<TABLE>
<CAPTION>
Selected Consolidated Financial Data
                                                                               Year Ended December 31,
                                                      1995             1994            1993             1992             1991     
                                                                                  (in thousands)
INCOME STATEMENTS DATA:
  <S>                                              <C>              <C>              <C>              <C>             <C>
  Operating Revenues                               $1,071,862       $1,031,151       $953,652         $843,996        $858,290 
  Operating Expenses                                  886,054          845,283        803,436          721,681         757,416 
  Operating Income                                    185,808          185,868        150,216          122,315         100,874 
  Nonoperating Income                                   5,202            7,030         27,343           47,170          54,999 

  Loss from Zimmer Plant Disallowance
    (net of tax)                                         -               -            144,533           -              -       
                                                              
  Income Before Interest Charges                      191,010          192,898         33,026          169,485         155,873 
  Interest Charges (net)                               80,394           83,053         88,924           93,241          88,894 
  Net Income (Loss)                                   110,616          109,845        (55,898)          76,244          66,979 
  Preferred Stock Dividend Requirements                11,907           12,084         11,062           10,220           7,125 

  Earnings (Loss) Applicable
    to Common Stock                              $     98,709       $   97,761      $ (66,960)        $ 66,024        $ 59,854 
</TABLE>
<TABLE>
<CAPTION>
                                                                                  December 31,
                                                     1995            1994            1993             1992            1991     
BALANCE SHEETS DATA:                                                            (in thousands)

  <S>                                              <C>             <C>             <C>              <C>             <C>
  Electric Utility Plant                           $2,820,208      $2,729,577      $2,645,055       $2,724,506      $2,667,259 
  Accumulated Depreciation                            953,170         884,237         811,817          754,367         693,085 
  Net Electric Utility Plant                       $1,867,038      $1,845,340      $1,833,238       $1,970,139      $1,974,174 
  Total Assets                                     $2,594,126      $2,594,342      $2,582,671       $2,371,370      $2,297,357 

  Common Stock and Paid-in Capital                $   615,453     $   606,668     $   607,072      $   607,072     $   587,624 
  Retained Earnings                                    74,320          46,976          18,288          127,562         130,765 
  Total Common Shareholder's Equity               $   689,773     $   653,644     $   625,360      $   734,634     $   718,389 
                                                                                                                               
  Cumulative Preferred Stock -
    Subject to Mandatory Redemption (a)          $     82,500     $   150,000     $   125,000     $    125,000    $     75,000 
                                                                                                                               
  Long-term Debt (a)                              $   990,796     $   997,608      $1,017,713      $   977,921     $   991,980 

  Obligations Under Capital Leases (a)           $     27,816    $     24,452   $      15,237    $       9,951   $       9,234 

  Total Capitalization and Liabilities             $2,594,126      $2,594,342      $2,582,671       $2,371,370      $2,297,357 
                      
(a) Including portion due within one year.
</TABLE>
<PAGE>
<PAGE>
MANAGEMENT'S NARRATIVE ANALYSIS OF
RESULTS OF OPERATIONS

Net Income Increases

 Net income increased slightly in 1995 over 1994 due to decreased interest
expense as a result of refinancing of debt at lower interest rates and
postponement in the replacement of retired debt.

 A favorable earnings impact from increased energy sales was offset by
corresponding increases in AEP System Power Pool (Power Pool) capacity
charges, property taxes, federal income taxes and severance charges in
connection with a realignment of operations.

Operating Revenues Increase

 Operating revenues for 1995 increased $40.7 million or 3.9%.  The
components of the change in revenues were as follows:

                                 Increase (Decrease)
(dollars in millions)            From Previous Year   
                                  Amount           %  
Retail:
  Price Variance . . . . . . . .   $ 4.2
  Volume Variance. . . . . . . .    40.5
  Fuel Cost Recoveries . . . . .    (5.1)
                                    39.6          4.2
Wholesale:
  Price Variance . . . . . . . .    (6.9)
  Volume Variance. . . . . . . .     3.5
                                    (3.4)        (4.3)

Other Operating Revenues. . . . .    4.5 
  Total . . . . . . . . . . . . .  $40.7          3.9

 The increase in 1995 operating revenues resulted predominantly from a 5%
increase in energy sales to retail customers primarily due to increased
usage by and continued growth in the number of retail customers reflecting
the addition of 10,755 customers. Energy sales to residential customers,
which is the most weather-sensitive customer class, rose almost 8% in 1995
mainly as a result of increased usage in the last half of the year
reflecting unseasonably warm summer weather in 1995 and colder weather in
the fourth quarter of 1995 as compared to the prior year s fourth quarter. 
Sales to commercial customers rose 4% reflecting the effects of weather, an
expanding economy and additional customers.

 Although revenues from wholesale customers declined in 1995, wholesale
energy sales increased by  more  than  4%  largely due  to increased  sales
made on an hourly basis by the AEP System Power Pool (Power Pool) to
unaffiliated utilities.  This type of short-term sale is typically made
when the unaffiliated utility can purchase energy at a lower cost than the
cost at which that utility can generate the energy.  Such sales usually
take place as a result of increased weather-related demand.  The increase
in 1995 wholesale energy sales occurred during the last six months of the
year when the summer weather was unseasonably warm and fall temperatures
were colder as compared with the prior year.  Although wholesale energy
sales increased, wholesale revenues declined in 1995 reflecting the impact
of increasing competition on pricing.

Operating Expenses Increase

 Operating expenses increased $40.8 million or 4.8% in 1995.  Changes in
the components of operating expenses were as follows:

                                  Increase (Decrease)
(dollars in millions)              From Previous Year
                                    Amount         % 

Fuel. . . . . . . . . . . . . . .   $(34.4)     (16.9)
Purchased Power . . . . . . . . .     33.0       24.5
Other Operation . . . . . . . . .     15.4        8.8
Maintenance . . . . . . . . . . .     (0.6)      (0.9)
Depreciation. . . . . . . . . . .      2.3        2.7
Amortization of Zimmer Plant 
  Phase-in Costs. . . . . . . . .      6.1       22.6
Taxes Other Than Federal 
  Income Taxes. . . . . . . . . .      7.0        6.8
Federal Income Taxes. . . . . . .     12.0       25.6
  Total Operating Expenses. . . .    $40.8        4.8

 The decrease in fuel expense was due to an 11% decrease in net generation
and the operation of the fuel clause adjustment mechanism as the
combination of the deferral of underrecovered fuel costs in 1995 and the
accrual of overrecovered fuel costs in 1994 reduced fuel expense.  Net
generation decreased as the Company increased power purchases from the
Power Pool in order to substitute less expensive nuclear energy available
from the Power Pool for internally generated energy.  The two nuclear units
of an affiliated Power Pool member company were out of service for
refueling and maintenance during portions of 1994 causing the Company to
increase generation in order to sell more power to the Power Pool to
replace the unavailable nuclear energy.  This accounts for the decease in
generation even though the Company s energy sales increased.

 Increased energy deliveries from the Power Pool and increased capacity
charges from the Power Pool accounted for the increase in purchased power
expense.  As a Power Pool member whose internal demand exceeds its
capacity, the Company pays capacity charges allocated to Power Pool members
based on their relative peak demands.  An increase in the Company s prior
twelve month peak demand relative to the total peak demand of all Power
Pool members caused the increase in Power Pool capacity charges.

 Other operation expenses increased due to a provision for severance pay
recorded related mainly to the AEP System s functional realignment of
operations; the effect of a favorable adjustment in 1994 due to a reduction
in the estimate for injuries and damages claims; and membership dues as a
result of the Company joining the Electric Power Research Institute.

 The increase in amortization of Zimmer Plant phase-in costs, which is
based on a rate per kilowatthour sold, reflects the rise in kilowatthour
sales and a full year of amortization in 1995 compared with a partial year
of amortization in 1994, the year deferrals began.

 Taxes other than federal income taxes rose as a result of increased
property taxes reflecting higher tax rates and tax bases and increased
gross receipts taxes reflecting increased revenues.

 Federal income tax expense attributable to operations increased primarily
due to the increase in pre-tax operating income and the effects of
favorable accrual adjustments recorded in 1994 in connection with the
resolution of the audits of prior years  tax returns.

 The retirement of long-term debt early in the second quarter and no
issuance of new debt until late in the third quarter caused the decline in
interest charges.
<PAGE>
INDEPENDENT AUDITORS' REPORT


To the Shareholders and Board of
Directors of Columbus Southern
Power Company:

We have audited the accompanying consolidated balance sheets of Columbus
Southern Power Company and its subsidiaries as of December 31, 1995 and
1994, and the related consolidated statements of income, retained earnings,
and cash flows for each of the three years in the period ended December 31,
1995.  These financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Columbus Southern Power
Company and its subsidiaries as of December 31, 1995 and 1994, and the
results of their operations and their cash flows for each of the three
years in the period ended December 31, 1995 in conformity with generally
accepted accounting principles.



DELOITTE & TOUCHE LLP
Columbus, Ohio
February 27, 1996
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Income
                                                                                         Year Ended December 31, 
                                                                              1995                1994                1993 
                                                                                             (in thousands)
<S>                                                                         <C>                 <C>                   <C>
OPERATING REVENUES                                                          $1,071,862          $1,031,151            $953,652 

OPERATING EXPENSES:
   Fuel                                                                        169,791             204,210             186,761 
   Purchased Power                                                             167,517             134,540             159,979 
   Other Operation                                                             190,542             175,102             170,397 
   Maintenance                                                                  71,022              71,629              71,537 
   Depreciation                                                                 85,448              83,180              84,883 
   Amortization (Deferral) of Zimmer Plant Phase-in Costs                       33,268              27,144              (8,913)
   Taxes Other Than Federal Income Taxes                                       109,680             102,672              99,348 
   Federal Income Taxes                                                         58,786              46,806              39,444 
          TOTAL OPERATING EXPENSES                                             886,054             845,283             803,436 

OPERATING INCOME                                                               185,808             185,868             150,216 

NONOPERATING INCOME:
  Deferred Zimmer Plant Carrying
    Charges (net of tax)                                                         3,089               5,604              25,343 
  Other                                                                          2,113               1,426               2,000 
          TOTAL NONOPERATING INCOME                                              5,202               7,030              27,343 
Loss From Zimmer Plant Disallowance:
  Disallowed Cost                                                              -                    -                  159,067 
  Related Income Taxes                                                         -                    -                  (14,534)
          NET ZIMMER LOSS                                                      -                    -                  144,533 

INCOME BEFORE INTEREST CHARGES                                                 191,010             192,898              33,026 

INTEREST CHARGES                                                                80,394              83,053              88,924 

NET INCOME (LOSS)                                                              110,616             109,845             (55,898)
                                                                                                                               
PREFERRED STOCK DIVIDEND REQUIREMENTS                                           11,907              12,084              11,062 

EARNINGS (LOSS) APPLICABLE TO COMMON STOCK                                 $    98,709         $    97,761           $ (66,960)
</TABLE>
See Notes to Consolidated Financial Statements.<PAGE>
<TABLE>
<CAPTION>
Consolidated Balance Sheets
                                                                     December 31,      
                                                                 1995            1994     
                                                                    (in thousands)
ASSETS
<S>                                                             <C>           <C>
ELECTRIC UTILITY PLANT:
   Production                                                   $1,481,309     $1,461,484 
   Transmission                                                    314,413        306,744 
   Distribution                                                    843,228        797,570 
   General                                                         117,185        111,623 
   Construction Work in Progress                                    64,073         52,156 

                 Total Electric Utility Plant                    2,820,208      2,729,577 

   Accumulated Depreciation                                        953,170        884,237 

                 NET ELECTRIC UTILITY PLANT                      1,867,038      1,845,340 

OTHER PROPERTY AND INVESTMENTS                                      25,950         26,744 

CURRENT ASSETS:
   Cash and Cash Equivalents                                       10,577          14,065 
   Accounts Receivable:
      Customers                                                    52,390          41,056 
      Affiliated Companies                                          4,465           4,624 
      Miscellaneous                                                10,059          10,025 
      Allowance for Uncollectible Accounts                         (1,061)         (1,768)
   Fuel - at average cost                                          24,316          28,060 
   Materials and Supplies - at average cost                        23,519          24,923 
   Accrued Utility Revenues                                        40,389          31,595 
   Prepayments                                                     32,116          31,241 
                 TOTAL CURRENT ASSETS                             196,770         183,821 

REGULATORY ASSETS                                                 438,005         475,019 

DEFERRED CHARGES                                                   66,363                 
                                                                                  63,418 
                     TOTAL                                     $2,594,126      $2,594,342 
</TABLE>
See Notes to Consolidated Financial Statements.<PAGE>
<TABLE>
<CAPTION>
                                                                     December 31,      
                                                                 1995            1994     
                                                                    (in thousands)
CAPITALIZATION AND LIABILITIES
<S>                                                          <C>            <C>
CAPITALIZATION:
   Common Stock - No Par Value:
      Authorized - 24,000,000 Shares
      Outstanding - 16,410,426 Shares                         $    41,026    $     41,026 
   Paid-in Capital                                                574,427         565,642 
   Retained Earnings                                               74,320          46,976 
                Total Common Shareholder's Equity                 689,773         653,644 
   Cumulative Preferred Stock -
       Subject to Mandatory Redemption                             75,000         150,000 
   Long-term Debt                                                 990,796         917,608 

                TOTAL CAPITALIZATION                            1,755,569       1,721,252 

OTHER NONCURRENT LIABILITIES                                       34,571          38,913 

CURRENT LIABILITIES:                                                                      
   Preferred Stock Due Within One Year                             7,500          -       
   Long-term Debt Due Within One Year                             -                80,000 
   Short-term Debt                                                 34,325          -      
   Accounts Payable - General                                      31,276          34,934 
   Accounts Payable - Affiliated Companies                         20,753          14,057 
   Taxes Accrued                                                  120,093         113,362 
   Interest Accrued                                                17,016          18,923 
   Other                                                           30,955          24,469 

                TOTAL CURRENT LIABILITIES                         261,918         285,745 

DEFERRED INCOME TAXES                                             464,413         467,593 

DEFERRED INVESTMENT TAX CREDITS                                    61,010          64,597 

DEFERRED CREDITS                                                   16,645          16,242 

COMMITMENTS AND CONTINGENCIES (Note 3)

                    TOTAL                                      $2,594,126      $2,594,342 <PAGE>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
                                                                                      Year Ended December 31, 
                                                                            1995               1994               1993  
                                                                                          (in thousands)
   <S>                                                                    <C>                <C>                <C>         
   OPERATING ACTIVITIES:
      Net Income (Loss)                                                   $ 110,616           $ 109,845          $ (55,898)
      Adjustments for Noncash Items:                                                                    
         Depreciation                                                        85,071              82,795             84,462 
         Deferred Federal Income Taxes                                        2,914              (2,132)            10,167 
         Deferred Investment Tax Credits                                     (3,483)             (3,929)            (5,471)
         Deferred Fuel Costs (net)                                          (11,377)              2,247              3,659 
         Deferred Zimmer Plant Operating Expenses and
           Carrying Charges                                                  29,150              19,156            (46,475)
         Loss from Zimmer Plant Disallowance                                -                   -                  159,067 
      Changes in Certain Currrent Assets and Liabilities:                            
         Accounts Receivable (net)                                          (11,916)             (2,840)            (8,030)
         Fuel, Materials and Supplies                                         5,148               5,046              1,428 
         Accrued Utility Revenues                                            (8,794)             (2,706)           (12,599)
         Accounts Payable                                                     3,038              (1,556)             3,336 
      Other (net)                                                             6,212             (11,382)               886 
                 Net Cash Flows From Operating Activities                   206,579             194,544            134,532 
             
   INVESTING ACTIVITIES:
      Construction Expenditures                                             (98,356)            (80,973)           (88,605)
      Proceeds from Sale and Leaseback
        Transactions and Other                                                2,923               2,606              2,659 
                  Net Cash Flows Used For Investing Activities              (95,433)            (78,367)           (85,946)
             
    FINANCING ACTIVITIES:
      Capital Contributions from Parent Company                              15,000              -                  -      
      Issuance of Cumulative Preferred Stock                                -                    24,596             -      
      Issuance of Long-term Debt                                             72,526             198,298            197,722 
      Retirement of Preferred Stock                                         (71,773)            -                  -       
      Retirement of Long-term Debt                                          (80,000)           (225,834)          (166,166)
      Change in Short-term Debt (net)                                        34,325             (25,225)           (28,594)
      Dividends Paid on Common Stock                                        (71,900)            (68,788)           (42,175)
      Dividends Paid on Cumulative Preferred Stock                          (12,812)            (11,792)           (11,062)
                  Net Cash Flows Used For Financing Activities             (114,634)           (108,745)           (50,275)
   Net Increase (Decrease) in Cash and Cash Equivalents                      (3,488)              7,432             (1,689)
   Cash and Cash Equivalents January 1                                       14,065               6,633              8,322 
   Cash and Cash Equivalents December 31                                 $   10,577          $   14,065         $    6,633 
</TABLE>   
   
   See Notes to Consolidated Financial Statements.<PAGE>
<TABLE>                                                    
<CAPTION>
Consolidated Statements of Retained Earnings
                                                                                          Year Ended December 31,
                                                                               1995                 1994                1993    
                                                                                              (in thousands)  
<S>                                                                          <C>                 <C>                  <C>
Retained Earnings January 1                                                  $  46,976           $  18,288            $127,562 

Net Income (Loss)                                                              110,616             109,845             (55,898)
                                                                               157,592             128,133              71,664 
Deductions:
Cash Dividends Declared:
   Common Stock                                                                 71,900              68,788              42,175 
   Cumulative Preferred Stock:
      7% Series                                                                  1,750               1,167                -    
      7-7/8% Series                                                              3,937               3,938               3,937 
      9.50%  Series                                                              5,522               7,125               7,125 
                Total Cash Dividends Declared                                   83,109              81,018              53,237 

Capital Stock Expense                                                              163                 139                 139 
                Total Deductions                                                83,272              81,157              53,376 
Retained Earnings December 31                                                $  74,320            $ 46,976            $ 18,288 

</TABLE>

See Notes to Consolidated Financial Statements.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES:

Organization

   Columbus Southern Power Company (the Company or CSPCo) is a wholly-owned
subsidiary of American Electric Power Company, Inc. (AEP Co., Inc.), a
public utility holding company.  The Company is engaged in the generation,
purchase, transmission and distribution of electric power serving 599,000
retail customers in central and southern Ohio.  Wholesale electric power is
supplied to neighboring utility systems.  As a member of the American
Electric Power (AEP) System Power Pool (Power Pool) and a signatory company
to the AEP Transmission Equalization Agreement, CSPCo's facilities are
operated in conjunction with the facilities of certain other AEP affiliated
utilities as an integrated utility system.

   The Company's three wholly-owned subsidiaries, which are consolidated in
these financial statements, are: Conesville Coal Preparation Company (CCPC)
which provides coal washing services for one of the Company's generating
stations; Simco Inc. which is engaged in leasing a coal conveyor system to
CCPC; and Colomet, Inc. which is engaged in real estate activities for its
parent.

Regulation

   As a subsidiary of AEP Co., Inc., CSPCo is subject to the regulation of
the Securities and Exchange Commission (SEC) under the Public Utility
Holding Company Act of 1935 (1935 Act).  Retail rates are regulated by the
Public Utilities Commission of Ohio (PUCO).  The Federal Energy Regulatory
Commission (FERC) regulates wholesale rates.

Principles of Consolidation

   The consolidated financial statements include CSPCo and its wholly-owned
subsidiaries.  Significant intercompany items are eliminated in consol-
idation.

Basis of Accounting

   As a cost-based rate-regulated entity, CSPCo's financial statements
reflect the actions of regulators that result in the recognition of
revenues and expenses in different time periods than enterprises 


that  are not rate regulated.  In accordance with Statement of Financial
Accounting Standards (SFAS) No. 71,  Accounting for the Effects of Certain
Types of Regulation,  regulatory assets and liabilities are recorded to
reflect the economic effects of regulation.

Use of Estimates

 The preparation of these  financial statements in conformity with
generally accepted accounting principles requires in certain instances the
use of management s estimates.  Actual results could differ from those
estimates.

Utility Plant

 Electric utility plant is stated at original cost and is generally
subject to first mortgage liens.  Additions, major replacements and
betterments are added to the plant accounts.  Retirements from the plant
accounts and associated removal costs, net of salvage, are deducted from
accumulated depreciation.

 The costs of labor, materials and overheads incurred to operate and
maintain utility plant are included in operating expenses.

Allowance for Funds Used During Construction (AFUDC)

 AFUDC is a noncash nonoperating income item that is recovered with
regulator approval over the service life of utility plant through
depreciation and represents the estimated cost of borrowed and equity funds
used to finance construction projects.  The amounts of AFUDC in 1995, 1994
and 1993 were not significant.

Depreciation

 Depreciation is provided on a straight line basis over the estimated
useful lives of utility plant and is calculated largely through the use of
composite rates by functional class as follows:

Functional Class                           Composite
of Property                               Annual Rates

Production                                     3.2%
Transmission                                   2.3%
Distribution                                   3.7%
General                                        3.6%

 Amounts to be used for removal of plant are recovered through
depreciation charges included in rates.

Cash and Cash Equivalents

 Cash and cash equivalents include temporary cash investments with
original maturities of three months or less.

Sale of Receivables

 Under an agreement that expires in 2000, CSPCo can sell up to $50 million
of undivided interests in designated pools of accounts receivable and ac-
crued utility revenues with limited recourse.  As collections reduce
previously sold pools, interests in new pools are sold.  At December 31,
1995 and 1994, $50 million remained to be collected and remitted to the
buyer.

Operating Revenues

 Revenues include the accrual of electricity consumed but unbilled at
month-end as well as billed revenues.

Fuel Costs

 Changes in retail jurisdictional fuel cost are deferred until reflected
in revenues in later months through a PUCO fuel cost recovery mechanism. 
Wholesale jurisdictional fuel cost changes are expensed and billed as
incurred.

Income Taxes

 The Company follows the liability method of accounting for income taxes
as prescribed by SFAS 109,  Accounting for Income Taxes.   Under the
liability method, deferred income taxes are provided for all temporary
differences between book cost and tax basis of assets and liabilities which
will result in a future tax consequence.  Where the flow-through method of
accounting for temporary differences is reflected in rates, regulatory
assets and liabilities are recorded in accordance with SFAS 71.

Investment Tax Credits

 The Company's policy was to account for investment tax credits under the
flow-through method except where regulatory commissions reflected
investment tax credits in the rate-making process on a deferral basis. 
Commensurate with rate treatment deferred investment tax credits are being
amortized over the life of the related plant investment.

Debt and Preferred Stock

 Gains and losses on reacquired debt are deferred and amortized over the
remaining term of the reacquired debt in accordance with rate-making
treatment.  If the debt is refinanced the reacquisition costs are deferred
and amortized over the term of the replacement debt commensurate with their
recovery in rates.

 Debt discount or premium and debt issuance expenses are amortized over
the term of the related debt, with the amortization included in interest
charges.

 Redemption premiums paid to reacquire preferred stock are deferred,
debited to paid-in capital and amortized to retained earnings in accordance
with rate-making treatment.

Other Property and Investments

 Other property and investments are stated at cost.

Reclassifications

 Certain prior-period amounts were reclassified to conform with current-
period presentation.

<PAGE>
2. EFFECTS OF REGULATION AND THE ZIMMER  
    PHASE-IN PLAN:

 The consolidated financial statements include assets and liabilities
recorded in accordance with regulatory actions in order to match expenses
with related revenues included in cost-based regulated rates.  The assets
are expected to be recovered in future periods through the rate-making
process and the liabilities are expected to reduce future cost recoveries. 
The Company has reviewed all the evidence currently available and concluded
that it continues to meet the requirements to apply SFAS 71.  In the event
a portion of the Company s business no longer met these requirements
regulatory assets and liabilities would have to be written off for that
portion of the business.

 Regulatory assets and liabilities are comprised of the following:
                                      December 31,   
                                     1995       1994
                                      (in thousands)
Regulatory Assets:
  Amounts Due From Customers For
    Future Income Taxes            $279,984   $286,079
  Zimmer Plant Phase-in Plan
    Deferrals                        46,887     75,394
  Deferred Zimmer Plant
    Carrying Charges                 43,003     43,003
  Unamortized Loss On
    Reacquired Debt                  31,025     34,839
  Other*                             37,106     35,704
  Total Regulatory Assets          $438,005   $475,019

Regulatory Liabilities:
  Deferred Investment Tax Credits   $61,010    $64,597
  Other*                             12,351     13,123
  Total Regulatory Liabilities      $73,361    $77,720

* Included in Deferred Credits on the Consolidated Balance Sheets.

 The Zimmer Plant is a 1,300 mw coal-fired plant which commenced
commercial operation in 1991.  CSPCo owns 25.4% of the plant with the
remainder owned by two unaffiliated companies.

 In May 1992 the PUCO issued an order providing for a phased-in rate
increase of $123 million for the new Zimmer Plant to be implemented in
three steps over a two-year period and disallowed $165 million of Zimmer
Plant investment.  CSPCo appealed the PUCO ordered Zimmer disallowance and
phase-in plan to the Ohio Supreme Court.  In November 1993 the Supreme
Court issued a decision on CSPCo's appeal affirming the disallowance and
finding that the PUCO did not have statutory authority to order phased-in
rates.  The Court instructed the PUCO to fix rates to provide gross annual
revenues in accordance with the law and to provide a mechanism to recover
the revenues deferred under the phase-in order.

 As a result of the ruling, 1993 net income was reduced by $144.5 million
after tax to reflect the disallowance and in January 1994, the PUCO
approved a 7.11% rate increase effective February 1, 1994.  The increase is
comprised of a 3.72% base rate increase to complete the rate increase
phase-in and a temporary 3.39% surcharge, which will be in effect until the
deferred revenues are recovered, estimated to be 1998.  In 1995 and 1994,
$28.5 and  $18.5 million, respectively, of net phase-in deferrals were
collected through the surcharge  which reduced the deferrals from $93.9
million at December 31, 1993 to $75.4 million at December 31, 1994 and
$46.9 million at December 31, 1995.  In 1993 and 1992, $47.9 million and
$46 million, respectively, were deferred under the phase-in plan.  The
recovery of amounts deferred under the phase-in plan and the increase in
rates to the full rate level did not affect net income.

 From the in-service date of March 1991 until rates went into effect in
May 1992 deferred carrying charges of $43 million were recorded on the
Zimmer Plant investment.  Recovery of the deferred carrying charges will be
sought in the next PUCO base rate proceeding in accordance with the PUCO
accounting order that authorized the deferral.


3. COMMITMENTS AND CONTINGENCIES:

Construction and Other Commitments

 Substantial construction commitments have been made.  Such commitments do
not include any expenditures for new generating capacity.  The aggregate
construction program expenditures for 1996-1998 are estimated to be $286
million.

 Long-term fuel supply contracts contain clauses that provide for periodic
price adjustments.  The PUCO has a fuel clause mechanism that provides for
deferral and subsequent recovery or refund of changes in the cost of fuel
with commission review and approval.  The contracts are for various terms,
the longest of which extends to 2011, and contain various clauses that
would release the Company from its obligation under certain force majeure
conditions.

Clean Air

 The Clean Air Act Amendments of 1990 (CAAA) require significant
reductions in sulfur dioxide and nitrogen oxide emissions from various AEP
System generating plants.  The first phase of reductions in sulfur dioxide
emissions (Phase I) began in 1995 and the second, more restrictive phase
(Phase II) begins in the year 2000.  The law also established a permanent
nationwide cap on sulfur dioxide emissions after 1999.  Several of the
Company s generating units are affected by Phase I.  Also a portion of
Phase I compliance costs of other AEP affiliates is included in AEP System
Power Pool costs (which are described in Note 4) and charged to the
Company.  These costs are not expected to have an adverse impact on results
of operations.

Litigation

 The Company is involved in a number of legal proceedings and claims. 
While management is unable to predict the outcome of litigation, it is not
expected that the resolution of these matters will have a material adverse
effect on the results of operations or financial condition.


4. RELATED PARTY TRANSACTIONS:

 Benefits and costs of the System's generating plants are shared by
members of the Power Pool.  Under the terms of the System Interconnection
Agreement, capacity charges and credits are designed to allocate the cost
of the System's capacity among the Power Pool members based on their
relative peak demands and generating reserves.  Power Pool members are also
compensated for the out-of-pocket costs of energy delivered to the Power
Pool and charged for energy received from the Power Pool.

 Operating revenues include $14.8 million in 1995, $15.8 million in 1994
and $12.5 million in 1993 for energy supplied to the Power Pool.

 Charges for Power Pool capacity reservation and energy received were
included in purchased power expense as follows:
                           Year Ended December 31,    
                          1995        1994       1993
                                 (in thousands)

Capacity Charges        $ 83,318    $ 74,936  $ 85,450
Energy Charges            74,100      46,164    68,277

     Total              $157,418    $121,100  $153,727

 Power Pool members share in wholesale sales to unaffiliated utilities
made by the Power Pool.  The Company's share of the Power Pool's wholesale
sales included in operating revenues were $45.8 million in 1995, $48.7
million in 1994 and $49.3 million in 1993.

 In addition, the Power Pool purchases power from unaffiliated companies
for immediate resale to other unaffiliated utilities.  The Company's share
of these purchases was included in purchased power expense and totaled $10
million in 1995, $13.4 million in 1994 and $6.2 million in 1993.  Revenues
from these transactions including a transmission fee are included in the
above Power Pool wholesale operating revenues.

 AEP System companies participate in a transmission equalization agree-
ment.  This agreement combines certain AEP System companies' investments in
transmission facilities and shares the costs of ownership in proportion to
the System companies' respective peak demands.  Pursuant to the terms of
the agreement, other operation expense includes equalization charges of
$31.1 million, $30.1 million and $31.2 million in 1995, 1994 and 1993,
respectively.

 American Electric Power Service Corporation (AEPSC) provides certain
managerial and professional services to AEP System companies.  The costs of
the services are billed by AEPSC on a direct-charge basis to the extent
practicable and on reasonable bases of proration for indirect costs.  The
charges for services are made at cost and include no compensation for the
use of equity capital, which is furnished to AEPSC by AEP Co., Inc. 
Billings from AEPSC are capitalized or expensed depending on the nature of
the services rendered.  AEPSC and its billings are subject to the
regulation of the SEC under the 1935 Act. <PAGE>

5. BENEFIT PLANS:

 The Company and its subsidiaries participate in the AEP System pension
plan, a trusteed, noncontributory defined benefit plan covering all employ-
ees meeting eligibility requirements.  Benefits are based on service years
and compensation levels.  Pension costs are allocated by first charging
each System company with its service cost and then allocating the remaining
pension cost in proportion to its share of the projected benefit
obligation.  The funding policy is to make annual trust fund contributions
equal to the net periodic pension cost up to the maximum amount deductible
for federal income taxes, but not less than the minimum required
contribution in accordance with the Employee Retirement Income Security Act
of 1974.

 Net pension costs for the years ended December 31, 1995, 1994 and 1993
were $0.8 million, $2.2 million and $2.5 million, respectively.

 An employee savings plan is offered which allows participants to
contribute up to 17% of their salaries into various investment
alternatives, including AEP Co., Inc. common stock.  An employer matching
contribution, equaling one-half of the employees' contribution to the plan
up to a maximum of 3% of the employees' base salary, is invested in AEP
Co.,  Inc. common stock and totaled $2.1 million in both 1995 and 1994 and
$1.9 million in 1993.

 Postretirement benefits other than pensions (OPEB) are provided for
retired employees under an AEP System plan.  Substantially all employees
are eligible for health care and life insurance if they have at least 10
service years and are age 55 or older when employment terminates.

 SFAS 106,  Employers' Accounting for Postretirement Benefits Other Than
Pensions,  was adopted in January 1993 for the Company's aggregate
liability for OPEB.  SFAS 106 requires the accrual during the employee's
service years of the present value liability for OPEB costs.  Costs for the
accumulated postretirement benefits earned and not recognized at adoption
are being recognized, in accordance with SFAS 106, as a transition obliga-
tion over 20 years.  OPEB costs are determined by the application of AEP
System actuarial assumptions to each operating company's employee
complement.  The annual accrued costs for employees and retirees OPEBs
required by SFAS 106, which includes the recognition of one-twentieth of
the prior service transition obligation, are being expensed as incurred and
were $11.3 million in 1995, $10.4 million in 1994 and $9.7 million in 1993.

 As a result of SFAS 106, a Voluntary Employees Beneficiary Association
(VEBA) trust fund for OPEB benefits was established and a corporate owned
life insurance (COLI) program was implemented to lower the net OPEB costs. 
The insurance policies have a substantial cash surrender value which is
recorded, net of equally substantial policy loans, in other property and
investments.  Legislation was passed by Congress which would have
significantly reduced the tax benefits of a COLI program in the future. 
The legislation containing this provision was vetoed by the President.  At
this time it is uncertain if legislation repealing certain tax benefits for
COLI programs will be enacted.  If enacted this legislation would
negatively impact the effectiveness of the COLI program as a funding and
cost reduction mechanism.  In 1995 the Company contributed $14.3 million to
the VEBA trust fund, an amount equal to the difference between the pay-as-
you-go OPEB cost and SFAS 106 total OPEB cost for 1995 and 1994.  This
contribution was funded by amounts collected from ratepayers plus net
earnings from the COLI program.<PAGE>

6. COMMON OWNERSHIP OF GENERATING AND TRANSMISSION FACILITIES:

   The Company jointly owns, as tenants in common, four generating units
and transmission facilities with two unaffiliated companies.  Each of the
participating companies is obligated to pay its share of the costs of any
such jointly owned facilities in the same proportion as its ownership
interest.  The Company's proportionate share of the operating costs
associated with such facilities is included in the Consolidated Statements
of Income and the amounts reflected in the accompanying Consolidated
Balance Sheets under utility plant include such costs as follows:

<TABLE>
<CAPTION>

                                                                              Company's Share
                                                                                December 31,                     
                                                                      1995                        1994           
                                                 Percent      Utility    Construction     Utility    Construction
                                                   of          Plant         Work          Plant         Work
                                                Ownership   in Service   in Progress    in Service   in Progress  
                                                                              (in thousands)
<S>                                                <C>        <C>           <C>           <C>           <C> 
Production:                                     
  W.C. Beckjord Generating Station (Unit No. 6)    12.5       $ 13,876      $   13        $ 12,625      $1,137
  Conesville Generating Station (Unit No. 4)       43.5         78,193         555          78,831         420
  J.M. Stuart Generating Station                   26.0        181,362       2,127         175,195       3,209
  Wm. H. Zimmer Generating Station                 25.4        696,661       2,403         695,990       1,797
                                                              $970,092      $5,098        $962,641      $6,563

Transmission                                        (a)       $ 59,208      $ -0-         $ 58,813      $  161

(a) Varying percentage of ownership.

   At December 31, 1995 and 1994, the accumulated depreciation with respect to
   the Company's share of jointly owned facilities amounted to $247.6 million
   and $218.2 million, respectively.
</TABLE>

7.  CUMULATIVE PREFERRED STOCK:

   At December 31, 1995, authorized shares of cumulative preferred stock
were as follows:
                            Par Value                     Shares Authorized
                              $100                           2,500,000
                                25                           7,000,000

   The cumulative preferred stock outstanding shown below is subject to
mandatory redemption and has an involuntary liquidation preference of par
value.
<TABLE>
<CAPTION>
              Call Price                                         Shares                             Amount         
              December 31,               Par                   Outstanding                       December 31,      
Series (a)        1995                  Value                December 31, 1995               1995            1994  
                                                                                                (in thousands)

<S>             <C>                     <C>                       <C>                      <C>             <C>
7%     (b)         (b)                  $100                      250,000                  $25,000         $ 25,000
7-7/8% (c)      $107.88                  100                      500,000                   50,000           50,000
9.50%              (d)                   100                       75,000                    7,500           75,000
                                                                                           $82,500         $150,000
</TABLE>
(a) The sinking fund provisions of the 7% and 7-7/8% series aggregate
$2,500,000, $2,500,000 and $7,500,000 in 1998,1999 and 2000, respectively.
(b) Shares issued June 1994.  Commencing in 2000, a sinking fund will
require the redemption of 50,000 shares at $100 a share on or before August
1 of each year.  The Company has the right, on each sinking fund date, to
redeem an additional 50,000 shares.  Redemption of this series is
prohibited prior to August 1, 2000.
(c) Commencing in 1998, a sinking fund will require the redemption of
25,000 shares at $100 a share on or before May 1 of each year.  The Company
has the right, on each sinking fund date, to redeem an additional 25,000
shares. Redemption of this series is restricted prior to March 1, 1997.
(d)On November 1, 1995, 675,000 shares of the 9.50% Cumulative Preferred
Stock were redeemed at $106.33 per share. The remaining 75,000 shares were
redeemed on February 1, 1996 at $100.00 per share.<PAGE>

8. FEDERAL INCOME TAXES:

 The details of federal income taxes as reported are as follows:
<TABLE>
<CAPTION> 
 
                                                                             Year Ended December 31,                 
                                                                1995                  1994                  1993
                                                                                 (in thousands)
<S>                                                           <C>                   <C>                   <C>
Charged (Credited) to Operating Expenses (net):
  Current                                                     $60,091                $56,424              $ 34,235
  Deferred                                                      2,028                 (5,916)                8,935
  Deferred Investment Tax Credits                              (3,333)                (3,702)               (3,726)
        Total                                                  58,786                 46,806                39,444 
Charged (Credited) to Nonoperating Income (net):
  Current                                                        (874)                  (525)               (4,777)
  Deferred                                                        886                  3,784                14,559
  Deferred Investment Tax Credits                                (150)                  (227)                 (538)
        Total                                                    (138)                 3,032                 9,244
Credited to Loss from Zimmer Disallowance (net):
  Deferred                                                       -                      -                  (13,327)
  Deferred Investment Tax Credits                                -                      -                   (1,207)
        Total                                                    -                      -                  (14,534)

Total Federal Income Taxes as Reported                        $58,648                $49,838              $ 34,154 
</TABLE>
 The following is a reconciliation of the difference between the amount of
federal income taxes computed by multiplying book income before federal
income taxes by the statutory tax rate, and the amount of federal income
taxes reported.
<TABLE>
<CAPTION>
                                                                            Year Ended December 31,                 
                                                                1995                  1994                  1993
                                                                                 (in thousands)
<S>                                                           <C>                   <C>                   <C>
Net Income (Loss)                                             $110,616              $109,845              $(55,898)
Federal Income Taxes                                            58,648                49,838                34,154 
Pre-tax Book Income (Loss)                                    $169,264              $159,683              $(21,744)

Federal Income Taxes on Pre-tax Book Income (Loss) at 
  Statutory Rate (35%)                                         $59,242               $55,889               $(7,610)
Increase (Decrease) in Federal Income Taxes
  Resulting From the Following Items:
    Deferred Zimmer Plant Carrying Charges                           3                     3                   928 
    Corporate Owned Life Insurance                              (2,882)               (2,787)               (3,351)
    Depreciation                                                 7,959                 7,335                 8,604
    Zimmer Plant Disallowance                                     -                     -                   42,346
    Prior Year Federal Income Tax Accrual Adjustments             -                   (3,300)                 -
    Amortization/Reversal of Deferred Investment 
      Tax Credits (net)                                         (3,848)               (3,929)               (5,468)
    Other                                                       (1,826)               (3,373)               (1,295)
Total Federal Income Taxes as Reported                         $58,648               $49,838               $34,154 

Effective Federal Income Tax Rate                                 34.6%                 31.2%                   N/A<PAGE>
</TABLE>
                                                                       

 The following tables show the elements of the net deferred tax liability
and the significant temporary differences that gave rise to it:
                                      December 31,     
                                   1995         1994
                                    (in thousands)

Deferred Tax Assets             $  69,503   $  74,752
Deferred Tax Liabilities         (533,916)   (542,345)
  Net Deferred Tax Liabilities  $(464,413)  $(467,593)

Property Related Temporary
  Differences                   $(337,349)  $(330,434)
Amounts Due From Customers For
  Future Federal Income Taxes     (97,973)   (100,128)
All Other (net)                   (29,091)    (37,031)
    Total Net Deferred
      Tax Liabilities           $(464,413)  $(467,593)

 The Company and its subsidiaries join in the filing of a consolidated
federal income tax return with their affiliates in the AEP System.  The
allocation of the AEP System's current consolidated federal income tax to
the System companies is in accordance with SEC rules under the 1935 Act. 
These rules permit the allocation of the benefit of current tax losses to
the System companies giving rise to them in determining their current tax
expense.  The tax loss of the System parent company, AEP Co., Inc., is
allocated to its subsidiaries with taxable income.  With the exception of
the loss of the parent company, the method of allocation approximates a
separate return result for each company in the consolidated group.

 The AEP System has settled with the Internal Revenue Service (IRS) all
issues from the audits of the consolidated federal income tax returns for
the years prior to 1991.  Returns for the years 1991 through 1993 are
presently being audited by the IRS.  In the opinion of management, the
final settlement of open years will not have a material effect on results
of operations.


9. SUPPLEMENTARY INFORMATION:

                             Year Ended December 31,   
                             1995      1994      1993
                                 (in thousands)
Cash was paid for:
  Interest (net of
    capitalized amounts)   $78,046   $83,251  $88,141
  Income Taxes              57,896    59,218   35,514

Noncash Acquisitions under
 Capital Leases were         9,094    14,899    8,672

<PAGE>
10.  LEASES:

 Leases of property, plant and equipment are for periods  of up to 31
years and require payments of related property taxes, maintenance and
operating costs.  The majority of the leases have purchase or renewal
options and will be renewed or replaced by other leases.

 Lease rentals are generally charged to operating expenses in accordance
with rate-making treatment.  The components of rental costs are as follows:
                             
                             Year Ended December 31,   
                             1995      1994      1993
                                 (in thousands)

Operating Leases           $ 7,684   $ 7,850   $ 8,873
Amortization of Capital
 Leases                      4,971     4,050     3,032 
Interest on Capital Leases   1,547     1,092       763 
  Total Rental Costs       $14,202   $12,992   $12,668 

 Properties under capital leases and related obligations recorded on the
Consolidated Balance Sheets are as follows:
                             
                                      December 31,     
                                  1995           1994
                                    (in thousands)

Electric Utility Plant:
 Production                      $ 1,952        $ 1,952
 General                          38,632         33,419
   Total Electric Utility Plant   40,584         35,371
 Other Property                    1,838          1,167
   Total Properties               42,422         36,538
 Accumulated Amortization         14,606         12,086
     Net Properties under 
        Capital Leases           $27,816        $24,452

Obligations under Capital Leases:
 Noncurrent Liability            $22,981        $19,562
 Liability Due Within One Year     4,835          4,890
    Total Capital Lease 
      Obligations                $27,816        $24,452 

 Capital lease obligations are included in other noncurrent and other
current liabilities.<PAGE>

 Properties under operating leases and related obligations are not
included in the Consolidated Balance Sheets.

 Future minimum lease payments consisted of the following at December 31,
1995:
                                                                 Non-      
                                                               cancelable  
                                                  Capital       Operating  
                                                  Leases        Leases     
                                                     (in thousands)        

 1996                                                  $ 6,304    $ 5,887  
 1997                                                    5,419      5,624  
 1998                                                    4,555      5,392  
 1999                                                    3,972      5,045  
 2000                                                    3,341      4,837  
 Later Years                                             9,981     11,525  
 Total Future Minimum Lease                                                
      Payments                                          33,572    $38,310  
 Less Estimated Interest Element                         5,756             
 Estimated Present Value of
      Future Minimum Lease Payments                    $27,816             


11. COMMON SHAREHOLDER'S EQUITY:

 The Company received from AEP Co., Inc. a cash capital contribution of
$15 million in 1995 which was credited to paid-in capital.  In 1995 and
1994 net charges to paid-in capital of $6,215,000 and $404,000,
respectively, represented expenses of issuing and retiring cumulative
preferred stock.  There were no other material transactions affecting the
common stock and paid-in capital accounts in 1995, 1994 and 1993.  At
December 31, 1995 retained earnings was $74.3 million with no dividend
restrictions.

<PAGE>
12.  LONG-TERM DEBT AND LINES OF CREDIT:

 Long-term debt by major category was outstanding as follows:
                                     December 31,       
                                 1995            1994   
                                    (in thousands)      

First Mortgage Bonds           $827,167        $856,767 
Debentures                       72,734            -
Installment Purchase Contracts   90,895          90,841 
Notes Payable due 1995             -             50,000 
                                990,796         997,608 
Less Portion Due Within 
  One Year                         -             80,000 
  Total                        $990,796        $917,608 

 First mortgage bonds outstanding were as follows:

                                     December 31,      
                                 1995           1994   
                                   (in thousands)      
% Rate  Due                
8.95    1995 - December 20     $   -          $ 30,000 
6-1/4   1997 - October 1         14,640         14,640 
9.15    1998 - February 2        57,000         57,000 
7       1998 - June 1            24,750         24,750 
9.31    2001 - August 1          30,000         30,000 
7.95    2002 - July 1            40,000         40,000 
7.25    2002 - October 1         75,000         75,000 
7.15    2002 - November 1        20,000         20,000 
6.80    2003 - May 1             50,000         50,000 
6.60    2003 - August 1          40,000         40,000 
6.10    2003 - November 1        20,000         20,000 
6.55    2004 - March 1           50,000         50,000 
6.75    2004 - May 1             50,000         50,000 
9.625   2021 - June 1            50,000         50,000 
8.70    2022 - July 1            35,000         35,000 
8.40    2022 - August 1          15,000         15,000 
8.55    2022 - August 1          15,000         15,000 
8.40    2022 - August 15         40,000         40,000 
8.40    2022 - October 15        15,000         15,000 
7.90    2023 - May 1             50,000         50,000 
7.75    2023 - August 1          40,000         40,000 
7.45    2024 - March 1           50,000         50,000 
7.60    2024 - May 1             50,000         50,000 
Unamortized Discount (net)       (4,223)        (4,623)
                                827,167        856,767 
Less Portion Due Within 
  One year                         -            30,000 
  Total                        $827,167       $826,767 

 Certain indentures relating to the first mortgage bonds contain
improvement, maintenance and replacement provisions requiring the deposit
of cash or bonds with the trustee, or in lieu thereof, certification of
unfunded property additions.

 In September 1995 the Company issued $75 million of 8-3/8% Series A
Junior Subordinated Deferrable Interest Debentures due in 2025.
<PAGE>
 Installment purchase contracts have been entered into in connection with
the issuance of pollution control revenue bonds by the Ohio Air Quality
Development Authority as follows:

                                      December 31,      
                                   1995          1994                       
                 (in thousands)     
% Rate Due                   
                    
6-3/8  2020 - December 1          $48,550      $48,550 
6-1/4  2020 - December 1           43,695       43,695 
Unamortized Discount               (1,350)      (1,404)
  Total                           $90,895      $90,841

 Under the terms of the installment purchase contracts, the Company is
required to pay amounts sufficient to enable the payment of interest on and
the principal of related pollution control revenue bonds issued to finance
the Company's share of construction of pollution control facilities at the
Zimmer Plant.

 At December 31, 1995 annual long-term debt payments, excluding premium or
discount, are as follows:
                                  Principal Amount
                                   (in thousands) 

  1996                               $   -        
  1997                                 14,640  
  1998                                 81,750  
  1999                                   -     
  2000                                   -     
  Later Years                         902,245   
    Total                            $998,635   

 Short-term debt borrowings are limited by provisions of the 1935 Act to
$175 million.  Lines of credit are shared with AEP System companies  and 
at  December 31, 1995 and 1994 were available in the amounts of $372
million and $518 million, respectively.  Commitment fees of approximately
1/8 of 1% of the unused short-term lines of credit are paid each year to
the banks to maintain the lines of credit.  At December 31, 1995
outstanding short-term debt consisted of $13.1 million of notes payable and
$21.2 million of commercial paper with year-end weighted average interest
rates of 6% and 6.1%, respectively.


13. FAIR VALUE OF FINANCIAL INSTRUMENTS:

 The carrying amounts of cash and cash equivalents, accounts receivable,
short-term debt and accounts payable approximate fair value because of the
short-term maturity of these instruments.  At December 31, 1995 and 1994
fair values for preferred stock subject to mandatory redemption were $88.8
million and $153 million, and for long-term debt were $1,032 million and
$921 million, respectively.  The carrying amounts for preferred stock
subject to mandatory redemption were $82.5 million and $150 million, and
for long-term debt were $991 million and $998 million at December 31, 1995
and 1994, respectively.  Fair values are based on quoted market prices for
the same or similar issues and the current dividend or interest rates
offered for instruments of the same remaining maturities.


14. UNAUDITED QUARTERLY FINANCIAL INFORMATION:

Quarterly Periods  Operating  Operating      Net
     Ended          Revenues   Income      Income 

1995
 March 31           $257,005    $44,437    $25,525
 June 30             246,165     39,179     20,550
 September 30        310,141     66,542     47,132
 December 31         258,551     35,650     17,409 


Quarterly Periods  Operating  Operating       Net
     Ended          Revenues   Income       Income  

1994
 March 31           $255,829    $43,468    $24,652 
 June 30             256,754     44,523     25,242 
 September 30        280,470     61,597     42,528
 December 31         238,098     36,280     17,423 (a)

(a) Includes favorable federal income tax adjustments of
    $3.3 million related to the resolution of various issues
    with the IRS.