AEP to sell its share of South Texas Project to Cameco Corporation

COLUMBUS, Ohio, March 1, 2004 - American Electric Power (NYSE: AEP) subsidiary Texas Central Co. (formerly known as Central Power and Light) has signed an agreement to sell its 25.2 percent share of the South Texas Project (STP) nuclear plant to Cameco South Texas Project LP, a wholly owned U.S. subsidiary of Cameco Corp. for approximately $332.6 million. The final purchase price is subject to closing adjustments such as taxes and inventory. Proceeds from the sale will be used to reduce debt.

As of Dec. 31, 2001, the book value of AEP’s share of STP was approximately $1.5 billion. AEP will file with the Public Utility Commission of Texas (PUCT) to recover stranded costs associated with this asset pursuant to Texas restructuring legislation.

STP is a 2,500-megawatt nuclear plant located in Matagorda County, Texas, approximately 90 miles southwest of Houston. Texas Central Co.’s (TCC) 25.2 percent share of the plant is approximately 630 megawatts. STP co-owners include Texas Genco (30.8 percent), San Antonio City Public Service Board (28 percent) and Austin Energy (16 percent). The plant is operated by STP Nuclear Operating Company.

The sale of TCC’s share of STP is subject to a right of first refusal of the co-owners. The sale is also subject to regulatory approvals including federal clearance pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and approvals from the Nuclear Regulatory Commission and Federal Energy Regulatory Commission. If the right of first refusal is not exercised, AEP expects the sale to close in the second half of 2004.

“We are pleased to announce a sale agreement for STP as we continue moving forward with the sale of all of our Texas Central generating assets in conjunction with the PUCT advisors and legal counsel,” said Michael G. Morris, AEP’s chairman, president and chief executive officer. “We are evaluating bids for the other TCC generating assets, including a 632-megawatt coal-fired generating plant, eight natural gas-fired plants and a small hydro facility, and are working diligently to expedite the sale of these remaining facilities in order to file for stranded cost recovery.”

AEP announced plans in December 2002 to sell all of the generation assets owned by TCC to determine their market value for calculating stranded costs (the amount that the book value exceeds the market value of the assets) under Texas electric restructuring legislation. A competitive bidding process for the assets began in June 2003. Credit Suisse First Boston LLC is AEP’s advisor for the sale.

Texas Senate Bill 7 on electric restructuring provides for recovery of stranded costs as part of the transition to a competitive retail market. Once the PUCT approves the amount of stranded costs, Senate Bill 7 permits the PUCT to authorize recovery of stranded costs through transmission and distribution rates, including costs associated with the issuance of securitization revenue bonds. The 4,497 megawatts of TCC generation had a net book value of approximately $1.8 billion on Dec. 31, 2001.

Cameco Corp., based in Saskatoon, Saskatchewan, is the world’s largest uranium supplier providing uranium products to generate electricity in nuclear plants around the world. Cameco’s shares trade on the Toronto and New York stock exchanges.

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.

The comments set forth above contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and 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; abnormal weather conditions; available sources and costs of fuels; availability of generating capacity; the speed and degree to which competition is introduced to the company´s service territories; the ability to recover stranded costs in connection with deregulation; new legislation and government regulation including (i) requirements for reduced emissions of sulfur, nitrogen, carbon and other substances and (ii) electricity transmission policy; pending and future rate cases and negotiations; oversight and/or investigation of the energy sector or its participants; the company´s ability to successfully control costs; the success of disposing of existing investments that no longer match the company´s corporate profile; international and country-specific developments affecting foreign investments including the disposition of any current foreign investments; the economic climate and growth in the company´s service territory and changes in market demand and demographic patterns; inflationary trends; accounting pronouncements periodically issued by accounting standard-setting bodies; the performance of AEP’s pension plan; electricity and gas market prices; interest rates; liquidity in the banking, capital and wholesale power markets; actions of rating agencies; changes in technology, including the increased use of distributed generation within the company´s transmission and distribution service territory; other risks and unforeseen events, including wars, the effects of terrorism, embargoes and other catastrophic events.

Media:Melissa McHenry
Manager, Corporate Media Relations

Analysts: Julie Sloat
Managing Director, Investor Relations

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