AEP To Participate In ISO Discussions

April 8, 1998•News Release

COLUMBUS, Ohio, April 8, 1998 -- American Electric Power (NYSE: AEP) announced today it has accepted an invitation from members of the proposed Alliance regional transmission entity and will "join in Alliance discussions going forward," said Bill Lhota, AEP executive vice president. Lhota said the company was pleased by the invitation because it believes an independent system operator (ISO) will be the best way to create seamless transmission pricing across large regions of the country. "AEP's decision to work with the Alliance companies is part of an overall strategy to achieve the company's ultimate goal -- to be part of an effort to create the largest possible regional transmission organization that supports a vigorous, competitive electricity market," Lhota said. In this regard, the company also intends to initiate concurrent discussions with the Midwest ISO and other interested parties to achieve that goal. Lhota said, "While the Alliance and Midwest ISO proposals contain many positive features, we hope that the ISO we join will be able to meet AEP's goal of providing a large, fair and efficient regional transmission system. AEP intends to work to create a regional ISO that will make it possible for a wide range of sellers to gain economically efficient access to critical customer markets. "In any ISO we join, we must also consider our intended merger with Central and South West and our goal of fully integrating operations with CSW to the southwest of AEP," Lhota said. "A broad ISO that links our integrated systems with transmission systems across the Midwest will provide competitively priced electricity to a major share of the eastern interconnected systems." An ISO pools the electric transmission systems of its members into a single regional system that is operated independently. An ISO promotes enhanced reliability of the system, ensures equal access to the system and expands the energy market. The Alliance regional transmission entity was originally proposed in December 1997 by Consumers Energy, Detroit Edison, Duquesne Light Co., Virginia Power, the FirstEnergy companies and the Allegheny Power companies. In January 1998, Cinergy Corp., Commonwealth Edison Co., Wisconsin Electric Power Co., Hoosier Energy Rural Electric Cooperative, Illinois Power Co., Wabash Valley Power Assoc., Ameren, Kentucky Utilities Co. and Louisville Gas & Electric Co. filed with the Federal Energy Regulatory Commission to form the Midwest ISO. AEP, which operates one of the largest electricity transmission systems in the world, at 21,943 miles, was a participant in discussions leading to formation of the Midwest ISO. AEP, a global energy company, is one of the United States' largest investor-owned utilities, providing energy to 2.9 million customers in Ohio, Indiana, Michigan, West Virginia, Virginia, Tennessee and Kentucky. AEP has holdings in the United States, the United Kingdom and China. Wholly owned subsidiaries provide power engineering, consulting and management services around the world. The company is based in Columbus, Ohio.

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

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