COLUMBUS, Ohio, Feb. 27, 2001 – American Electric Power (NYSE: AEP) and Xcel Energy Inc. (NYSE: XEL) have reached an agreement today to sell 94.75 percent of the issued share capital of Yorkshire Power Group Inc. to Innogy Holdings plc, a major integrated energy company in the United Kingdom.

AEP and Xcel each hold a 50 percent interest in Yorkshire, a UK retail electricity and gas supplier and electricity distributor. AEP is selling its entire share of Yorkshire. Xcel will maintain a 5.25 percent interest in Yorkshire. AEP and Xcel acquired Yorkshire in April 1997.

Under the terms of the agreement with Innogy, AEP will receive $383 million in cash for its entire interest in Yorkshire. Xcel will receive $343 million and will retain a 5.25 percent interest in Yorkshire. Innogy is to assume all of Yorkshire Power Group’s debt of approximately $2 billion, which corresponds to an enterprise value of approximately $2.7 billion for 100 percent of Yorkshire.

The sale to Innogy is conditional only on the approval of the Innogy shareholders, which is expected by March 31, 2001. Completion of the transaction is not conditional on Innogy obtaining regulatory approval for the transaction. No regulatory approvals are required for AEP or Xcel.

“This transaction is consistent with our reframed growth strategy,” said E. Linn Draper Jr., AEP chairman, president and chief executive officer. “Our focus is on the wholesale business, which includes fuel procurement, energy assets, wholesale marketing and trading.”

AEP will continue to pursue its wholesale energy strategy in the UK and Europe through AEP Energy Services LTD, AEP’s London-based wholesale energy marketing and trading company.

“We will use the cash received from this transaction to pay down debt,” said Henry Fayne, AEP’s chief financial officer. “We expect 2001 ongoing earnings to remain in the previously announced range of $3.40 to $3.50 per share.”

The sale price results in full recovery of AEP’s net Sterling investment in Yorkshire; however, a one-time after-tax charge of $30.4 million relating to deferred foreign exchange losses will be included in 2000 results.

The sale of Yorkshire has no impact on SEEBOARD, AEP’s wholly owned UK retail and wires company. AEP will continue to consider all potential options for SEEBOARD.

Schroder Salomon Smith Barney advised AEP on the sale of its stake in Yorkshire.

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 one of America’s largest generators of electricity. The company is also a leading wholesale energy marketer and trader, ranking second in the U.S. in electricity volume. AEP provides retail electricity to more than 9 million customers worldwide and has more than $55 billion in assets, primarily in the U.S. with holdings in select international markets. Wholly owned subsidiaries are involved in power engineering and construction services, energy management and telecommunications.