10/14/2003

AEP part of e7 project to construct micro-hydro turbine in Bhutan

COLUMBUS, Ohio - The e7, an international group of leading energy companies, has finalized plans to construct a micro-hydro power plant to bring electricity for the first time to Chendebji, a small, remote village high in the Himalayan Mountains. Construction on the 70-kilowatt project is scheduled to begin in Bhutan in November.

The e7 is an organization of leading energy companies from the G7 nations that collectively promote sustainable energy development. American Electric Power (NYSE: AEP) represents the United States in the e7 and is part of an e7 team co-financing the Bhutan project, including project leader Kansai Electric Power (Japan), Electricite de France (France), and Hydro-Quebec (Canada).

The chairmen of the e7 approved proceeding with the Bhutan project at their annual Summit meeting Oct. 9 in Washington, D.C. The project will include construction of a micro-hydro plant on the Lamchela Chu River to generate electricity and light the homes and school of the village of Chendebji, which has approximately 100 residents. Construction should be complete in approximately nine months, with electricity production beginning in late summer 2004.

"This micro-hydro project demonstrates e7´s commitment to helping deliver electricity and its environmental and quality-of-life benefits to the 2 billion people in the world who live without access to it," said E. Linn Draper Jr., immediate past e7 chairman and AEP chairman, president and chief executive officer. "In Bhutan, the steep and rugged mountains severely restrict access for several pockets of the population. This project will provide electricity and its associated health and quality-of-life benefits to a very remote location while also reducing greenhouse gas and other emissions associated with the burning of fossil fuels."

The Bhutan micro-hydro project was developed in cooperation with the Government of Bhutan as an e7 Clean Development Mechanism (CDM) demonstration project in Asia. The CDM is a project-based instrument of the Kyoto Protocol that allows public or private entities to invest in greenhouse gas (GHG) mitigating activities in developing countries and earn abatement credits for use to offset their own GHG emissions or for sale on the open market. The Bhutan project is expected to reduce 500 tons of carbon dioxide emissions every year by lessening the villagers´ dependence on fires for light, heat and cooking. If granted by the CDM Executive Board, CDM credits for the Bhutan project will be split between the Government of Bhutan and e7.

In a complementary initiative, the e7 is funding the village´s participation in the e7´s Micro-Solar Distance Learning Program. The e7 will install equipment and provide community training for satellite Internet connectivity powered by the project. This initiative will bring Internet access and the ability to send and receive email, data, voice and video to this remote region, providing a connection to the larger world.

The e7, founded in 1992, is an association of leading electric and energy companies from G7 nations. Members include AEP (U.S.), Electricite de France (France), Enel (Italy), Hydro-Quebec (Canada), Kansai Electric Power (Japan), Ontario Power Generation (Canada), RWE (Germany), Scottish Power (United Kingdom) and Tokyo Electric Power Generation (Japan). For more information, visit the e7 website: www.e7.org.

American Electric Power owns and operates more than 42,000 megawatts of generating capacity in the United States and select international markets and is the largest electricity generator in the U.S. AEP is also one of the largest electric utilities in the United States, with almost 5 million customers linked to AEP´s 11-state electricity transmission and distribution grid. The company is based in Columbus, Ohio.

Melissa McHenry
Manager, Corporate Media Relations
614/716-1120

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