AEP RESCo Terms Court Judgment Equitable" ; Will Review Next Steps Regarding Long Island Power Transmission Project

Feb. 18, 1999•News Release

COLUMBUS, Ohio, Feb. 18, 1999 -- AEP Resources Service Company (AEP RESCo), a subsidiary of American Electric Power (NYSE: AEP), has received a judgment of the Supreme Court of the State of New York, County of Nassau, regarding the engineering and construction of a transmission project to bring additional power to Long Island. The judgment defines how the parties -- AEP RESCo, the Long Island Power Authority (LIPA) and TransEnergie, a subsidiary of Hydro-Québec -- are to move forward in development of this project. The judgment, dated Feb. 11, stems from a decision issued Feb. 1 by the Hon. F. Dana Winslow that annulled a contract awarded by LIPA to TransEnergie. The contract covered the evaluation of the technical, environmental and economic feasibility of transmitting electrical power to Long Island via a subsea cable from the mainland. LIPA bundled the actual construction phase with the evaluation phase in awarding the bid to TransEnergie. AEP RESCo had proposed to construct an independent transmission project that employs alternating current (AC) and state-of-the-art, proven technology that can control the flow of power. Citing that its bid was at least $22 million less than Transenergie's for the construction phase, and that its bid had not received proper consideration, AEP RESCo filed suit to set aside the contract. "The judge handed down an equitable decision, and we are considering a variety of factors going forward," said John Provanzana, general manager of AEP RESCo. "We sincerely believe that the breakthrough, proven technology we proposed for this project would be of great benefit to Long Island electricity users and the energy industry." The Feb. 11 judgment includes orders to the effect that: AEP may elect to proceed with an independent evaluation of the project at its own expense; LIPA will cooperate equally with AEP and TransEnergie; the timeline for the project is extended nine months from Feb. 11; and LIPA shall submit agreements arising out of the RFP to the Public Authorities Control Board and the State Controller for review and approval. The Court will retain jurisdiction over the project and through the construction award. "This project has merit, and we are pleased to be included. The technology we proposed is perfect for this project," Provanzana said. AEP RESCo, headquartered in Columbus, Ohio, provides customized engineering, procurement and construction services -- including substation, transmission line, energy conversion and power generation projects -- for domestic and international customers. A variety of additional services, such as system infrastructure planning, testing, training and financing, can be bundled with each project. AEP RESCo has extensive project experience in the United States, the People's Republic of China, Taiwan, Krgyzstan, Russia, Georgia, Armenia, Pakistan and Venezuela. AEP, a global energy company, is one of the United States' largest investor-owned utilities, providing energy to 3 million customers in Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West Virginia. AEP has holdings in the United States, the United Kingdom, China and Australia. Wholly owned subsidiaries provide power engineering, energy consulting and energy management services around the world. The company is based in Columbus, Ohio. On Dec. 22, 1997, AEP announced a definitive merger agreement for a tax-free, stock-for-stock transaction with Central and South West Corp., a public utility holding company based in Dallas.

For More Information, Contact: Deb Strohmaier Senior Media Representative American Electric Power 614/223-1656

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