AEP and Allegheny 765-kV transmission project approved by PJM

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COLUMBUS, Ohio, June 22, 2007 – American Electric Power’s (NYSE: AEP) 765-kilovolt (kV) joint transmission line proposal with Allegheny Energy Inc. (NYSE: AYE) was approved today by PJM Interconnection (PJM).

The PJM board included the Potomac-Appalachian Transmission Highline (PATH) project in their five-year PJM Regional Transmission Expansion Plan (RTEP) designed to maintain the reliability of the transmission grid. The PJM plan approves the building of 250 miles of 765-kV extra-high voltage trans-mission from AEP’s Amos substation near St. Albans, W.Va., to Bedington substation, northeast of Martinsburg, W.Va. Another 40 miles of transmission, consisting of twin-circuit 500-kV transmission, will be constructed from Bedington to a new substation to be built at Kemptown, located southeast of Frederick, Md.

AEP and Allegheny announced plans April 18 to form a joint venture to build PATH. The total project is estimated to cost approximately $1.8 billion. AEP’s estimated share of the costs will be approximately $600 million. The PJM RTEP calls for the PATH line to be put in service by June 2012 to meet the reliability needs of the region.

“PJM approval allows us to move forward with construction of a significant portion of the I-765 TM transmission superhighway that is urgently needed to help relieve transmission congestion and enhance reliability in PJM. PJM’s analysis shows that the transmission system in this region will be overloaded as soon as 2012 unless upgrades are made. This project will expand the benefits of 765-kV extra-high voltage transmission in PJM to enhance reliability and address issues preventing efficient flow of electricity into this area,” said Michael G. Morris, AEP chairman, president and chief executive officer.

AEP and Allegheny expect to formalize their joint venture agreement for PATH within the coming weeks and file for incentive rate recovery from the Federal Energy Regulatory Commission (FERC). AEP and Allegheny also will begin work on a routing study and environmental assessment for the project. The companies will seek regulatory approvals from the utility commissions in both West Virginia and Maryland for the project following the completion of the routing study.

AEP will have lead responsibility for engineering, designing and managing the construction of the 765-kV elements of the project. Allegheny will have similar responsibilities for the twin-circuited 500-kV line. Each company will provide services to the joint venture for siting, acquiring rights-of-way, securing regulatory approvals from the states the line crosses and maintenance of the project.

The PATH project encompasses the first half of the AEP I-765TM Interstate Project, a 550-mile, $3 billion 765-kV transmission line proposed by AEP in January 2006. The remaining portion of AEP’s proposed I-765 TM Interstate Project from Kemptown Station into New Jersey remains under study by PJM and is not part of the joint venture.

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 or regulation in Ohio and/or Virginia 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.

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Melissa McHenry
Manager, Corporate Media Relations

Julie Sloat
Vice President, Investor Relations