AEP and transmission customers reach agreement on new rates

COLUMBUS, Ohio, Nov. 8, 2005 – American Electric Power (NYSE: AEP) and customer representatives in the AEP zone of PJM Interconnection have reached agreement on a schedule of transmission and ancillary-service rate changes that would update prices to reflect costs of providing service on AEP´s eastern transmission network.

The agreement, subject to Federal Energy Regulatory Commission (FERC) approval, would produce approximately $22 million in additional net revenues from AEP´s wholesale transmission service accounts during 2006.

"We believe the terms of this agreement are favorable for AEP and its customers," said Craig Baker, AEP´s senior vice president of regulatory services.

"The increase in rates is primarily due to the loss of revenues from point-to-point transmission service resulting from FERC-directed transmission rate policies," Baker said. "SECA (Seams Elimination Charge Adjustment) charges approved by the FERC mitigate those losses, but only until next April."

The new rates would take effect in steps. The first step would be effective immediately; the second would begin with expiration of the temporary SECA charges, scheduled for April 1, 2006; and the last step would take effect either Aug. 1, 2006, or the first day of the month after the Wyoming-Jacksons Ferry 765-kilovolt transmission line enters service, whichever is later. The new line will run from Wyoming, W.Va., to Jacksons Ferry, Va.

In addition to the changes in network transmission rates, ancillary-service rates would be adjusted. The annual revenue requirement charged by PJM for transmission system voltage support from AEP´s generation fleet (ancillary service schedule 2) would increase and the AEP rate for scheduling, system control and dispatch service (ancillary service schedule 1) would decline.

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; 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.); AEP´s ability to constrain its operation and maintenance costs; AEP´s ability to sell assets at acceptable prices and on other acceptable terms, including rights to share in earnings derived from the assets subsequent to their sale; 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; volatility and changes in markets for electricity, natural gas, and other energy-related commodities; changes in utility regulation, including membership in regional transmission structures; 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.

David Hagelin
Corporate Media Relations

Julie Sloat
Vice President, Investor Relations