5/22/2006

AEP signs five new power supply contracts with municipal and cooperative utilities in Virginia and West Virginia

COLUMBUS, Ohio, May 22, 2006 – American Electric Power (NYSE: AEP) and its Appalachian Power operating unit have signed five multi-year wholesale power supply agreements with municipal and cooperative utilities in Virginia and West Virginia with a combined peak load of approximately 230 megawatts (MW).

In Virginia, Appalachian Power entered into new wholesale supply agreements with Craig-Botetourt Electric Cooperative (CBEC), the City of Radford and the City of Salem. The new 20-year contracts with these entities replace one-year agreements that expire June 30.

“CBEC has enjoyed a long-standing relationship with AEP which has been beneficial for both parties. After looking at several different avenues, we feel this new agreement with AEP will be in the best interest of our consumers to bring stability to our rate structure,” said Gerald Groseclose, general manager, CBEC.

AEP also signed the Town of Front Royal, Va., as a new wholesale customer. Front Royal signed a two-year contract with AEP for full-requirements electric service beginning July 1.

AEP was selected through competitive bid processes to serve all of the Virginia loads.

In West Virginia, Appalachian Power signed a long-term contract with the Musser Companies, comprised of the following seven private utilities: Black Diamond Power Co., Elk Power Co., Elkhorn Public Service Co., Kimball Light and Water Co., Union Power Co., United Light and Power Co., and War Light and Power Co. The new long-term contract replaces a short-term agreement that expires May 31.

“The relationship between Appalachian Power Company and the Musser Companies dates back to the 1920s. The renewal of this long-standing relationship should continue to be beneficial to all of the companies involved, as well as to our customers,” said David W. Musser, president, Musser Companies.

"Municipal and cooperative utilities are important customers for AEP. We provide a menu of power supply offerings to these customers, whether long-term cost of service arrangements supplied by our individual operating companies like Appalachian Power or short-term market offerings that we provide through a combination of market purchases and excess generation from the AEP system,” said Greg Hall, AEP vice president, energy marketing. “We are honored to provide these companies and the communities that they serve with reliable electricity at the most competitive prices available.”

AEP is one of the nation’s largest wholesale suppliers of generation to municipal utilities and cooperatives. In 2006, AEP will provide approximately 3,275 megawatts of full-requirements power to 55 municipal utilities and 25 electric cooperatives in the United States.

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 36,000 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 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). American Electric Power, based in Columbus, Ohio, is celebrating its 100th anniversary in 2006.

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 of the counterparties with whom AEP has contractual arrangements, including 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, particularly with respect to new, developing or alternative sources of generation, and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.

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