CORPUS CHRISTI, Texas, April 25, 2001 - American Electric Power (NYSE: AEP) has its wholesale-focused growth strategy firmly in place. Now a key component of that strategy - corporate separation - has taken center stage.
“Successful implementation of our corporate separation plan is a key component of our wholesale strategy,” E. Linn Draper Jr., AEP’s chairman, president and chief executive officer, told shareholders attending the company’s annual meeting. “It is our single most important focus at AEP today.”
AEP’s corporate separation will create two wholly owned subsidiaries - one with AEP’s unregulated businesses and one with regulated businesses.
“Our corporate separation will provide investors with a clearer view of the value to be unlocked in each business,” Draper said. “It will help us focus on the unique needs of specific customer groups. And it will foster accountability within our business units while permitting more efficient financing.
”Our goal is to complete this process by year-end.”
Separating regulated and unregulated enterprises will enable AEP’s management to respond to regulatory changes and requirements, Draper said. By the end of 2001, AEP expects Ohio, Texas and Virginia will have implemented legislation that will pave the way for AEP to move its generation into an unregulated business subsidiary.
“That will make our unregulated generation portfolio one of the largest - and lowest cost - in the United States,” Draper said, noting that the generation is the core of the wholesale business that also includes marketing, trading and fuels procurement and transportation.
“We have created a unique business model that will support sustainable growth,” Draper said. “We have integrated low-cost highly efficient assets, our operational and technical expertise and our successful trading and marketing organization to create new products and businesses that will be the growth drivers.
“This new integration will continue to create value in the competitive and highly volatile new merchant energy marketplace,” Draper said.
While the wholesale business will be AEP’s primary growth driver, the company also owns the nation’s largest electric transmission and distribution grid.
“We cannot lose sight of our significant investment in the wires business,” Draper said. “We will continue to look for opportunities to extract value from that business.”
In business items, shareholders approved Deloitte & Touche LLP as independent auditors for 2001 and elected 14 directors to hold office until the next annual meeting or until successors are elected. Directors elected to the board are:
Dr. Morris Tanenbaum, 71, retired from the board. Tanenbaum had been an AEP director since 1989.
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 7 million customers worldwide and has more than $45 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.
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The comments set forth above include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, including (1) statements concerning the Company’s plans, objectives, expected performance and expenditures and (2) other statements that are other than statements of historical fact. These forward-looking statements reflect assumptions, and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially from forward-looking statements are electric load and customer growth, abnormal weather conditions, availability of generating capacity, the ability to recover net regulatory assets and other stranded costs in connection with deregulation of generation, the outcome of environmental regulation and litigation, the impact of fluctuation in commodity prices and interest rates, and other risks and unforeseen events over which the Company has no control. The reader is also directed to the Company’s periodic filings with the Securities and Exchange Commission for additional factors that may impact the Company’s results of operations and financial condition. Furthermore, historical results may not be indicative of the Company’s future performance.
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Corporate Media Relations
American Electric Power
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