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January 12, 2006

Appalachian Power yesterday filed an application with the Public Service Commission of West Virginia seeking authority to construct a 600-megawatt Integrated Gasification Combined Cycle (IGCC) electric generating unit in West Virginia. The proposed power plant would be located next to the company’s Mountaineer Plant near New Haven in Mason County.

Gov. Joe Manchin announced the filing in his State of the State address, saying that progress to site an IGCC plant in West Virginia is good economic development news.
“As one of the first commercial scale gasification projects, this proposed plant will offer the state an opportunity to lead the nation in the development of clean coal technology for power generation,” Gov. Manchin said. “Gasification technology also offers future opportunities to produce clean liquid fuels and chemical feedstock for other industries.”
An IGCC power plant efficiently reduces and removes sulfur dioxide, nitrogen oxides, particulates and mercury from plant emissions. IGCC plants also offer the opportunity for more efficient, less costly carbon capture for disposal in deep geologic formations.

The filing for a Certificate of Public Convenience and Necessity reflects Appalachian Power’s need for new generating capacity to meet its customers’ growing demand for electricity. Although Appalachian Power has not made a final decision about whether it will build a plant in West Virginia, the certificate is the first step required before the company could proceed with construction of a plant, according to Dana Waldo, Appalachian Power president and COO.
“We’re pleased to be able to take this next step in the regulatory process to site an IGCC plant in West Virginia,” Waldo said. “Looking beyond this plant, we also have committed to work with the Governor to address policy and technical issues related to his Coal Conversion Initiative.”
Appalachian Power’s parent company, American Electric Power (NYSE: AEP), announced in 2004 that it plans to build up to 1,200 megawatts of new generation using IGCC technology somewhere in its eastern service territory, and last year narrowed its possible sites to one each in West Virginia, Ohio and Kentucky. The company has since filed a cost recovery plan for a plant in Ohio with the Public Utilities Commission of Ohio, and has stated its intention to build the first 600-megawatt plant along the Ohio River in Meigs County, if cost recovery is ensured.

Appalachian Power provides electricity to 1 million customers in Virginia, West Virginia and Tennessee.  It is a unit of American Electric Power, the nation’s largest electricity generator.  AEP owns more than 36,000 megawatts of generating capacity and is one of the nation’s largest electric utilities, with more than 5 million customers in 11 states.

This report made by AEP and certain of its 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; the ability to recover regulatory assets and stranded costs in connection with deregulation; the ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; new legislation, litigation and government regulation including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon 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.); AEP´s ability to constrain its operation and maintenance costs; AEP´s ability to sell assets at acceptable prices and on other acceptable terms, including rights to share in earnings derived from the assets subsequent to their sale; the economic climate and growth in AEP´s service territory and changes in market demand and demographic patterns; inflationary 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 and number of participants in the energy trading market; changes in the financial markets, particularly those affecting the availability of capital and AEP´s ability to refinance existing debt at attractive rates; 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 membership in regional transmission structures; 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 and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.

Jeri Matheney
(304) 348-4130
Cell: (304) 543-1377


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