COLUMBUS, Ohio, Jan. 28, 2008 – AEP MEMCO, LLC, a subsidiary of American Electric Power (NYSE: AEP) and part of its AEP River Operations division, has leased five towboats and purchased related assets from B&H Towing, Inc. and its affiliate, Lay Leasing, Inc. (the “Lay Companies”) of Paducah, Ky. The Lay Companies are privately-held companies that have supplied fully-found towboats to AEP River Operations for 12 years.
Certain employees of the Lay Companies who operated or managed its towboat fleet were offered positions with AEP River Operations, which has 1,200 employees and offices in Chesterfield, Mo. The towboat transfer and employee transition took effect on January 1, 2008.
Mark Knoy, president of AEP River Operations, anticipates leveraging the experience of the employees of the Lay Companies who come on board. "We look forward to sharing in their tremendous industry knowledge and operating insight,” Knoy said.
The five towboats – the motor vessels Andi Boyd, 4200 horsepower; Mary Harter, 4200 horsepower; Caleb Lay, 5000 horsepower; Paul Striegel, 5000 horsepower; and Helen Lay, 5600 horsepower – will be bareboat chartered to AEP MEMCO. These vessels represent virtually all the towboat fleet of the Lay Companies. Three additional vessels – the Cody Boyd, 2800 horsepower; Billy Joe Boling, 3600 horsepower; and Harry Brock, 3600 horsepower – that had been bareboat chartered to the Lay Companies by AEP MEMCO have been returned to the AEP River Operations fleet as part of the transaction.
With the completion of the transaction, the Lay Companies will continue to operate, primarily as a lessor of the five towboats that are bareboat chartered to AEP MEMCO, but will no longer independently operate a towboat fleet. AEP River Operations’ towboat fleet size will not change as a result of this transaction.
Financial details of the transaction and the number of employees of the Lay Companies involved were not released. AEP MEMCO is in discussions to assume the lease for the B&H Towing offices in Paducah in order to continue to occupy those offices.
Buck Lay and his wife Helen founded B&H Towing in 1985 in Paducah, Ky. Boats crewed by B&H Towing are used by AEP River Operations on the Illinois, the Upper Mississippi, and the Ohio rivers. Buck Lay, currently the chief executive officer of B&H Towing, said: "We have enjoyed an excellent, long-term relationship with AEP River Operations. We´re excited about the opportunities that this move gives to our employees as they join the AEP team."
AEP River Operations is the second-largest dry-bulk carrier on the inland rivers with approximately 2,600 open and covered hopper barges and approximately 75 towboats and shift boats, plus a number of harbor vessels.
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 more than 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.
This report made by AEP and its Registrant 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; AEP’s ability to recover regulatory assets and stranded costs in connection with deregulation; AEP’s ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; AEP’s ability to build or acquire generating capacity when needed at acceptable prices and terms and to recover those costs through applicable rate cases or competitive rates; new legislation, litigation and government regulation including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter 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. and related matters); AEP’s ability to constrain operation and maintenance costs; the economic climate and growth in AEP’s service territory and changes in market demand and demographic patterns; inflationary and interest rate 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 of the counterparties with whom AEP has contractual arrangements, including participants in the energy trading market; 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 the potential for new legislation in Ohio and membership in and integration into regional transmission organizations; 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 sell at wholesale; changes in technology, particularly with respect to new, developing or alternative sources of generation; other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.