AEP WILL INVEST $7 MILLION TO ADDRESS COMMUNITY
CONCERNS OVER PLUME APPEARANCE AT GAVIN PLANT
Operational changes will return sulfur trioxide emissions to pre-SCR levels

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COLUMBUS, Ohio, Jan. 31, 2002 - American Electric Power (NYSE: AEP) today outlined its strategy for addressing the unexpected changes in plume appearance encountered at the Gen. James M. Gavin Power Plant last summer. Details of AEP’s plans were presented to community officials from the nearby village of Cheshire, Ohio, as part of the company’s ongoing efforts to share information on the situation with the community and its leaders.

AEP´s senior vice president of operations and technical services, John F. Norris Jr., said the company will install three separate injection systems on Gavin´s 1,300-megawatt Unit 2 by May, the start of the 2002 ozone season. AEP estimates the capital investment for the installation will be approximately $7 million.

The new systems will inhibit the formation of sulfur trioxide (SO3) during the combustion and environmental control processes. Operation of the unit´s new Selective Catalytic Reduction (SCR) system, in conjunction with the plant´s flue gas desulfurization (FGD) system, increased the concentration of SO3 and was responsible for the changed appearance of the plume.

Gavin Plant´s SCR systems were completed and placed in service in May 2001 to allow the company to earn "early reduction credits" to address new federal environmental requirements to substantially reduce the plant´s emission of nitrogen oxide (NOx). The systems are designed to operate during the five-month ozone season from May through September.

Norris indicated that the company will install the new systems on Unit 2 and bypass the SCR system on Unit 1 during 2002. "Our goal is to first demonstrate the SO3 solution on one unit and gain important operating experience before making the commitment to install and operate the system on both units," Norris said.

During the startup of the systems in 2001, plant employees and area residents began to notice that the exhaust plume from the 830-foot-high stack had changed. Ironically, the change seemed to be connected to the recent installation and operation of Gavin´s SCR systems in conjunction with the operation of the FGD systems. Subsequent analysis confirmed that the same mechanism used in the SCR systems to reduce NOx produced a small increase in the level of SO3. The situation was compounded by weather conditions that periodically forced the stack exhaust plume to the ground producing a "blue haze" at ground level that many residents found irritating.

Norris emphasized that at no time during the plant´s operation did emissions in the plume exceed any health-based ambient air quality standards or permissible exposure limits established by federal or state regulations. "But we fully understood the community´s concerns, and we worked as quickly as possible to resolve the situation," he said.

The search for a solution has been comprehensive, according to Greg Massey, Gavin Plant general manager. "We spent a great deal of time from July through October testing a variety of alternatives to address the problem," said Massey. "We hired world experts on SCR systems and gas testing firms to assist us in developing an appropriate mitigation strategy. In November and December we focused on analyzing the data and determining the best combination of systems to achieve the SO3 reductions we needed to reach."

Massey explained that the company will inject water, magnesium hydroxide and calcium hydroxide at specific points along the combustion and emission control path to produce the chemical changes required to reduce SO3 levels. "We obviously learned a great deal from this experience, and we´ll be able to adapt a lot of what we´ve learned for other FGD-equipped power plants that will install SCR systems.

"Focusing our efforts on Unit 2 in 2002 will allow us to address the concerns of the local community and gain valuable operating experience with the SO3 mitigation system," said Massey. He indicated that a decision to equip Unit 1 with a similar or modified system will be made following a review of Unit 2´s performance this summer.

"This situation was totally unexpected and required a concerted effort by our own staff, supplemented by industry experts, to understand exactly what was happening, why it was happening and what we might do to return things to the way they were," said Massey. "We regret that the situation occurred, but we had no way of anticipating it. We appreciate the patience of nearby residents as we´ve worked to resolve the problem."

American Electric Power is a multinational energy company based in Columbus, Ohio. AEP owns and operates more than 38,000 megawatts of generating capacity, making it America’s largest generator of electricity. The company is also a leading wholesale energy marketer and trader, ranking second in North America in wholesale electricity and wholesale natural gas volume. AEP provides retail electricity to more than 7 million customers worldwide and has holdings in the U.S. and select international markets. Wholly owned subsidiaries are involved in power engineering and construction services.

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Stephen K. Hiles
Principal Communications Consultant
614/223-1663