COLUMBUS, Ohio, Jan. 26, 2005 - American Electric Power (NYSE: AEP) has reached settlement agreements with the Commodity Futures Trading Commission (CFTC), the U.S. Department of Justice and the Federal Energy Regulatory Commission (FERC) regarding investigations of gas price reporting and gas storage activities.

Under terms of the settlement, AEP agrees to pay $30 million to the CFTC and $30 million to the Department of Justice to settle natural gas price reporting issues, and $21 million to the FERC to resolve allegations related to gas storage activities. With the settlements, all three agencies will end investigations and the CFTC will dismiss litigation filed Sept. 30, 2003.

"We need to put these issues and the uncertainty they created behind us," said Michael G. Morris, AEP´s chairman, president and chief executive officer.

"AEP is a very different company than it was in 2002 when we discovered and reported these improper activities by five employees," Morris said. "We have significantly reduced our participation in energy commodity trading and changed our policies and controls on the reporting of natural gas trade information to industry publications. We now view energy trading as a component of our traditional utility business."

After learning in September 2002 of an unrelated company discovering false reporting of gas price information for use in indexes prepared by trade publications, AEP immediately undertook its own internal investigation of gas price reporting practices. AEP determined that five employees had submitted inaccurate gas trading information to trade publications. The company immediately terminated the five employees, self-reported the incident to the FERC and the CFTC, publicly announced the employee terminations and put into place procedures to prevent a recurrence of the inaccurate submission of gas trading information.

The settlement with the FERC resolves allegations of undue preferences provided to an AEP affiliate by two AEP affiliates engaged in gas storage and transportation services and ends the FERC´s investigations of all AEP companies. AEP sold the two gas storage and transportation affiliates in 2004.

AEP recorded a $45-million provision in fourth-quarter 2003 in anticipation of a potential settlement. The remaining $36 million was recorded in fourth-quarter 2004 to reflect the final settlement, with $21 million recorded to discontinued operations. The company maintains its previously announced 2004 ongoing earnings guidance range of $2.20 to $2.40 per share.

American Electric Power owns more than 36,000 megawatts of generating capacity in the United States and is the nation´s largest electricity generator. AEP is also one of the largest electric utilities in the United States, with more than 5 million customers linked to AEP’s 11-state electricity transmission and distribution grid. The company is based in Columbus, Ohio.

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This report made by AEP and certain of its 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; the ability to recover regulatory assets and stranded costs in connection with deregulation; the ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; new legislation, litigation and government regulation including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon and other substances; resolution of pending and future rate cases, negotiations and other regulatory decisions (including rate or other recovery for new investments and environmental compliance); oversight and/or investigation of the energy sector or its participants; resolution of litigation (including pending Clean Air Act enforcement actions and disputes arising from the bankruptcy of Enron Corp.); AEP´s ability to constrain its operation and maintenance costs; the success of disposing of investments that no longer match AEP´s business model; AEP´s ability to sell assets at acceptable prices and on other acceptable terms; international and country-specific developments affecting foreign investments including the disposition of any foreign investments; the economic climate and growth in AEP´s service territory and changes in market demand and demographic patterns; inflationary 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 and number of participants in the energy trading market; changes in the financial markets, particularly those affecting the availability of capital and AEP´s ability to refinance existing debt at attractive rates; actions of rating agencies, including changes in the ratings of debt and preferred stock; volatility and changes in markets for electricity, natural gas, and other energy-related commodities; changes in utility regulation, including membership and integration in a regional transmission structure; 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 sells at wholesale; changes in technology and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.