to 90 percent; however, a majority of AEP’s SCR units achieve better than design and industry standards by consistently achieving NOX reductions of 92 to 94 percent.

AEP will invest an additional $310 million by 2010 to further reduce NOX emissions. This investment includes installations of SCR systems on an additional 1,939 megawatts of generation (three generating units at two plant sites) by 2009.

AEP also has made significant investment to reduce SO2 emissions, including installation of flue-gas desulfurization systems, commonly called scrubbers, on 5,061 megawatts of coal- or lignite-fired generation (eight units at six plant sites). After already spending more than $1 billion to reduce SO2 emissions since the mid-1990s, AEP will invest another $3.3 billion before 2010 to make even deeper cuts in SO2 emissions. AEP will install scrubbers on an additional 8,751 megawatts of coal-fired generation (14 generating units at eight plant sites) by 2010.

In addition to its retrofit program to reduce NOX, sulfur dioxide (SO2) and mercury emissions on its current generating fleet, AEP also has committed to build the first large-scale, base-load Integrated Gasification Combined Cycle clean-coal generating plant as soon as 2010. IGCC technology converts coal into a synthetic gas before it is burned. The process results in fewer emissions, and carbon capture and sequestration is expected to be easier from an IGCC plant than from a pulverized coal plant.

The EPA´s NOX Budget Trading Program is an ozone season cap-and-trade program that sets a cap on NOX emissions at a specified level. Sources are provided allowances (each allowance represents one ton of emissions) and each year the source must hold sufficient allowances to cover all NOX tons emitted by the source during the ozone season.

Ground-level ozone, or smog, is formed from NOX and volatile organic compounds (VOCs) in the presence of sunlight and heat. Levels are highest during the hot summer months when sunlight is strongest.

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.

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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);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 in 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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