AEP focused on investment to fuel growth Morris tells shareholders at annual meeting

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COLUMBUS, Ohio, April 22, 2008 – American Electric Power (NYSE: AEP) entered 2008 with a strong balance sheet, stable credit profile and favorable dividend yield to support investment and growth in the years ahead, Michael G. Morris, AEP chairman, president and chief executive officer, told shareholders attending the company’s annual meeting today in Roanoke, Va.

“The more than 20,000 employees of American Electric Power delivered outstanding results in 2007. Our earnings rose to $3 per share, at the top of our earnings guidance for the year and up more than 8 percent from 2006. We also were able to reward our shareholders again in 2007 with a 5.1 percent increase in the dividend, following the 5.4 percent increase in 2006 and the 5.7 percent increase in 2005,” Morris said.

AEP increased the quarterly dividend paid on its common stock to 41 cents Oct. 23, 2007.

“We anticipate strong ongoing earnings in 2008 despite the anticipated U.S. economic downturn. In January, we raised our ongoing earnings projections and are forecasting growth of 5 percent to 9 percent annually through the end of the decade,” Morris added.

Much of the earnings growth in 2007 was the result of AEP’s success with its regulatory recovery efforts. AEP achieved rate adjustments in 2007 that added $352 million in revenue. The company already has achieved 92 percent of the additional $518 million in rate recovery sought in 2008 through successful regulatory proceedings in Oklahoma, Virginia and Ohio.

“We continue to see the benefits of the changes made in 2004 to move decision-making authority closer to our customers, regulators and stakeholders. I firmly believe our regulatory success to date can be traced to this change. We plan to build on this success as we enter the next phase of regulatory activity from now until 2012 during which time we anticipate filing more than 40 cases to recover the capital investments we must make to continue providing reliable, reasonably priced and environmentally responsible electricity to our customers.

“We are focused on helping our regulators and customers understand the benefits of the planned investments in our system, and we believe our efforts will be reflected in regulatory decisions to increase rates to reflect our growing costs of doing business. Even with ongoing capital investments close to $4 billion per year planned through the end of the decade, our customers will continue to benefit from some of the lowest rates in the regions that we serve,” Morris said.

AEP will allocate additional resources, including positions, to its utility subsidiaries in 2008 to supplement communications and relationships with regulatory commissions. Transmission and Generation positions also will be added to the local leadership teams at most utility subsidiaries and the scope of the utilities’ Regulatory, Finance and Corporate Communications areas will be expanded.

Even as the company works to complete its $5.4 billion program to retrofit its coal-fueled generating fleet to reduce emissions of sulfur dioxide, nitrogen oxides and mercury, AEP will focus on its strategy to address its greenhouse gas emissions (GHG). The company will validate carbon capture and storage technology in 2009 on its existing Mountaineer Power Plant in New Haven, W.Va. If deemed technically and economically feasible, AEP plans to install the technology at commercial-scale on AEP’s Northeastern Station in Oklahoma in 2012. Additionally, AEP continues to seek regulatory approval to start construction of Integrated Gasification Combined Cycle (IGCC) clean-coal generation.

“We were extremely pleased that the West Virginia Public Service Commission realized the value of IGCC technology in supporting the future of coal by granting approval for our proposed plant at New Haven,” Morris said. “We still need to spend some time addressing the potential costs for that plant with our regulators here in Virginia. They rejected construction and cost recovery plans for the plant last week, but we will petition for rehearing and provide additional cost information to help address their concerns.”

The IGCC plant AEP proposed to build in Ohio is on hold until recovery of generation investments in the state is clarified by pending electricity legislation.

AEP also is moving forward with its goal to add 1,000 megawatts of renewable energy to its generation fleet by 2011. Long-term power purchase agreements were signed in 2007 to add 275 megawatts of wind capacity to serve Appalachian Power and Indiana Michigan Power customers. AEP’s Appalachian Power and Southwestern Electric Power Co. (SWEPCO) subsidiaries issued RFP’s in April 2008 for an additional 165 megawatts of renewable generation. These renewable capacity additions are part of AEP’s overall strategy to help reduce the growth in GHG emissions fueled by increasing customer demand. The strategy includes investments in domestic GHG offsets, including methane and forestry programs; power plant and consumer-based efficiency improvements; and programs to reduce emissions from the company’s vehicle and aviation fleet. The strategy is detailed in the company’s 2008 Corporate Responsibility Report, which was provided to shareholders attending the annual meeting.

“Continuing the success of AEP in a world where greenhouse gases are regulated is foremost on our minds. The politics of moving forward with U.S. climate legislation is clear even if the timetable remains fuzzy. We are taking a proactive approach and expect to achieve early-mover advantages as we focus on how to best address our emissions,” Morris said.

AEP’s investment plans for transmission and distribution will contribute to reducing GHG emissions while supporting the company’s earnings growth strategy.

“A national interstate transmission system is critical to the reliability of the U.S. electricity grid as well as to economic growth and the efficiency of wholesale power markets. In nearly all cases, expanded transmission is more cost effective than building new generation and can help reduce the growth in emissions,” Morris said.

AEP’s transmission strategy calls for significant investment within its service territory and alliances with others to invest outside of the company’s traditional footprint. AEP’s joint venture with Allegheny Energy to build a 244-mile, extra-high-voltage transmission line extending from West Virginia into Maryland received approval and a return on investment of 14.3 percent from the Federal Energy Regulatory Commission in March 2008. Electric Transmission Texas (ETT), AEP’s joint venture with MidAmerican Energy Holdings Co. (MidAmerican) to build transmission in the Electric Reliability Council of Texas (ERCOT), was finalized in late 2007 and is contributing to earnings through the transfer of assets build by AEP near Laredo, Texas. Electric Transmission America (ETA), a separate joint venture formed with MidAmerican in 2007 to build transmission outside of ERCOT, is evaluating investment opportunities. The Southwest Power Pool is considering a backbone 765-kilovolt (kV) transmission system based on a technical study by AEP and a proposal to extend 765-kV transmission infrastructure through Michigan is being evaluated by PJM Interconnection and the Midwest ISO.

In distribution, AEP announced plans in 2007 to pursue development, integration and deployment of enhanced energy delivery and metering technologies and signed a Memorandum of Understanding with General Electric (GE) to bring advanced metering and the enhanced information technology to support it to approximately 200,000 AEP customers by the end of 2008. With regulatory approval, the company will extend the technology to all of its customers by 2015. The advanced meters, combined with special rate plans, will allow AEP’s customers to better understand their energy consumption, and through access to time-of-day pricing, reduce their electricity costs. The company’s agreement with GE will integrate the advanced meters with enhancement to its distribution and transmission backbone, addressing the full energy pathway from the power plant to the home.

Investments in efficiency and renewables nothwithstanding, customer demand growth requires that AEP build additional new baseload generation. AEP completed 340 megawatts of new simple cycle natural gas generation in Arkansas in 2007. In 2008, AEP will complete construction of 340 MW of natural gas generation in Oklahoma and hopes to begin work on another 508 megawatts of natural gas generation in Louisiana. AEP also will start construction on a partially completed, 580-MW natural gas plant in Ohio that was acquired in 2007.

The company received approval in two of three jurisdictions to build a 600-MW ultra-supercritical, advanced pulverized coal plant in Arkansas and is moving forward with approved pre-construction activities while waiting for approval from Texas.

Morris reaffirmed AEP’s ongoing earnings guidance of $3.10 to $3.30 per share for 2008.

“We’ve had significant success during the last two years, and I appreciate the efforts of all of our employees in making that possible. I also appreciate their continued focus on safety as we ended 2007 with no employee fatalities. In my mind, and I hope in the minds of every one of our employees, this is one of the most significant accomplishments for the year,” Morris said. “It is sobering that this is the first time in a decade, and only the second time in the last 37 years, that every AEP employee went home to his or her family every day. It is my sincere desire and hope that our renewed focus on safety will mean that zero fatalities and zero harm will become the norm, not the exception at AEP.

“The years ahead hold many challenges but the dedication and performance of our employees over the last few years has demonstrated that we are capable of turning daunting challenges into significant accomplishments. We believe the opportunities we face and the strategy we’ve put in place to address them will be very rewarding for our customers, our employees and our investors,” Morris said.

In business items, AEP shareholders re-elected 11 directors to hold office until the next annual meeting or until the election of successors. Directors elected to the Board are: Morris, 61, of Columbus, Ohio; E.R. Brooks, 70, of Granbury, Texas; Donald M. Carlton, 70, of Austin, Texas; Ralph D. Crosby Jr., 60, of McLean, Va.; John P. DesBarres, 68, of Park City, Utah.; Linda A. Goodspeed, 46, of Nashville, Tenn.; Thomas E. Hoaglin, 58, of Columbus, Ohio; Lester A. Hudson Jr., 68, of Charlotte, N.C.; Lionel L. Nowell III, 53, of Purchase, N.Y.; Richard L. Sandor, 66, of Chicago; and Kathryn D. Sullivan, 56, of Columbus, Ohio.

The Board of Directors adopted a resolution to reduce the number of directors from 14 to 11 effective today when Robert W. Fri, William R. Howell, and Donald G. Smith retired as directors. Morris praised their significant contributions to AEP.

Approximately 98 percent of shares voted ratified the firm of Deloitte & Touche LLP as AEP’s independent auditors for 2008.

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 nearly 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 American Electric Power and its Registrant Subsidiaries contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the registrants 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 and performance 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 (including the company’s ability to obtain any necessary regulatory approvals and permits) 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 of new investments in generation, distribution and transmission service and environmental compliance); resolution of litigation (including 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; volatility in the financial markets, particularly developments affecting the availability of capital on reasonable terms and developments impairing AEP’s ability to refinance existing debt at attractive rates; 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, coal, nuclear fuel and other energy-related commodities; changes in utility regulation, including the potential for new legislation in Ohio and the allocation of costs within regional transmission organizations; accounting pronouncements periodically issued by accounting standard-setting bodies; the impact of volatility in the capital markets on the value of the investments held by AEP’s pension, other postretirement benefit plans and nuclear decommissioning trust; prices for power that AEP generates and sells 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 Sherwood
Director, Investor Relations