AEP Completes Second Wind Energy Purchase in Its Eastern States for Appalachian Power Customers

COLUMBUS, Ohio, Sept. 24 /PRNewswire-FirstCall/ -- American Electric Power subsidiary Appalachian Power Co. has signed a long-term power purchase agreement for renewable wind energy with Camp Grove Wind Farm LLC, a wind project majority owned by Orion Energy Group LLC.

Through the 20-year agreement, Appalachian Power will purchase 75 megawatts (MW) of wind energy from the 150-MW Camp Grove Wind Farm that currently is being constructed near Camp Grove, Ill., in Stark and Marshall counties. Camp Grove Wind Farm is expected to be on line by the end of 2007. The agreement is subject to approval from the Public Service Commission of West Virginia. Pricing terms are confidential.

"As we evaluate how to balance the growing electricity demands of our customers with our commitment to addressing our greenhouse gas emissions, wind energy can play an important role," said Michael G. Morris, AEP chairman, president and chief executive officer. "With the 200 megawatts of renewable energy contracts that we announced last month, this agreement with Camp Grove brings our long-term renewable energy purchase commitments to more than 700 megawatts. Coupled with 310 megawatts of wind generation that we've owned and operated in Texas for years, the total wind energy portfolio that AEP can rely on to serve our customers is 1,050 megawatts.

"Renewables are still only a small component of our generating capacity, but our commitment to renewable development is clearly demonstrated by our ever-growing reliance on renewable energy to serve our customers and our recently announced plans to link wind generation with large-scale battery storage to help offset its intermittent nature. Companies like AEP will support renewable generation deployment, where it is feasible and economically viable, without the mandate of a one-size-fits-all federal requirement," Morris said.

The power purchase agreement with Camp Grove is part of AEP's voluntary plans to add 1,000 MW of new wind energy by 2011 as a component of the company's comprehensive strategy to address its greenhouse gas emissions (GHGs). The addition of wind capacity to AEP's energy portfolio avoids an increase in GHGs that would otherwise occur if AEP used traditional fossil generation to meet growing customer demand.

AEP issued requests for proposals April 2 for up to 260 megawatts of wind energy for Appalachian Power and up to 100 megawatts of wind energy for its Indiana Michigan Power utility unit. AEP announced Aug. 8 that each utility had entered into a 100-MW (nameplate) long-term power purchase agreement with Fowler Ridge Wind Farm in Indiana. AEP anticipates entering into additional power purchase agreements for Appalachian Power for up to another 100 MW of wind energy.

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 more than 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.

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 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 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; 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.