AEP pleased with DOE´s support of transmission development through draft transmission corridor designations

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COLUMBUS, Ohio, April 27, 2007 – American Electric Power (NYSE: AEP) commended the Department of Energy’s (DOE) designation of two draft National Interest Electric Transmission Corridors to address the significant congestion issues and reliability concerns currently impacting the transmission grid.

“We need to build a strong interstate transmission system, just like our interstate highway system, to help address the current inadequacies of our nation’s existing transmission infrastructure. DOE’s draft designations are an important step in fulfilling the process that Congress created to ensure the reliability of the electric power supply system and support the growth potential of our economy,” said Michael G. Morris, AEP chairman, president and chief executive officer. “If we develop a truly functional interstate transmission grid, power plants will compete against one another, the wholesale market will be more robust, and consumers will benefit from lower electricity costs and expanded access to renewable electricity that can be transported from the areas where it is viable to areas where it is needed.”

DOE’s draft Mid-Atlantic Area National Corridor designation includes an area for transmission development that would encompass AEP’s proposed I-765TM Interstate Project, a 550-mile, $3 billion 765-kilovolt (kV) transmission line to link West Virginia and New Jersey, and address congestion and reliability concerns in the eastern grid. AEP and Allegheny Energy recently announced a joint venture to build 765-kV transmission that would cover the first half of AEP’s I-765TM Interstate Project and Allegheny’s complementary Wylie Ridge-Kemptown transmission proposal by linking AEP’s Amos Station (near St. Albans, W.Va.) to Allegheny’s proposed Kemptown Station in Maryland.

“DOE’s draft Mid-Atlantic Corridor designation doesn’t change the approval process for our proposed projects in PJM, but it does provide important support for the development of solutions that are urgently needed to help relieve transmission congestion and enhance reliability for millions of consumers connected to the eastern grid,” Morris said. “It also addresses some of the issues that have plagued previous projects by making DOE the lead agency for the approval of projects that cross federal lands. At the state level, the federal government will become involved only if the states cannot reach workable solutions. We remain committed to working within the state processes to gain approval for our proposed transmission projects and strongly support public participation.”

AEP has identified an aggressive transmission development program over the last year. In addition to the proposals in PJM, AEP announced Electric Transmission Texas (ETT), a joint venture with MidAmerican Energy Holdings Co., in November 2006 to build up to $1 billion in transmission infrastructure within the Electric Reliability Council of Texas (ERCOT). ETT has since proposed a $7 billion transmission plan for ERCOT designed to support growth of renewable generation and the economic future of Texas. AEP also signed an memorandum of understanding with a subsidiary of ITC Holdings Corp. in November 2006 to perform a technical study evaluating the feasibility of extending AEP’s 765-kV transmission infrastructure through Michigan, a potential $2 billion investment. Additionally, AEP filed a $3 billion 765-kV transmission proposal for consideration in the Southwest Power Pool to reduce congestion and enhance reliability.

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.
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