AEP, Citizens Against Pollution settle Gavin emissions lawsuit

COLUMBUS, Ohio, Dec. 7, 2006 – Ohio Power Company, a unit of American Electric Power (NYSE: AEP), has reached a settlement of a lawsuit filed by Citizens Against Pollution, a group consisting primarily of individuals living near AEP’s James M. Gavin power plant in southern Ohio, regarding reporting of sulfuric acid emissions from the plant.

Under terms of the settlement, the Gavin units will maintain sulfuric acid emissions at or below 14 parts per million (PPM) during normal plant operation when the Selective Catalytic Reduction (SCR) emissions reduction system is in use and at or below 22 ppm during normal plant operation when the SCR is not in use. These are levels currently achieved with and without the SCR during normal plant operation. The SCR, which reduces nitrogen oxide emissions that contribute to the formation of urban ozone (commonly referred to as smog), generally operates during the ozone season – May 1 through Sept. 30.

AEP also agreed to conduct periodic testing of sulfuric acid emissions levels and to monitor the plant’s sulfuric acid emissions mitigation system during testing, with results to be reported to the counsel for Citizens Against Pollution.

The settlement does not include a civil penalty or establish a financial penalty for exceeding the agreed-to levels. Should sulfuric acid emissions exceed the agreed-to levels, AEP will submit required notifications to federal, state and local emergency response agencies.

“We’re pleased to have reached a settlement that brings this lawsuit to an end and recognizes the current operating parameters of the plant,” said Nick Akins, executive vice president – generation for AEP.

The lawsuit, filed in June 2004 by Citizens Against Pollution in U.S. District Court for the Southern District of Ohio, alleged that sulfuric acid emissions occurring at Gavin since the installation of SCRs in 2001 violate the Resource Conservation and Recovery Act (RCRA), the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and the Emergency Planning and Community Right to Know Act (EPCRA).

AEP complied with applicable regulations, the company said.

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 build or require generating capacity when needed at acceptable prices and terms and to recover those costs through applicable rate cases or competitive rates; 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. and related matters); AEP´s ability to constrain its operation and maintenance costs; AEP´s ability to sell assets at acceptable prices and on other acceptable terms; 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; 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 implementation of EPACT and membership in and integration into 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.

Pat D. Hemlepp
Director, Corporate Media Relations