Many AEP Customers Could Choose New Supplier of Electric Generation in Revised Pilot Program

ROANOKE, Va., Sept. 1, 1999 -- American Electric Power proposes to open 10% of its Virginia retail electricity sales or 250 megawatts of load -- involving approximately 17,500 customers by early 2001 -- to competitive suppliers of electric generation. The proposal is contained in a revised and updated Customer Choice Pilot Program filed today with the State Corporation Commission. All customers throughout AEP’s entire service area in central and southwest Virginia would be eligible to participate in the Pilot Program, according to the company’s proposal. Both the features and effective dates of AEP’s two-phase program are subject to SCC approval. Hearings are scheduled in November 1999. The Pilot Program filed today replaces a pilot plan filed in November 1998. After the General Assembly passed the Virginia Electric Utility Restructuring Act during its last session, an SCC hearing examiner directed AEP to revise its plan by Sept. 1. AEP proposes that starting in June 2000, some 3,500 customers would have the opportunity to receive electric generation from competitive suppliers. The number of participating customers could increase to approximately 17,500 in March 2001. The program will be open to residential, commercial and industrial customers. AEP serves 460,000 retail customers in Virginia. The company’s Pilot Program would lay the groundwork during 2000-2001 for a competitive market for electric generation. Under the Virginia Electric Utility Restructuring Act, which became law in July, the transition to a competitive market is to begin in January 2002. A competitive market will be open to all electric customers in Virginia by January 2004. Under this law the price of the generation portion of electric service will be set in a competitive market. Rates for transmission and distribution service will be set by federal and state regulatory authorities. “Our Pilot Program is intended to provide an opportunity for the company, customers and alternative suppliers of electric generation to develop and test the systems, procedures, practices and guidelines that are necessary for an effective transition to a competitive marketplace,” said Barry Thomas, director of regulatory affairs for AEP-Virginia. “Customers will learn how to shop for electric generation and become informed consumers who are capable of evaluating competing offers from new suppliers. Utilities and new suppliers have to develop systems for the sharing of data that facilitates the development of a competitive marketplace,” he said. AEP’s Pilot Program is expected to consist of these steps: education, volunteering, customer choice and enrollment. The two-step customer education campaign, beginning several months before the effective date of the program, is intended to create awareness of customer choice generally and to describe AEP’s program specifically. Information about how to participate in the program is to be made available to all customers. Those who want to participate can volunteer. If volunteering customers exceed space available, a lottery would be held to select participants. Those customers selected to participate would then receive information from suppliers. After weighing competing offers, such customers would then decide whether to continue to purchase generation from AEP or from an alternative supplier. If they choose an alternative supplier, they would then be enrolled in the program. AEP, a global energy company, is one of the largest investor-owned utilities in the U.S., providing energy to 3 million customers in Virginia, Tennessee, West Virginia, Kentucky, Ohio, Indiana and Michigan. AEP has holdings in the U.S., the United Kingdom, China and Australia.

For More Information, Contact: Tom Ayres Corporate Communications 540/985-2602

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