7/3/2008

AEP SWEPCO receives Texas Commission approval to build 600-MW coal-fueled plant

SHREVEPORT, La., July 3, 2008 – The Public Utility Commission of Texas (PUCT) has approved an application by Southwestern Electric Power Company (SWEPCO), a unit of American Electric Power (NYSE: AEP), to construct a 600-megawatt coal-fueled power plant in Hempstead County in southwest Arkansas. The three-member commission voted 2-1 to approve SWEPCO’s request at the PUCT’s July 3 open meeting in Austin.

“The Texas Commission’s approval of the John W. Turk, Jr. Power Plant means Texas customers will continue to benefit from a reliable and affordable supply of electricity in the years ahead,” said Michael G. Morris, AEP Chairman, President and Chief Executive Officer.  “Coal is essential to meeting the growing energy needs of our region and our country, and we are putting new technology to work in a facility that will generate electricity more efficiently with less environmental impact.”

SWEPCO has now received approval to build the plant from all three of the states the company serves. The five-member Louisiana Public Service Commission (LPSC) unanimously approved the request for certification March 19. The Arkansas Public Service Commission approved SWEPCO’s request Nov. 21, 2007, and declined a request by certain intervenors in the case for rehearing Dec. 31, 2007. Intervenors have since appealed the case to the Arkansas Court of Appeals, where it is pending.

SWEPCO is awaiting an air permit from the Arkansas Department of Environmental Quality before construction of the power generation facilities can begin. “We continue to work with ADEQ and hope to have the air permit by the third quarter of this year,” said Paul Chodak, SWEPCO President and Chief Operating Officer.

The estimated cost of the plant is approximately $1.52 billion with SWEPCO investing 73 percent of the total. SWEPCO will own 440 megawatts of the plant´s capacity. Construction will take approximately 48 months, with an expected commercial operation date in late summer 2012.

The plant will use "ultra-supercritical" advanced coal combustion technology, that operates at higher temperatures and pressures to reduce emissions and will be one of the first plants of its type to go into operation in the United States. The plant will use low-sulfur coal and will include state-of-the-art emission control technologies, including a design that allows for the retrofit of carbon dioxide controls.

The baseload coal-fueled plant is part of SWEPCO’s previously announced plans to meet short-term and long-term energy needs of its customers. The company has completed a 340-megawatt natural gas-fueled peaking plant at Tontitown in Northwest Arkansas. The company also plans to build a 500-megawatt, combined-cycle natural gas-fueled plant at its existing Arsenal Hill Power Plant in Shreveport, La.

Since the 1970s, SWEPCO has pursued a strategic fuel mix of coal- and lignite-fueled baseload generation and natural-gas fueled peaking and intermediate facilities. “With the Turk Plant and our new intermediate and peaking facilities, we are continuing a diversified fuel strategy that benefits customers by keeping our electricity prices among the lowest in the region,” said Chodak.

The Turk Plant is named for John W. Turk, Jr., who served as SWEPCO president and chief executive officers from 1983 to 1988. Turk pioneered the company’s fuel shift from natural gas to coal in the 1970s, when he crafted one of the first electric utility contracts for Powder River Basin coal from Wyoming. In the 1980s he added lignite to SWEPCO’s fuel mix. Turk graduated from the University of Texas and lives in Longview.

“We thank the many community leaders, elected officials, business organizations and customers who have supported SWEPCO in this important request,” said Chodak. “Your voices from across East Texas and the Panhandle were heard in Austin, and we will continue our commitment to bring reliable, affordable electricity to the customers and communities we serve as we pursue this project.”

SWEPCO serves more than 464,000 customers in three states, including 112,000 in western Arkansas, 176,000 in Northwest Louisiana, and 176,000 in East Texas and the Panhandle. SWEPCO’s headquarters are in Shreveport, La. News releases and other information about SWEPCO can be found at www.swepco.com.

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. News releases and other information about AEP can be found at www.aep.com.

This report made by AEP and its Registrant 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 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 AEP’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; 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 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 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; 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 and other energy-related commodities; changes in utility regulation, including the potential for new legislation in Ohio and membership in and integration into regional transmission organizations; 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; other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.

MEDIA CONTACTS:
SWEPCO Corporate Communications:
Mike Young, 318-673-3458
Scott McCloud, 479-318-673-3532
AEP Corporate Communications
Pat Hemlepp, 614-716-1620
Melissa McHenry, 614-716-1120

ANALYSTS CONTACT:
Julie Sloat
AEP Treasurer and Vice President, Investor Relations
614-716-2885

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