# 2008

Fact

Book

43 rd 

# EEI

Financial Financial

Conference Conference

Phoenix, AZ Phoenix, AZ

# 2 

# Table of Contents

Safe Harbor Statement & IR Contacts

Company Overview Tab 1

Operating Company Overview Tab 2

Organizational Structure

AEP East Regional Utilities

AEP West Regional Utilities



# Regulation Tab 3

Regulatory Strategy

Rate Case Filing Requirements

Regulatory Activity Underway

GridSMART Regulatory Status

Rate Base and ROE by Operating Company

Commission Overviews



# Generation & Environmental Tab 4

Units

Generation Statistics

New Generation

Environmental

Future Potential Green House Gas Regulations



# Coal Tab 5

Coal Procurement, Delivery & Transportation

Fuel Recovery

Coal Market Information



# Transmission Initiatives Tab 6

Financial Update Tab 7

Capitalization

Liquidity Position

Credit Ratings

Long-Term Debt Maturity Profile

Debt Schedules

# 3 This presentation contains forward-looking statements, which are subject to risks and uncertainties. These factors

include electric load and customer growth; weather condit ions, including storms; available sources and costs of, and

transportation for, fuels and performance of fuel suppliers and transporters; availability of generating capacity and

performance of 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; the ability to build or acquire generating capacity (including our ability to obtain any necessary regulatory

approvals and permits) when needed at acceptable prices an d terms and to recover those costs (including the costs of

projects that are cancelled) through applicable rate ca ses 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 resoluti on of pending and future rate cases, negotiations and

other regulatory decisions (including rate or other reco very of new investments in generation, distribution and

transmission service and environmental compliance); resoluti on of litigation (including disputes arising from the

bankruptcy of Enron Corp. and related matters); our ability to constrain operation and maintenance costs; the

economic climate and growth or contraction in our servic e territory and changes in market demand and demographic

patterns; inflationary and interest rate trends; volatility in the financial markets, particularly development affecting

the availability of capital on reasonable terms and develo pments impacting our ability to refinance existing debt at

attractive rates; our ability to develop and execute a strategy based on a view regarding prices of electricity, natural

gas coal, nuclear fuel and other energy related commoditie s; changes in the creditworthiness of the counterparties

with whom we have contractual arrangements, including part icipants 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 implementation of the recently-passed

utility law in Ohio and the allocation of costs within re gional transmission organizations; accounting pronouncements

periodically issued by accounting standard-setting bodies; th e impact of volatility in the capital markets on the value

of the investments held by our pension, other postretire ment benefit plans and nuclear decommissioning trust and the

impact on future funding requirements; prices for power we generate and sell at wholes ale; changes in technology,

particularly with respect to new, developing or alternat ive sources of generation; other risks and unforeseen events,

including wars, the effects of terrorism (including increase d security costs), embargoes and other catastrophic events;

and other factors discussed in the reports, including Forms 10-K and 10-Q, filed from time to time by the company

with the SEC.



# Investor Relations Contacts

Chuck Zebula

Treasurer

SVP Investor Relations

614-716-2801

cezebula@aep.com

Bette Jo Rozsa

Managing Director

Investor Relations

614-716-2840

bjrozsa@aep.com Julie Sherwood

Director

Investor Relations

614-716-2663

jasherwood@aep.com 

# “Safe Harbor” Statement under the Private

Securities Litigation Reform Act of 1995

Jana Croom

Analyst

Investor Relations

614-716-3175

jtcroom@aep.com**Operating Company Overview** **Regulation Generation &** **Environmental** 

# Company Overview**Coal**

# Company Overview

Fall EEI 2008

45Company OverviewAmerican Electric Power Company, Inc. is one of the largest investor-owned electric public utility holding companies in the US.Weprovide generation, transmission and distribution services to over 5 million retail customers in eleven states (Arkansas, Indiana,Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia) through our electric utility operatingcompanies.We have seven regional operating companies for distribution and customer service operationsthat serve the customers of our eleven electric utility subsidiaries:Regional Utility DivisionsTexas Central CompanyTexas North CompanyAppalachian PowerKingsport PowerIndiana Michigan PowerKentucky PowerPublic Service Company of OklahomaSouthwestern Electric Power Co.Columbus Southern PowerOhio PowerWheeling PowerAEP OhioAEP TexasAppalachian PowerIndiana Michigan PowerKentucky PowerPublic Service Company of OklahomaSouthwestern Electric Power Co.Electric Utility SubsidiariesOUR FOCUS IS OUR COREDOMESTIC UTILITY BUSINESS OPERATIONS6Company OverviewWe consume approximately 76 million tons of coal annually.Almost 39,000 megawatts of generating capacity in 3 RTOs (oneof the largest USgeneration portfolios with a significant cost advantage in manyof our market areas)Approximately 39,000 circuit miles of transmission lines, including 2,116 miles of765kV lines, the backbone of the electricinterconnection grid in the Eastern U.S.212,781 miles of overhead andunderground distribution linesOur US electric assets include:With our coal and transportation assets we:control over 9.000 railcarsown and/or operate over 2,900 hopper barges and 80 towboatsoperate one active coal-handling terminalwith 20 millions tons of capacitySIGNIFICANT PRESENCE THROUGHOUTTHE DOMESTIC VALUE CHAIN7Business StrategyAEP’s mission is to bring comfort to our customers, support business and commerce andbuild strong communities. Our strategy toachieveour mission is to grow our core utility business at a moderate and steady rate through major investment in our current utilitybusinesssupported and funded by innovative programs for regulatory recovery as well as develop our independent, federally regulated transmissioncompany for the pursuit of new major interstate projects. Our objective is to be an economical,reliable and safe provider ofelectricenergy to the markets that we serve. Our plan entails designing, building, improving and operating low cost, environmentally-compliant,efficient sources of power and maximizing the volumes of power delivered from these facilities. We intend to maintain and enhance ourposition as a safe and reliable provider of electric energy bymaking significant investmentsin environmental and reliabilityupgrades. Wewill seek to recover the cost of our new utility investments in a manner that resultsin reasonable rates for our customers while providing afair return for our shareholders through a stable stream of cash flows, enabling us to pay dependable, competitive dividends. We operateour generating assets to maximize our productivity andprofitability after meeting our native load requirements.Company StrategyContinue to invest in our core utility business to enable futureearnings growth whileimproving both our earned and allowed ROEs across all operating companiesOptimize the regulatory outcome for all operating companiesMaximize the output of our generationfleet and optimize our off-system salesContinue to develop our transmission opportunitiesContinue active involvement in climate change policyCONTINUED COMMITMENT TO OUR CORE UTILITY MISSION: BRINGREASONABLY PRICED ELECTRIC SERVICE TO OUR CUSTOMERS,THEREBY STRENGTHENING OUR COMMUNITIES AND REWARDINGOUR INVESTORSOur FocusDeliver value to our investors8AEP Service TerritoryAEP EAST OPERATING COMPANIESAppalachian Power CompanyIndiana Michigan Power CompanyKingsport Power CompanyKentucky Power CompanyWheeling Power CompanyColumbus Southern Power CompanyOhio Power CompanyEAST REGULATED UTILITIESAEP OHIO9AEP Service TerritoryAEP WEST OPERATING COMPANIESPublic Service Company of OklahomaSouthwestern Electric Power CompanyTexas Central CompanyTexas North CompanyWEST REGULATED UTILITIESAEP TEXASTexas North CompanyTexas Central Company10Utility Operations - Load3 Yr. Compound Annual IndustrialLoad Growth at 3.79%3 Yr. Compound Annual CommercialLoad Growth at 2.91%Note: Figures do not include Texas Retail and Miscellaneous Other3 Yr. Compound AnnualResidential Load Growth at 2.42%45,77048,72047,22249,17630,00035,00040,00045,00050,000Millions ofkWh2004 2005 2006 2007Residential51,48453,21753,91457,56647,50050,00052,50055,00057,50060,000Millions ofkWh2004 2005 2006 2007Industrial37,20338,60538,57940,54525,00030,00035,00040,00045,000Millions ofkWh2004 2005 2006 2007Commercial11TXOKINVA2007 Retail RevenuePERCENTAGE OFAEP SYSTEM RETAIL REVENUESRetail Revenue Composition by Customer Class**CUSTOMER PROFILEAEP’S SERVICE TERRITORY ENCOMPASSESAPPROXIMATELY 5 MILLION CUSTOMERS IN 11 STATESSource: Form 10-K*Note: Retail electric service in the ERCOT area of Texas is provided to most customersthrough unaffiliated REPs with TCC and TNC providing only regulated delivery services. Retailelectric service in the SPP area of Texas is provided by SWEPCo and an affiliated REP.**Note: Figures do not include Other Retail Sales33%13%9%9%10%8%5%4%4%2%2%1%41.7%30.4%27.9%Industrial 27.9%Commercial 30.4%Residential 41.7%Tennessee 1%Michigan 2%Arkansas 2%Kentucky 4%Louisiana 4%Texas SPP 5%Texas ERCOT 8%Virginia 9%Indiana 9%West Virginia 10%Oklahoma 13%Ohio 33%12Utility OperationsGenerationAEP has approximately 39,000 megawatts of generating capacityin 3 RTOs. AEP owns all orportions of 60 major generatingplants, which include coal/lignite, natural gas, nuclear, windprojects and hydroelectric facilities.AEP operates generating capacity in its internal power poolunder an economic dispatchsystem1. AEP’s power pool’s competitive, largelycoal-based production costs are among thelowest in the nation. AEP’s power production costs are also kept relatively low by its relianceprimarily on fossil fuel (gas and coal), with only a small overall nuclear dependence.1Economic dispatch of a generating system utilizes the lowest-cost generating units to meet electric demand at any point in time.13Coal/Lignite69%Nat. Gas/Oil20%Nuclear6%Pumped Storage/Hydro/Wind5%AEP’s Generation Fleet38,721* MW CapacityDomestic Generation FleetOperating StatisticsNERC Regional Presence200720062005Equivalent CapacityFactorEquivalentAvailability Factor59.54%81.84%60.06%82.62%63.18%84.76%5%ERCOT23%SPP72%RFC* Includes 270 MW of mothballed/decommissioned generating capacity.14Transmission Line Circuit Miles DetailOperating Company Level(Circuit Miles)State Level(Circuit Miles)Note:Transmission line circuit miles are current as of 12/31/07State765kV500kV345kV230kV161kV138kV115kV88kV 69kV46kV 40kV 34.5kV 23kV Total0Arkansas0 0 28 0 228 168 42 0 461 0 0 0 0 927Indiana600 0 1,380 0 0 1,426 0 0 412 0 0 591 0 4,409Kentucky258 0 8 0 46 320 0 0 544 55 0 3 0 1,234Louisiana0 0 105 0 0 248 0 0 233 0 0 0 0 586Michigan16 0 234 0 0 239 0 0 299 0 0 148 0 936Ohio509 0 1,793 0 0 3,358 0 0 2,636 0 59 365 225 8,945Oklahoma0 0 625 34 8 2,174 10 0 812 0 0 0 0 3,663Tennessee 0 0 0 91 0 154 0 0 3 0 0 27 0 275Texas0 0 1,345 0 0 4,793 14 0 5,151 0 0 0 0 11,303W. Virginia384 17 323 0 0 1,602 0 23 457 739 0 89 0 3,634Virginia349 96 69 15 0 1,720 0 0 709 48 0 141 0 3,147Total2,116 113 5,910 140 282 16,202 66 23 11,717 842 59 1,364 225 39,059Operating Company 765kV 500kV 345kV 230kV 161kV 138kV 115kV 88kV 69kV 46kV 40kV 34.5kV 23kV TotalAPCo 734 97 383 106 0 3,302 0 23 1,079 787 0 230 0 6,741CSP0 0 884 0 0 893 0 0 467 0 59 0 113 2,416I&M615 0 1,614 0 0 1,665 0 0 711 0 0 739 0 5,344KGPCo0 0 0 0 0 0 0 0 3 0 0 27 0 30KPCo258 0 8 0 46 320 0 0 544 55 0 3 0 1,234OPCo509 0 909 0 0 2,464 0 0 2,169 0 0 365 112 6,528PSO0 0 579 34 8 2,149 10 0 812 0 0 0 0 3,592SWEPCo0 0 660 0 228 1,195 42 0 1,405 0 0 0 0 3,530TCC0 0 641 0 0 2,453 0 0 1,740 0 0 0 0 4,834TNC0 0 223 0 0 1,586 14 0 2,699 0 0 0 0 4,522WPCo0 16 9 0 0 175 0 0 88 0 0 0 0 288Total2,1161135,91014028216,2026623 11,717842591,36422539,05915Distribution Line DetailNote:Distribution line circuit miles are current as of 12/31/2007The Texas Panhandle Area was transferred from Texas North (Abilene District) to SWEPCO (Texarkana District) during 2007.Musser Companies takeover included in APCO WVA mileage numbers.ByOperatingBy StateLine Miles*CompanyLine Miles*Tennessee1,522 | KGPCO1,522Virginia30,005 | KYPCO9,848W. Virginia21,339 | APCO49,860Kentucky9,848 | OPCO26,396Ohio45,110 | CSP18,714Michigan5,247 | I&M20,089Indiana14,842 | WPC1,484Texas51,320 | TCC29,038Oklahoma21,622 | TNC13,772Arkansas4,442 | PSO21,622Louisiana7,484 | SWEPCO20,436Total212,781Total212,781* Includes approximately 28,800 miles of underground circuit miles16Utility OperationsPROPERTY, PLANT & EQUIPMENT DETAIL ($ MILLIONS)Property Plant and EquipmentOriginalCostAEPAccumulatedD&ANet UtilityPlantElectric:Production20,948$9,200$11,748$Transmission7,7342,417 5,317Distribution12,5613,332 9,229Other (including coal mining &nuclear fuel)3,6331,708 1,925Work in Progress3,516(54) 3,570Total48,392$16,603$31,789$Source: Company information as of 9/30/08**Operating Company Overview** **Regulation Generation &** **Environmental** 

# Company Overview**Coal**

# 17 

# Operating Company

Overview

Fall EEI 2008 • Organizational Structure

• AEP East Regional Utilities

• AEP West Regional Utilities

# 18 

# Organizational Structure

Mike Carl Bob Brian

Joe Dana Helen Pablo Venita

Stuart Tim COO

Carl English

President

AEP Utilities

Bob Powers

EVP

AEP Utilities East

Brian Tierney EVP

AEP Utilities West

Venita McCellon-Allen

President

Ohio

Joe Hamrock

President

Appalachian Power

Dana Waldo

President

Indiana Michigan Power

Helen Murray

President

Kentucky Power

Tim Mosher President

Texas

Pablo Vegas

President

SWEPCO

Paul Chodak III

President

Public Service of Oklahoma

Stuart Solomon



# Senior management close to customers and

regulators

CEO

Mike Morris



# Paul19AEP East Regional Utilities20Appalachian PowerAppalachian Power Company (APCo)(organized in Virginia in 1926) is engaged in the generation,transmission and distribution ofelectric power to approximately956,000 retail customers in the southwestern portion of Virginia andsouthern West Virginia, and insupplying and marketing electricpower at wholesale to otherelectric utility companies,municipalities and other market participants. APCo covers a serviceterritory of 19,049 square miles, and at December 31, 2007, APCoand its wholly owned subsidiaries had 2,497 employees. Among theprincipal industries served by APCo are coal mining, primary metals,chemicals and textile mill products.In addition to its AEP Systeminterconnections, APCo also is interconnected with the followingunaffiliated utility companies: Carolina Power & Light Company,Duke Energy Corporation and Virginia Electric and Power Company.APCo has several points of interconnection with TVA and has enteredinto agreements with TVA under which APCo and TVA interchangeand transfer electric power over portions of their respectivesystems. APCo is a member of PJM.PRINCIPAL INDUSTRIES SERVED:Coal miningPrimary metalsChemicalsTextile mill productsPaper productsPresident and Chief Operating Officer:Dana WaldoTotal Customers at 12/31/07:•Residential 815,000•Commercial 130,000•Industrial 4,000•Other 7,000Total956,000Generating Capacity 6,290 MWGenerating Capacity by Fuel Mix:•Coal: 80.9%•Hydro/Pump: 10.8%•Nat Gas: 8.3%Transmission Miles6,741Distribution Miles49,86021Debt Equity Total Debt Equity Total Debt Equity TotalCapitalization Per Balance Sheet 2,345,5111,821,4854,166,9962,633,6392,053,9374,687,5763,122,5562,099,7845,222,340% of Capitalization Per Balance Sheet 56.3% 43.7% 100.0% 56.2% 43.8% 100.0% 59.8% 40.2% 100.0%Adjusted Capitalization2,345,5111,821,4854,166,9962,633,6392,053,9374,687,5763,133,6572,099,7845,233,441% of Adjusted Capitalization56.3% 43.7% 100.0% 56.2% 43.8% 100.0% 59.9% 40.1% 100.0%FFO Interest Coverage3.73.93.1FFO Total Debt12.4%14.4%12%CAPITAL STRUCTURE(in thousands)CAPITAL STRUCTURE200520062007Revenue2,607,000$% of AEP Retail18%Net Income54,000$Capital Expenditure746,000$2007 Financial Data *(in thousands)As of 9/30/08Total Assets8,161,499$Net Plant Assets 6,495,352$Cash1,987$2008 Asset Data **(in thousands)Appalachian PowerSources: * 2007 Form 10-K** 3Q08 Form 10-Q (unaudited)Note: Capital Expenditure amounts exclude AFUDC22Nat Gas516Ceredo, West VirginiaCeredo #1,2,3,4,5,6Hydro15Winfield, West VirginiaWinfield #1,2,3Pump586Penhook, VirginiaSmith Mountain #1,2,3,4,5Hydro6Lynchburg, VirginiaReusens #1,2,3,4,5Hydro1Roanoke, VirginiaNiagara #1,2Hydro9Leesville, VirginiaLeesville #1,2Coal335Glen Lyn, VirginiaGlen Lyn #1,2Coal705Carbo, VirginiaClinch River #1,2,3Hydro28Radford, VirginiaClaytor #1,2,3,4Hydro11Marmet, West VirginiaMarmet #1,2,3Coal400Glasgow, West VirginiaKanawha River #1,2Hydro12Montgomery, West VirginiaLondon #1,2,3Coal300New Haven, West VirginiaPhilip Sporn #1,3Coal1,320New Haven, West VirginiaMountaineer #1Coal2,033St. Albans, West VirginiaJohn E. Amos #1,2(APCo owns 1/3 of Unit 3)Hydro8Byllesby, VirginiaByllesby #1,2,3,4Hydro5Ivanhoe, VirginiaBuck #1,2,3FuelNominal Megawatt CapacityLocationNameAppalachian Power Plants (Winter Capacity)12,878,70432,344,239Three Year Average12,828,21812,619,91013,187,986Coal Consumption (tons burned)32,588,77331,494,58132,949,364MWh Produced200720062005Production StatAPCo Generation Production Statistics – 2005 - 2007Operating Information2007 retail electric sales in megawatt-hours 33,875,4112007 firm wholesale sales in megawatt-hours 3,435,670Average cost per kilowatt-hour (residential)6.36 cents 2007 System Peak – February 68,003 MWAppalachian Power23MAJOR CUSTOMERS:Century Aluminum of WV, Inc. (WV)Felman Production (WV)Roanoke Electric Steel Corporation (VA)Georgia-Pacific Corporation (VA)Alcan Rolled Products (WV)Greif Brothers Corporation (VA)West Virginia Alloys, Inc. (WV)Steel of West Virginia (WV)Goodyear Tire and Rubber (VA)CNX Gas Company (VA)(data for year ended December 2007)APPALACHIAN AREAINVESTOR OWNED UTILITIES *TYPICAL BILL COMPARISON **29,963KentuckyUtilities22,282Potomac509,315APCo2,211,200Dominion Virginia98,574AlleghenyCustomersVirginiaCustomersTennessee46,208APCo500,051Allegheny435,765APCoCustomersWest Virginia•Top 10 Customers = 50% of industrial sales•Metropolitan areas account for 34% of ultimate sales•110 persons per square mile (U.S. = 85)(data for 12 months ended December 2007)** Typical bills are displayed in $/month, based on 1,000 kWh of residentialusage. Billing amounts sourced from the EEI 2008 Typical Bills and AverageRates Report as of January 1, 2008.122.92Potomac88.69Dominion Virginia72.52Allegheny71.96APCo64.55AEP – Wheeling68.72Old Dominion Power(Kentucky Utilities)64.55APCo$/monthVirginia$/monthWest VirginiaAppalachian Power* Customer counts are as of December 31, 2006 and were sourced from table 10athttp://www.eia.doe.gov/cneaf/electricity/esr/esr_sum.html24Columbus Southern Power Company (CSPCo)(organized in Ohio in 1937, the earliestdirect predecessor company having beenorganized in 1883) is engaged in the generation, transmission and distribution ofelectric power to approximately 746,000 retail customers in Ohio, and insupplying and marketing electric power atwholesale to other electric utilities,municipalities and other market participants. CSPCo covers a service territory of3,701 miles and at December 31, 2007, CSPCo had 1,265 employees. CSPCo’sservice area is comprised of two areas in Ohio, which include portions oftwenty-five counties. One area includesthe City of Columbus and the other is apredominantly rural area in south central Ohio. In addition to its AEP Systeminterconnections, CSPCo also is interconnected with the following unaffiliatedutility companies: Duke Energy Ohio, DP&L and Ohio Edison Company. CSPCo isa member of PJM.President and Chief OperatingOfficer:Joe HamrockTotal Customers at 12/31/07:•Residential 666,000•Commercial 77,000•Industrial 3,000Total746,000Generating Capacity 3,701 MWGenerating Capacity by Fuel Mix:•Coal63.4%•Natural Gas 36.6%Transmission Miles2,416Distribution Miles18,714PRINCIPAL INDUSTRIES SERVED:Food processingChemicalsPrimary metalsFabricated metalsRubber and plastic productsColumbus Southern Power25Debt Equity Total Debt Equity Total Debt Equity TotalCapitalization Per Balance Sheet 1,214,529981,5462,196,0751,198,0181,056,0172,254,0351,393,4231,164,2772,557,700% of Capitalization Per Balance Sheet 55.3% 44.7% 100.0% 53.1% 46.9% 100.0% 54.5% 45.5% 100.0%Adjusted Capitalization1,214,529981,5462,196,0751,198,0181,056,0172,254,0351,401,5511,164,2772,565,828% of Adjusted Capitalization55.3% 44.7% 100.0% 53.1% 46.9% 100.0% 54.6% 45.4% 100.0%FFO Interest Coverage5.86.25.9FFO Total Debt24.3%28.8%26.9%200520062007CAPITAL STRUCTURE(in thousands)CAPITAL STRUCTURERevenue2,043,000$% of AEP Retail16%Net Income258,000$Capital Expenditure338,000$2007 Financial Data *(in thousands)As of 9/30/08Total Assets3,949,104$Net Plant Assets 3,262,005$Cash1,956$2008 Asset Data **(in thousands)Columbus Southern PowerSources: * 2007 Form 10-K** 3Q08 Form 10-Q (unaudited)Note: Capital Expenditure amounts exclude AFUDC26Operating Information2007 retail sales in megawatt-hours22,008,6072007 firm wholesale sales in megawatt-hours0Average cost per kilowatt-hour (residential)8.81 cents2007 System Peak – August 84,723 MWOil3Aberdeen, OhioJ. M. Stuart#1,2,3,4(Units co-owned by DP&L, Duke, CSP 26%)Nat Gas507Mount Sterling, OhioDarby # 1,2,3,4,5,6Coal604Aberdeen, OhioJ. M. Stuart#1,2,3,4(Units co-owned by DP&L, Duke, CSP 26%)Coal1,254Conesville, OhioConesville #1,2,3,4(Unit #4 co-owned by DP&L, Duke, CSP 43.5%)Coal100Lockbourne, OhioPicway #1Coal330Moscow, OhioWm. H. Zimmer#1(Co-owned by DP&L, Duke, CSP 25.4%)Nat Gas850Washington County, OhioWaterford # 1,2,3,4Coal53New Richmond, OhioBeckjord #6(Co-owned by DP&L, Duke, CSP 12.5%)FuelNominal MegawattCapacityLocationNameColumbus Southern Plants (Winter Capacity)6,109,64914,562,257Three Year Average6,327,8035,953,0846,048,060Coal Consumption (tons burned)15,514,49514,134,23214,038,045MWh Produced200720062005Production StatColumbus Southern Generation Production Statistics – 2005 – 2007Columbus Southern Power27OHIO INVESTOR OWNED UTILITIES *TYPICAL BILL COMPARISON ****513,074DP&L1,449,636AEP Ohio **1,820,036First Energy ***670,135Duke Energy OhioCustomersOhioMAJOR CUSTOMERS:Ormet AluminumEramet Marietta, Inc.Kraton PolymersE I duPont de Nemours HQGlatfelter CompanyAnheuser-Busch, Inc.Griffin Wheel Company, Inc.(data for year ended December 2007)•Top 10 customers = 59% of industrial sales•Metropolitan areas account for 86% of ultimate sales•238 persons per square mile (U.S. = 85)(data for 12 months ended December 2007)  Typical bills are displayed in $/month, based on1,000 kWh of residential usage. Billing amountssourced from the EEI 2008 Typical Bills and AverageRates Report as of January 1, 2008. Ohio ratesrepresent POLR bundled residential rates.116.35FE (Ohio Edison)109.90FE (CEI)98.54DP&L125.27FE (Toledo Edison)107.25Duke Energy Ohio93.78AEP (CSP)80.61AEP (OPCo)$/monthOhio**  AEP Ohio - CSPCo = 739,424OPCo = 710,212*** First Energy - Toledo Edison = 265,028CEI = 702,968Ohio Edison = 852,040Columbus Southern Power* Customer counts are as of December 31, 2006 and were sourced from table 10athttp://www.eia.doe.gov/cneaf/electricity/esr/esr_sum.html28Indiana Michigan Power Company (I&M)(organized in Indiana in 1925)is engaged in the generation,transmission and distribution ofelectric power to approximately583,000 retail customers in northern and eastern Indiana andsouthwestern Michigan, and in supplying and marketing electricpower at wholesale to other electric utility companies, ruralelectric cooperatives, municipalities and other marketparticipants. I&M has a service territory of 4,578 square miles andat December 31, 2007, I&M had 2,687 employees. Since 1975, I&Mhas leased and operated the assets of the municipal system of theCity of Fort Wayne, Indiana. In addition to its AEP Systeminterconnections, I&M also is interconnected with the followingunaffiliated utility companies: Central Illinois Public ServiceCompany, Duke Energy Ohio, Commonwealth Edison Company,Consumers Energy Company, Illinois Power Company, IndianapolisPower & Light Company, Louisville Gas and Electric Company,Northern Indiana Public Service Company, Duke Energy Indiana andRichmond Power & Light Company. I&M is a member of PJM.President and Chief OperatingOfficer:Helen MurrayPRINCIPAL INDUSTRIES SERVED:Primary metalsTransportation equipmentFabricated metal productsRubber and miscellaneous plastic productsChemicals and allied productsTotal Customers at 12/31/07:•Residential508,000•Commercial68,000•Industrial5,000•Other2,000Total583,000Generating Capacity 5,821 MWGenerating Capacity by Fuel Mix:•Coal: 51.1%•Nuclear: 48.6%•Hydro:0.3%Transmission Miles5,344Distribution Miles20,089Indiana Michigan Power29Debt Equity Total Debt Equity Total Debt Equity TotalCapitalization Per Balance Sheet 1,538,6421,228,176 2,766,8181,646,3081,297,5212,943,8291,612,491 1,393,779 3,006,270% of Capitalization Per Balance Sheet 55.6% 44.4% 100.0% 55.9% 44.1% 100.0% 53.6% 46.4% 100.0%Adjusted Capitalization1,909,3371,228,176 3,137,5131,991,7171,297,5213,289,2382,049,215 1,393,779 3,442,994% of Adjusted Capitalization60.9% 39.1% 100.0% 60.6% 39.4% 100.0% 59.5% 40.5% 100.0%FFO Interest Coverage4.74.84.8FFO Total Debt22.8%23.9%26.1%CAPITAL STRUCTURE(in thousands)CAPITAL STRUCTURE200520062007Revenue2,043,000$% of AEP Retail11%Net Income137,000$Capital Expenditure295,000$2007 Financial Data *(in thousands)As of 9/30/08Total Assets5,935,699$Net Plant Assets 3,702,117$Cash1,328$2008 Asset Data **(in thousands)Indiana Michigan PowerSources: * 2007 Form 10-K** 3Q08 Form 10-Q (unaudited)Note: Capital Expenditure amounts exclude AFUDC30Operating Information2007 retail electric sales in megawatt-hours19,552,1262007 firm wholesale sales in megawatt-hours3,555,874Average cost per kilowatt-hour (residential)6.83 cents2007 System Peak – August 74,528 MW7,455,1817,406,5067,947,6667,011,370Coal Consumption (tons burned)31,696,95631,604,87431,950,76831,535,226MWh ProducedThree-Year Avg.200720062005Production StatI&M Generation Production Statistics – 2005 – 2007Indiana Michigan PowerNuclear2,191Bridgman, MichiganDonald C Cook #1,2Hydro4Mishawaka, IndianaTwin Branch #1,2,3,4,5,6Hydro5Berrien Springs, MichiganBerrien Springs #1,2,3,4,5,6,7,8,9,10,11,12Coal2,620Rockport, IndianaRockport #1,2 (includes AEG)Hydro1Mottville, MichiganMottville #1,2,3,4Hydro1Constantine, MichiganConstantine #1,2,3,4Hydro2Buchanan, MichiganBuchanan #1,2,3,4,5,6,7,8,9,10Coal995Lawrenceburg, IndianaTanners Creek #1,2,3,4Hydro2Elkhart, IndianaElkhart #1,2,3FuelNominal MegawattCapacityLocationNameIndiana Michigan Power Plants (Winter Capacity)31INDIANA & MICHIGAN INVESTOR OWNED UTILITIES * TYPICAL BILL COMPARISON **1,779,1842,156,214** Typical bills are displayed in $/month, based on 1,000 kWh of residentialusage. Billing amounts sourced from the EEI 2008 Typical Bills and AverageRates Report as of January 1, 2008.•Top 10 Customers = 47% of industrial sales•Metropolitan areas account for 68% of ultimate sales•204 persons per square mile (U.S. = 85)(data for 12 months ended December 2007)MAJOR CUSTOMERS:Steel Dynamics Inc. (IN)American Axle and Mfg. Co, Inc. (MI)Air Products & Chemicals, Inc. (IN)Boc Gases (IN)Saint Gobain Corporation USA (IN)Whirlpool Corporation (MI)New Energy Corp (IN)Dock Foundry (MI)White Pigeon Paper Company (MI)IN TEK (IN)The Minute Maid Company (MI)(data for year ended December 2007)116.10SIGECo113.12Detroit Edison89.19Duke Energy Indiana101.79Consumers Energy73.37IP & L66.09I & M71.46I & M$/monthMichigan$/monthIndianaIndiana Michigan Power* Customer counts are as of December 31, 2006 and were sourced from table 10athttp://www.eia.doe.gov/cneaf/electricity/esr/esr_sum.html450,819NIPSCO145,726SIGECo766,165Duke Energy Indiana466,833IP & L454,345I & MCustomersIndiana2,166,478Detroit Edison1,792,469Consumers Energy126,546I & MCustomersMichigan32Kentucky PowerKentucky Power Company (KPCo)(organized in Kentucky in 1919) is engaged in the generation,transmission and distribution ofelectric power to approximately176,000 retail customers in an area in eastern Kentucky, and insupplying and marketing electricpower at wholesale to otherelectric utility companies, municipalities and other marketparticipants. KPCo encompasses a service territory of 4,813square miles and at December 31, 2007, KPCo had 471employees. In addition to its AEP System interconnections, KPCoalso is interconnected with the following unaffiliated utilitycompanies: Kentucky Utilities Company and East Kentucky PowerCooperative Inc. KPCo is also interconnected with TVA. KPCo is amember of PJM.President and Chief OperatingOfficer:Tim MosherTotal Customers at 12/31/07:•Residential144,000•Commercial30,000•Industrial1,500•Other500Total176,000Generating Capacity 1,060 MWGenerating Capacity by Fuel Mix:•Coal: 100%Transmission Miles1,234Distribution Miles9,848PRINCIPAL INDUSTRIES SERVED:Petroleum refiningCoal miningPrimary metalsChemicalsElectric/gas/sanitary services33Debt Equity Total Debt Equity Total Debt Equity TotalCapitalization Per Balance Sheet 493,030 347,841840,871 477,604369,651 847,255 467,526 386,969 854,495% of Capitalization Per Balance Sheet 58.6% 41.4% 100.0% 56.4% 43.6% 100.0% 54.7% 45.3% 100.0%Adjusted Capitalization493,030347,841840,871 477,604369,651 847,255 469,770 386,969 856,739% of Adjusted Capitalization58.6% 41.4% 100.0% 56.4% 43.6% 100.0% 54.8% 45.2% 100.0%FFO Interest Coverage3.43.93.8FFO Total Debt14.0%17.7%17.3%200520062007CAPITAL STRUCTURE(in thousands)CAPITAL STRUCTURERevenue588,000$% of AEP Retail4%Net Income32,500$Capital Expenditure68,000$2007 Financial Data *(in thousands)As of 9/30/08Total Assets1,385,672$Net Plant Assets 1,096,852$Cash455$2008 Asset Data **(in thousands)Kentucky PowerSources: * 2007 Annual Report** 3Q08 Financial Statements (unaudited)Note: Capital Expenditure amounts exclude AFUDC34Operating Information2007 retail electric sales in megawatt-hours 7,114,5062007 firm wholesale sales in megawatt-hours 100,2492007 average cost per kilowatt-hour (residential) 6.71 cents2007 System Peak – February 61,808 MWCoal1,060Louisa, KentuckyBig Sandy #1,2FuelNominal Megawatt CapacityLocationNameKentucky Power Plants (Winter Capacity)2,910,3627,350,117Three-Year Average2,950,2962,854,5372,926,253Coal Consumption (tons burned)7,533,2237,171,5057,345,624MWh Produced200720062005Production StatKentucky Power Generation Production Statistics – 2005-2007Kentucky Power35KENTUCKY INVESTOR OWNED UTILITIES *TYPICAL BILL COMPARISON **397,331LG & E497,939Kentucky Utilities175,572KPCoCustomersKentuckyMAJOR CUSTOMERS:Catlettsburg Refining LLCAK Steel Holding CorporationSidney Coal Company, Inc.Air Products & Chemicals, Inc.KES Acquisition Company LLCMcCoy Elkhorn Coal CorporationBlue Diamond Coal CompanyPerry County Coal CorporationConsol of Kentucky, Inc.Czar Coal Corporation(data for year ended December 2007)•Top 10 customers = 63% of industrial sales•Metropolitan areas account for 41% of ultimate sales•68 persons per square mile (U.S. = 85)(data for 12 months ended December 2007)** Typical bills are displayed in $/month,based on 1,000 kWh of residential usage.Billing amounts sourced from the EEI 2008Typical Bills and Average Rates Report as ofJanuary 1, 2008.74.53LG&E67.89KPCo77.69Duke Energy Kentucky73.67Kentucky Utilities$/monthKentucky* Customer counts are as of December 31, 2006 and were sourced from table 10athttp://www.eia.doe.gov/cneaf/electricity/esr/esr_sum.htmlKentucky Power36Ohio Power Company (OPCo)(organized in Ohio in 1907 and re-incorporated in 1924) isengaged in the generation, transmission and distributionof electric power to approximately 712,000 retailcustomers in the northwestern, east central, eastern andsouthern sections of Ohio, and in supplying and marketingelectric power at wholesale to other electric utilitycompanies, municipalities and other market participants.OPCO covers a service territory of 6,675 miles and atDecember 31, 2007, OPCo had 2,351 employees. Inaddition to its AEP System interconnections, OPCo also isinterconnected with the following unaffiliated utilitycompanies: Duke Energy Ohio, The Cleveland ElectricIlluminating Company, DP&L, Duquesne Light Company,Kentucky Utilities Company, Monongahela PowerCompany, Ohio Edison Company, The Toledo EdisonCompany and West Penn Power Company. OPCo is amember of PJM.PRINCIPAL INDUSTRIES SERVED:Primary metalsRubber and plastic productsStone, clay and glass productsPetroleum refiningChemicalsPresident and Chief OperatingOfficer:Joe HamrockTotal Customers at 12/31/07:•Residential610,000•Commercial92,000•Industrial7,000•Other 3,000Total712,000Generating Capacity 8,478 MWGenerating Capacity by Fuel Mix:•Coal: 99.7%•Hydro:0.3%Transmission Miles6,528Distribution Miles26,396Ohio Power37Debt Equity Total Debt Equity Total Debt Equity TotalCapitalization Per Balance Sheet 2,291,4091,784,5864,075,9952,600,0502,024,9724,625,0222,951,8472,307,6445,259,491% of Capitalization Per Balance Sheet 56.2% 43.8% 100.0% 56.2% 43.8% 100.0% 56.1% 43.9% 100.0%Adjusted Capitalization2,291,4091,784,5864,075,9952,600,0502,024,9724,625,0222,980,9242,307,6445,288,568% of Adjusted Capitalization56.2% 43.8% 100.0% 56.2% 43.8% 100.0% 56.4% 43.6% 100.0%FFO Interest Coverage6.26.24.5FFO Total Debt23.8%19.7%19.1%CAPITAL STRUCTURE(in thousands)CAPITAL STRUCTURE200520062007Revenue2,814,000$% of AEP Retail16%Net Income268,000$Capital Expenditure933,000$2007 Financial Data *(in thousands)As of 9/30/08Total Assets7,684,833$Net Plant Assets 6,459,196$Cash9,088$2008 Asset Data **(in thousands)Ohio PowerSources: * 2007 Form 10-K** 3Q08 Form 10-Q (unaudited)Note: Capital Expenditure amounts exclude AFUDC38Operating Information2007 retail sales in megawatt-hours27,727,7422007 firm wholesale sales in megawatt-hours2,293,855Average cost per kilowatt-hour (residential)7.72 cents2007 System Peak – August 235,485 MWHydro26Racine, OhioRacine #1,2Coal750New Haven, West VirginiaPhillip Sporn # 2,4,5Coal580Brilliant, OhioCardinal #1(Two other units owned by Buckeye Power)Coal630Moundsville, West VirginiaKammer #1,2,3Coal867St. Albans, West VirginiaJohn E. Amos #3(2/3; 1/3 owned by APCo)Coal1,425Beverly, OhioMuskingum River #1,2,3,4,5Coal1,560Moundsville, West VirginiaMitchell #1,2Coal2,640Cheshire, OhioGen. JM Gavin #1,2FuelNominal MegawattCapacityLocationNameOhio Power Plants(Winter Capacity)20,242,53951,859,139Three Year Average21,234,43019,111,07120,382,116Coal Consumption (tons burned)54,155,69749,341,13452,080,585MWh Produced200720062005Production StatOhio Power Generation Production Statistics – 2005–2007Ohio Power39OHIO INVESTOR OWNED UTILITIES *TYPICAL BILL COMPARISON ****MAJOR CUSTOMERS:Wheeling-Pittsburgh Steel Corp.The Timken CompanyRepublic Engineered Products, LLCOrmet Primary Aluminum Corp.Globe Metallurgical, Inc.Premcor Refining Group, Inc.Linde Glass, LLCOwens Corning Fiberglass Corp.Marathon Ashland Petroleum, LLCAristech Chemical Corp.(data for year ended December 2007)•Top 10 customers = 50% of industrial sales•Metropolitan areas account for 60% of ultimate sales•136 persons per square mile (U.S. = 85)(data for 12 months ended December 2007)  Typical bills are displayed in $/month, based on1,000 kWh of residential usage. Billing amountssourced from the EEI 2008 Typical Bills and AverageRates Report as of January 1, 2008. Ohio ratesrepresent POLR bundled residential rates.513,074DP&L1,449,636AEP Ohio ** 1,820,036First Energy ***670,135Duke Energy OhioCustomersOhioOhio Power* Customer counts are as of December 31, 2006 and were sourced from table 10athttp://www.eia.doe.gov/cneaf/electricity/esr/esr_sum.html** AEP Ohio - CSPCo = 739,424OPCo = 710,212***First Energy - Toledo Edison = 265,028CEI = 702,968Ohio Edison = 852,040116.35FE (Ohio Edison)109.90FE (CEI)98.54DP&L125.27FE (Toledo Edison)107.25Duke Energy Ohio93.78AEP (CSP)80.61AEP (OPCo)$/monthOhio40AEP West Regional Utilities41Public Service Company of OklahomaPublic Service Company of Oklahoma (PSO)(organized in Oklahoma in 1913) is engaged in the generation, transmissionand distribution of electric power toapproximately 525,000 retail customersin eastern and southwestern Oklahoma, and in supplying and marketingelectric power at wholesale toother electric utility companies,municipalities, rural electric cooperatives and other market participants. PSOhas a service territory of 30,000 square miles and at December 31, 2007, PSOhad 1,255 employees. In addition toits AEP System interconnections, PSOalso is interconnected with Ameren Corporation, Empire District Electric Co.,Oklahoma Gas & Electric Co., Southwestern Public Service Co. and WestarEnergy, Inc. PSO is a member of SPP.President and Chief OperatingOfficer:Stuart SolomonPRINCIPAL INDUSTRIES SERVED:Oil and gas extractionPaper productsStone, clay and glass productsPrimary metalsTransportation equipmentTotal Customers at 12/31/07:•Residential 451,000•Commercial 59,000•Industrial 7,000•Other 8,000Total525,000Generating Capacity 4,581 MWGenerating Capacity by Fuel Mix:•Coal: 22.2%•Natural Gas: 77.2%•Oil: 0.6%Transmission Miles3,592Distribution Miles21,62242Debt Equity Total Debt Equity Total Debt Equity TotalCapitalization Per Balance Sheet 646,954553,8591,200,813746,321590,7001,337,021918,316646,1601,564,476% of Capitalization Per Balance Sheet 53.9% 46.1% 100.0% 55.8% 44.2% 100.0% 58.7% 41.3% 100.0%Adjusted Capitalization 646,954553,8591,200,813746,321590,7001,337,021922,343646,1601,568,503% of Adjusted Capitalization 53.9% 46.1% 100.0% 55.8% 44.2% 100.0% 58.8% 41.2% 100.0%FFO Interest Coverage 2.8 6.0 2.6FFO Total Debt9.5%27.2%9.2%200520062007CAPITAL STRUCTURE(thousands)CAPITAL STRUCTURERevenue1,396,000$% of AEP Retail13%Net Loss(24,000)$Capital Expenditure315,000$2007 Financial Data *(in thousands)As of 9/30/08Total Assets2,971,827$Net Plant Assets 2,430,979$Cash2,244$2008 Asset Data **(in thousands)Sources: * 2007 Form 10-K** 3Q08 Form 10-Q (unaudited)Note: Capital Expenditure amounts exclude AFUDCPublic Service Company of Oklahoma43Nat Gas, Oil199Weleetka, OklahomaWeleetka #1,2,3Nat Gas, Oil289Lawton, OklahomaComanche #1,2,3Nat Gas, Oil627Anadarko, OklahomaSouthwestern #1,2,3,4,5Nat Gas, Oil943Oologah, OklahomaNortheastern #1,2Nat Gas, Oil1,081Jenks, OklahomaRiverside #1,2,3,4Coal108Vernon, TexasOklaunion(16% ownership)Coal, Oil911Oologah, OklahomaNortheastern #3, 4Nat Gas, Oil423Tulsa, OklahomaTulsa #1,2,3FuelNominal Megawatt CapacityLocationNameOklahoma Power Plants (Winter Capacity)Operating Information2007 retail electric sales in megawatt-hours17,910,7402007 firm wholesale sales in megawatt-hours10,536Average cost per kilowatt-hour (residential)8.10 cents2007 System Peak – August 134,175 MW4,292,56814,985,166Three-Year Average4,102,9434,421,3964,353,364Coal Consumption (tons burned)14,439,80115,139,84815,375,848MWh Produced200720062005Production StatPublic Service Company of Oklahoma Generation Production Statistics – 2005 - 2007Public Service Company of Oklahoma44MAJOR CUSTOMERS:Anchor StoneWeyerhaeuser Valliant CompanySheffield SteelKimberly Clark Corp.Goodyear Tire & Rubber CompanyAmerican AirlinesSun RefiningTerra NitrogenSinclairExplorer Pipeline Company(data for year ended December 2007)OKLAHOMA INVESTOR OWNED UTILITIES *TYPICAL BILL COMPARISON **688,021OG&E516,875PSOCustomersOklahoma•Top 10 customers = 45% of industrial sales•Metropolitan areas account for 75% of ultimate sales•47 persons per square mile (U.S. = 85)(data for 12 months ended December 2007)** Typical bills are displayed in $/month,based on 1,000 kWh of residential usage.Billing amounts sourced from the EEI 2008Typical Bills and Average Rates Report as ofJanuary 1, 2008.74.21OG&E79.43PSO90.89Empire$/monthOklahoma* Customer counts are as of December 31, 2006 and weresourced from table 10 athttp://www.eia.doe.gov/cneaf/electricity/esr/esr_sum.htmlPublic Service Company of Oklahoma45Southwestern Electric PowerSouthwestern Electric Power Company (SWEPCo)(organized in Delaware in 1912) is engaged in the generation, transmission anddistribution of electric power to approximately 467,000 retail customers innortheastern Texas, northwestern Louisiana and western Arkansas, and in supplyingand marketing electric power at wholesale to other electric utility companies,municipalities, rural electric cooperativesand other market participants. SWEPCohas a service territory of 25,000 squaremiles and at December 31, 2007, SWEPCohad 1,578 employees. The territory served bySWEPCo also includes several militaryinstallations, colleges, and universities. SWEPCO also owns and operates a lignitecoal mining operation. In addition to its AEP System interconnections, SWEPCo isalso interconnected with CLECO Corp., Empire District Electric Co., Entergy Corp.and Oklahoma Gas & Electric Co. SWEPCo is a member of SPP.PRINCIPAL INDUSTRIES SERVED:Oil and gas extractionPaper productsFood processingPrimary metalsPresident and Chief OperatingOfficer:Paul Chodak IIITotal Customers at 12/31/07:•Residential 394,500•Commercial 65,000•Industrial 7,000•Other 500Total467,000Generating Capacity 4,857 MWGenerating Capacity by Fuel Mix:•Coal: 38.0%•Natural Gas: 44.7%•Lignite: 17.3%Transmission Miles3,530Distribution Miles20,43646Debt Equity Total Debt Equity Total Debt Equity TotalCapitalization Per Balance Sheet 776,529 787,078 1,563,607936,929825,899 1,762,8281,199,068977,6522,176,720% of Capitalization Per Balance Sheet 49.7% 50.3% 100.0% 53.1% 46.9% 100.0% 55.1% 44.9% 100.0%Adjusted Capitalization 776,529787,078 1,563,607936,929825,899 1,762,8281,299,388977,6522,277,040% of Adjusted Capitalization 49.7% 50.3% 100.0% 53.1% 46.9% 100.0% 57.1% 42.9% 100.0%FFO Interest Coverage 3.8 5.9 3.5FFO Total Debt18.1%28.9%13.7%200520062007CAPITAL STRUCTURE(in thousands)CAPITAL STRUCTURERevenue1,483,000$% of AEP Retail11%Net Income66,000$Capital Expenditure505,000$2007 Financial Data *(in thousands)As of 9/30/08Total Assets4,126,456$Net Plant Assets 3,330,288$Cash2,752$2008 Asset Data **(in thousands)Sources: * 2007 Form 10-K** 3Q08 Form 10-Q (unaudited)Note: Capital Expenditure amounts exclude AFUDCSouthwestern Electric Power47Operating Information2007 retail electric sales in megawatt-hours17,287,2362007 firm wholesale sales in megawatt-hours5,771,986Average cost per kilowatt-hour (residential)7.52 cents2007 System Peak – August 144,924 MWGas346Tontitown, ArkansasMattison #1,2,3,4Gas897Avlinger, TexasWilkes #1,2,3Lignite580Hallsville, TexasPirkey #1(Own 86% and operate)Gas486Longview, TexasKnox Lee #2,3,4,5Gas50Lone Star, TexasLone Star #1Coal1,584Cason, TexasWelsh #1,2,3Lignite262Mansfield, LouisianaDolet Hills #1(Own 40%; operated by CLECO)Gas278Mooringsport, LouisianaLiberman #1,2,3,4Gas110Shreveport, LouisianaArsenal Hill #5Coal264Gentry, ArkansasFlint Creek #1(Own 50% and operate)FuelNominal Megawatt CapacityLocationNameSWEPCO Power Plants (Winter Capacity)12,331,76819,934,203Three-Year Average12,393,53812,180,78612,420,979Coal/Lignite Consumption (tons burned)19,673,05919,961,79820,167,754MWh Produced200720062005Production StatSouthwestern Electric Power Generation Production Statistics – 2005 – 2007Southwestern Electric Power48MAJOR CUSTOMERS:Lone Star Steel Company (TX)Big Three Industrial Gas (TX)UOP, LLC (LA)Domtar, Inc (AR)International Paper Company (TX)Pilgrim Pride Corporation (TX)Calumet Lubricants (LA)General Motors Corporation (LA)Libbey Glass Inc. (LA)Cooper Tire & Rubber Company (AR)Letourneau (TX)Superior Industries (AR)Tyson Foods, Inc. (AR)(data for year ended December 2007)SOUTHWESTERN INVESTOROWNED UTILITIES *TYPICAL BILL COMPARISON **262,428El Paso277,632SPSCo168,180SWEPCo382,202Entergy265,556CLECO1,140,194EntergyCustomersTexasCustomersLouisiana174,213SWEPCo681,298Entergy AR111,109SWEPCoCustomersArkansas•Top 10 customers = 54% of industrial sales•Metropolitan areas account for 74% of ultimate sales•80 persons per square mile (U.S. = 85)(data for 12 months ended December 2007)** Typical bills are displayed in $/month, based on 1,000 kWh of residential usage. Billing amounts sourcedfrom the EEI 2008 Typical Bills and Average Rates Report as of January 1, 2008.83.55SPSCo86.80Entergy LA65.56SWEPCo113.36112.9660.11$/monthEntergyEl PasoSWEPCoTexas115.08CLECO104.56Entergy Gulf St97.02Entergy AR101.20Entergy NO76.18Empire District66.39SWEPCo63.04OG&E$/monthLouisiana$/monthArkansas* Customer counts are as of December 31, 2006 and were sourced from table 10athttp://www.eia.doe.gov/cneaf/electricity/esr/esr_sum.htmlSouthwestern Electric Power49Total Customers at 12/31/07:(Based on electric meters)•Residential642,000•Commercial 104,000•Industrial5,000•Other2,000Total753,000Transmission Miles4,834Distribution Miles29,038AEP Texas Central CompanyAEP Texas Central Company (TCC)(organized in Texas in 1945) is engaged in the transmissionand sale of power to affiliatedand non-affiliated entitiesand the distribution of electric power to approximately753,000 retail customers through REPs in southern Texas,and (to a limited extent) insupplying and marketingelectric power at wholesale to other electric utilitycompanies and market participants. Under the Texas Act,TCC completed its exit from the generation businessthrough the sale of all of its generation assets. AtDecember 31, 2007, TCC had 1,195 employees. In additionto its AEP System interconnections, TCC is a member ofERCOT.PRINCIPAL INDUSTRIES SERVED:Oil and gas extractionFood processingPetroleum refiningChemicalsMAJOR CUSTOMERS:Valero Energy CorporationKoch Refinery WestFormosaJavelina RefineryEquistar Bay City(data for year ended December 2007)•Top 10 customers = 37% of industrialsales* ($)•Metropolitan areas account for 78%ultimate sales•57 persons per square mile (U.S. = 85)*Industrial % is in terms of wires revenues(data for 12 months ended December 2007)President and Chief OperatingOfficer:Pablo Vegas50Revenue809,000$% of AEP Retail7%Net Income59,000$Capital Expenditure222,000$2007 Financial Data *(in thousands)As of 9/30/08Total Assets5,131,177$Net Plant Assets 2,487,543$Cash203$2008 Asset Data **(in thousands)Debt Equity Total Debt Equity Total Debt Equity TotalCapitalization Per Balance Sheet 1,935,576953,570 2,889,1463,015,614411,0373,426,6512,937,553465,1153,402,668% of Capitalization Per Balance Sheet 67.0% 33.0% 100.0% 88.0% 12.0% 100.0% 86.3% 13.7% 100.0%Adjusted Capitalization1,269,995953,570 2,223,565661,806411,037 1,072,843665,544465,115 1,130,659% of Adjusted Capitalization57.1% 42.9% 100.0% 61.7% 38.3% 100.0% 58.9% 41.1% 100.0%FFO Interest Coverage1.42.03.7FFO to Total Debt2.6%13.0%24.8%CAPITAL STRUCTURE(in thousands)CAPITAL STRUCTURE200520062007Sources: * 2007 Annual Report** 3Q08 Financial Statements (unaudited)Note: Capital Expenditure amounts exclude AFUDCAEP Texas Central Company51AEP Texas North Company (TNC)(organized in Texas in 1927) is engaged in the generation,transmission and sale of power to affiliated and nonaffiliated entities and the distribution of electric power toapproximately 184,000 retail customers through REPs in westand central Texas, and in supplying and marketing electricpower at wholesale to otherelectric utility companies,municipalities, rural electric cooperatives and other marketparticipants. At December 31, 2007, TNC had 373employees. The territory served by TNC also includes severalmilitary installations and correctional facilities. In additionto its AEP System interconnections, TNC is a member ofERCOT.PRINCIPAL INDUSTRIES SERVED:Pipelines, except natural gasOil and gas extractionFood processingElectric equipmentStone, clay and glass productionPresident and Chief OperatingOfficer:Pablo VegasTotal Customers at 12/31/07:(Based on electric meters)•Residential 144,000•Commercial 30,000•Industrial 5,000•Other 5,000Total184,000Generating Capacity377 MWOklaunion Plant – Vernon, TX(excludes 270 MW of decommissioned plants)Generating Capacity by Fuel Mix:•Coal: 58.3%•Gas:40.5%•Oil:1.2%Transmission Miles4,522Distribution Miles13,772MAJOR CUSTOMERS:TXNZoltec CorporationTyson Foods, Inc.Kinder MorganEBAA Iron(data for year ended December 2007)•Top 10 customers = 37% industrialsales* ($)•Metropolitan areas account for 60%ultimate sales•8 persons per square mile (U.S. = 85)• Industrial % is in terms of wires revenues(data for 12 months ended December 2007)AEP Texas North Company52Debt Equity Total Debt Equity Total Debt Equity TotalCapitalization Per Balance Sheet 276,845 316,276593,121 276,936308,705 585,641 302,386 334,244 636,630% of Capitalization Per Balance Sheet 46.7% 53.3% 100.0% 47.3% 52.7% 100.0% 47.5% 52.5% 100.0%Adjusted Capitalization276,845316,276593,121 268,785308,705 577,490 303,682 334,244 637,926% of Adjusted Capitalization46.7% 53.3% 100.0% 46.5% 53.5% 100.0% 47.6% 52.4% 100.0%FFO Interest Coverage5.03.74.7FFO Total Debt29.8%17.4%21.2%200520062007CAPITAL STRUCTURE(in thousands)CAPITAL STRUCTURERevenue280,000$% of AEP Retail1%Net Income39,000$Capital Expenditure88,000$2007 Financial Data *(in thousands)As of 9/30/08Total Assets1,096,081$Net Plant Assets954,938$Cash214$2008 Asset Data **(in thousands)Sources: * 2007 Annual Report** 3Q08 Financial Statements (unaudited)Note: Capital Expenditure amounts exclude AFUDCAEP Texas North Company**Operating Company Overview** **Regulation Generation &** **Environmental** 

# Company Overview**Coal**

# 53 

# Regulation

Fall EEI 2008 • Regulatory Strategy

• Rate Case Filing Requirements

• Regulatory Activity Underway

• GridSMART Regulatory Status

• Rate Base and ROE by Operating Company

• Commission Overviews54Regulatory Strategy: Reduce LagThe strategy: reduce thetime between in-servicedates and rate recoveryMaximize frequency of filingsSeek ability to pro-forma both capital andO&M through date which rates are effectiveSingle-issue cost recoveryReliabilityVegetationEnvironmentalTrackersFederally-approved transmission costsFuel and emissionsERO compliance costsOff-system sales margin sharingFormula ratesReturn on CWIPOur goal is to maximize utility company cash flow and returnsby minimizing regulatory lag.55Summary of Rate Case Filing RequirementsRegulatory framework inherently produces recovery and return lag.Note 1: Post 1/1/09 no interim rates provided and rate cases must be filed no less than biennially; historical test year used.----See note 1------------15--Period of Limitation (months)NoNoYesNoNoNoNoNoNoYesNoTime Limitations Between CasesGeneralNotice of IntentYesNoNoNoYesLimitedNoYesNoNoNoPancaking Permitted?N/A306030453045N/A28Varies60Notice Period (days)NoYesYesYesYesYesOptionalNoYesYesYesPrior PSC Notice Required?ForecastOptionalHistoricalHistoricalHistoricalPartiallyProjectedPartiallyProjectedForecastOptionalHistoricalForecastOptionalHistoricalPartiallyProjectedTest YearCase Components--NoIndiana6YesKentucky10YesArkansasVariesYesMichigan--NoLouisiana6YesOklahoma9YesOhio5YesVirginia5YesTexas--NoWest VirginiaApprox # of Months after Filing toimplement rates subject to refundRates Effective Subject to RefundOtherYes2 or 7FERC56Regulatory Activity UnderwayAEP Ohio ESP FilingI&M - Indiana Base Rate CasePSO – Oklahoma Base Rate CaseAPCo - Virginia Base Rate CaseSWEPCo Stall Plant Filings in ArkansasSPP OATT Formula Rate FilingPJM OATT Formula Rate Filing57Regulatory Activity UnderwayOn July 31, 2008, in conjunctionwith the requirements of SB221, AEP Ohio filed an ElectricSecurity Plan with the PUCO on behalf of CSPCo and OPCo.The filing includes the following key components:Energy Efficiency and Demand ResponseRenewable EnergygridSMARTSMPhase 1Distribution Reliability EnhancementEconomic DevelopmentProvider of Last ResortThe proposed rate plan results in an annual increase ofapproximately 15 percent oncustomers’ total bills.The filing seeks to recover changes in fuel and environmentalexpenses relative to levelsreflected in current rates.Intervenor testimony was filed October 31, Staff testimony was filed November 7 and thepublic hearing commences on November 17, 2008.We anticipate an order in the first quarterof 2009.AEP Ohio Electric Security Plan Filing58Summary Rate Case InformationI&M Indiana General Rate CaseOn January 31, 2008, I&M filed a general base rate case with the Indiana Utility Regulatory Commission(IURC) requesting an increase of$125.6 million ($80.1 million inbase revenues and $45.6 million intracker mechanisms). (Docket #: 43306).Order is expected in June 2009.Projected Capital Structure – Company Position (9/30/07)Procedural Schedule% ofCapitalization Cost RateWeightedCostLong-Term Debt 43.53% 5.98% 2.60%Preferred Stock 0.27% 11.19% 0.03%Common Equity 45.80% 11.50% 5.27%Other Items10.40% various 0.20%Total100%8.10%Required Rate Relief – Company Position (9/30/07)($ in millions)January 31, 2008Case filedMay-June 2008Hearing presenting I&M Case-In-ChiefSeptember 2, 2008 Public & Intervenors' filing of Cases-In-ChiefOctober 15, 2008Filing of rebuttal by I&MDecember 1, 2008 Hearing presenting public and intervenors'Cases-In-Chief and I&M rebuttalRate Base1,999.1$ *Rate of Return8.10%Operating Income Requirement161.9$Pro-Forma Operating Income113.1$Difference48.8$Revenue Conversion Factor1.64Revenue Deficiency80.1$Reliability Enhancement Tracker28.4$DSM / EE Tracker4.4$Off-System Sales Margins Tracker(48.0)$PJM Tracker44.4$Environmental Compliance Tracker16.3$Total Required Rate Relief125.6$* rate base as of September 30, 2007, updated forvalue of plant additions to the hearing date of May 5,200859Summary Rate Case InformationPSO Oklahoma General Rate CaseOn July 11, 2008, PSO filed a general base rate case with the Oklahoma Corporation Commission (OCC)requesting an increase of $132.6 million. (Docket #: PUD 200800144). Order is expected in 1Q2009.Projected Capital Structure – Company Position(2/29/08)Procedural ScheduleRequired Rate Relief – Company Position (2/29/08)($ in millions)% ofCapitalization Cost RateWeightedCostLong-Term Debt 55.57% 6.60% 3.67%Preferred Stock 0.33% 4.02% 0.01%Common Equity 44.10% 11.25% 4.96%Total100%8.64%July 11, 2008Case filedOctober 29, 2008Staff and intervenor testimonyNovember 19, 2008 PSO rebuttal testimonyDecember 8, 2008 Hearing commencesJanuary 8, 2009Interim rates effective, subject to refund1Q 2009Final orderRate Base1,545.2$ *Rate of Return8.64%Operating Income Requirement133.5$Pro-Forma Operating Income53.0$Difference80.5$Revenue Conversion Factor1.647045Total Required Rate Relief132.6$* rate base as of February 29, 2008, updated forknown and measurable adjustment through August31, 200860Summary Rate Case InformationAPCo Virginia General Rate CaseOn May 30, 2008, Appalachian Powerfiled a general base rate casewith the SCC requesting anincrease of $207.9 million. Interim rates were effective on October28, 2008, subject to refund withinterest. On October 29, 2008, a settlementagreement was presented to the SCC for itsconsideration. The settlement allows for a revenueincrease of $168MM basedon a 10.2% ROE. Weawait a final order. (Docket #: PUE-2008-00046)Projected Capital Structure – Company Position (6/30/08)Procedural ScheduleRequired Rate Relief – Company Position (12/31/07)($ in millions)% ofCapitalization Cost RateWeightedReturnShort-Term Debt 2.97% 4.79% 0.14%Long-Term Debt 55.52% 6.35% 3.53%Preferred Stock 0.32% 4.35% 0.01%Common Equity 41.02% 11.75% 4.82%Other Items 0.17% 8.63% 0.02%Total 100% 8.52%May 30, 2008Case FiledSeptember 26, 2008Respondents TestimonyOctober 10, 2008Staff TestimonyOctober 20, 2008APCo Rebuttal TestimonyOctober 28, 2008Rates Effective, Subject to RefundOctober 29, 2008HearingsRate Base2,415.1$*Rate of Return8.52%Operating Income Requirement205.7$Adjusted Operating Income79.2$Difference126.5$Revenue Conversion Factor1.64Total Required Rate Relief207.9$* rate base as of December 31, 2007, updated forknown and measurable changes through June 30,200861Regulatory Activity UnderwayOn June 22, 2007, PSO and SWEPCo filedrevised tariff sheets for the AEP pricingzone of the SPP OATT.The revised tariff sheets seek to establish an up-to-date revenue requirement fortransmission services over the PSO and SWEPCo facilitates and implement atransmission cost of service formula rate.The new rate is a formula ratethat will be used to update the revenue requirementseach May, with new rates effective each July 1.The current revenue requirement is $88.7MM and the new revenue requirementrequested is $140MM. Approximately $10MM of the increase relates to 3rdparty andthe rest, if approved, would be recoveredthrough retail jurisdictional filings inSWEPCo and PSO, as appropriate.We requested an effective date of September 1, 2007 for the revised tariff, whichthe FERC suspended for an additional fivemonths, which extended the effective dateto February 1, 2008, with rates subject to refund.Settlement discussions are currently on-going.SPP OATT Formula Rate Filing(Docket #:ER07-1069-000)62Regulatory Activity UnderwayOn July 31, 2008, the seven AEP East companies filed with the FERC to update theOpen Access Transmission Tariff (OATT) rate and implement a formulatransmission rate that will be updated annually tokeep rates current withtransmission investment.The new rate is a formula rate thatwill be used to update the revenuerequirements each May, with new rates effective each July 1.The current revenue requirement is $507MM and the new revenue requirementrequested is $606MM. Approximately $31MM of the increase relates to 3rdpartyand Ohio and the rest, if approved,would be recovered through retailjurisdictional filings in the other east jurisdictions.We requested an effective date of October 1, 2008 for the revised tariff, whichthe FERC suspended for an additional five months, which extended the effectivedate to March 1, 2009, with rates subject to refund.PJM OATT Formula Rate Filing(Docket #:ER08-1329-000)63Regulatory Activity UnderwaySWEPCo Turk Plant FilingsArkansasOn December 8, 2006, SWEPCo filed with the Arkansas Public Service Commission anApplication for a Certificate of Environmental Compatibility and Public Need for theconstruction of a coal-fired baseload generating facility in Hempstead County, Arkansas.The PSC issued its order on November 21,2007, approving construction of the plant.Air permit anticipated in the fourth quarter of 2008.LouisianaOn August 25, 2006, SWEPCo filed with the Louisiana Public Service Commission an applicationto purchase, operate, own and install peaking, intermediate and baseload generatingfacilities. The peaking facilityhas been addressed and the intermediate facility has beenapproved. The remaining baseload facility issue relates to the Turk Plant proposed forHempstead County, Arkansas.The LPSC issued its order on April 29, 2008, approving construction of the plant.TexasOn February 20, 2007, SWEPCo filed with the Public Utility Commission of Texas a petitionseeking Certificate of Convenience and Necessityauthorization for a coal-fired power plant tobe located in southwest Arkansas.The PUCT issued its order approving constructionof the plant on August 12, 2008, with a costcap of $1.52 billion and a cap on carbon dioxide at $28/ton through 2030. This order iscurrently under appeal in Texas.64Regulatory Activity UnderwaySWEPCo Stall Plant FilingsArkansasProceeding is pending.LouisianaOn August 25, 2006, SWEPCo filed with theLouisiana Public Service Commission anApplication to purchase, operate, own and install Peaking, Intermediate andBaseload Generating Facilities. The intermediate facility, known as the Stall Plantand sited in Shreveport, LA, was bifurcated from the original filing and had aprocedural schedule established on January 9, 2008.PSC approval was granted on September 10, 2008.Air permit received on March 20, 2008.TexasPUCT order approving plantwas issued on March 8, 2007.65State PolicyAEP Action PlansgridSMARTSMEvolution – AEP EastSSB 221 provides targets and provisions forDSM/EE programs and supports infrastructuremodernization.Filed an Electric Security Plan (2008) whichincludes a model city pilot in NE Columbus andaddresses DSM/EE programs. New 2 MW NaSbattery in Bluffton will demonstrate use ofstorage to enhance a sub-transmission system.Pending DSM filing in Indiana; rules beingfinalized. EE/DSM legislative goals recentlyestablished in Michigan.Broadly focused South Bend Pilot includes AMI,distribution automation, demand response, prepaid meters. NaS battery installation in IN in2008 to demonstrate storage with intermittentwind.Kentucky’s commission rules regardingDSM/EE programs are the model we seek inother states.Existing programs are focused on low-incomeweatherization and heat pump programs formobile homes with favorable recovery. AMRinvestment will defer new AMI for several years.Legislative interest in Virginia beginning todrive regulatory activity in EE/DSM.New 2 MW NaS battery in West Virginia will testdynamic islanding – supplying electricity whiledisconnected from the grid. AMR investments inVirginia and West Virginia will defer new AMI forseveral years. EE/DSM potential study initiated.The eastern states are evolving in their positions regarding demand side management,energy efficiency and AMI investments.66State PolicyAEP Action PlansgridSMARTSMEvolution – AEP WestDSM proceedings currently underway. Heavilyinvolved with Commission regarding rulemaking.Favorable recovery provisions proposed.Current legislation allows concurrent costrecovery of DSM/EE programs and performanceincentives for exceeding goals. Legislatureexpecting distribution service providers inERCOT to file plans for smart meter deployment.DSM/EE program costs are recoverable thru arider in Texas and Arkansas and base rates inLouisiana. No current statutory support for AMIoutside of Texas footprint.Implementing aggressiveEE/DSM programs toachieve targets of 15% and 20% (respectively)to reduce growth in demand in 2008 & 2009in Texas. Continue quick-start DSM/EE inArkansas. Submitted EE Potential Study toLouisiana Commission in October 2008.Conducting Distribution Automation pilot inSouth Tulsa. In process of implementingquick start DSM/EE programs.Implementing aggressiveDSM/EE programs toachieve legislatively mandated targets of 15%and 20% to reduce growth in demand in 2008& 2009 respectively. A deployment plan forsmart meters was initiated as of 10/31/08.Texas currently has the most progressive legislative stance with regards to supportingAMI. PSO and SWEPCo have active DSM/EEprograms with Distribution Automationpilots proposed in each state.67Approved Rate Bases & ROEs and Current Rate Case RequestsJurisdictionRequested Rate BaseRequested ROEI&M - Indiana$1,999MM11.50%PSO - Oklahoma$1,545MM11.25%APCO - Virginia$2,415MM11.75%Rate Case Requests on FileJurisdictionRate Base Approved ROE Effective DateAPCo-Virginia$2,022MM 10.00%10/2/2006APCo-West Virginia$1,656MM 10.50%7/28/2006Kentucky$858MM 10.50%3/31/2006I&M-Indiana$1,805MM 12.00%11/19/1993I&M-Michigan$268MM 13.00%4/1/1991PSO-Oklahoma$1,120MM 10.00%10/9/2007SWEPCo-Louisiana$577MM 10.565% *8/1/2008SWEPCo-Arkansas$408MM 10.75%9/23/1999SWEPCo-Texas$474MM 15.70%2/15/1983TCC-Texas$1,566MM 9.96%6/1/2007TNC-Texas$530MM 9.96%6/1/2007* - represents midpoint of the ROE range approved in the formula rate casesettled in April 2008.68Commission OverviewArkansas Public Service CommissionSouthwestern Electric Power Co.AEP Regulated Electric UtilitiesDaryl E. Bassett, Commissioner (Rep.),since 2003; current term ends in 2009. Former policy advisor for Governor. Governor’s state budget director(2002-2003). Investment Banker for First State Investments/Merrill Lynch Fenner and Pierce (1985-1995). Bachelor’s attained at Harding University(Business-Public Administration).Collette Honorable, Commissioner (Dem.),since 2008; current term ends in 2011. Commissioner Honorable is a member of NARUC and serves on theElectricity and Consumer Affairs Committees. She also serves on the Smart Grid Collaborative, a joint effort of NARUC and the FERC. Honorable obtainedher Juris Doctorate from the University of Arkansas at Little Rock School of Law.Paul Suskie, Chairman (Dem.),since 2007; current term ends in 2013. Lawyer, North Little Rock, Arkansas City Attorney. Bachelor’s attained atUniversity of Central Arkansas. Juris Doctorate at University ofArkansas at Little Rock Schoolof Law. NARUC member including Committee on EnergyResources and the Environment and Committee on Consumer Affairs.CommissionersThe Arkansas Public Service Commission (APSC) is composed of 3 members. The Governor appoints the Commissioners as well as theChairman. GovernorHuckabee has appointed all of the current commissioners.Qualifications for CommissionersPolitical Makeup: R: 1 D: 2Term: 6 YearsAppointed/Elected: AppointedNumber: 3CommissionersSWEPCo-AR provides service at regulated bundled rates in Arkansas.Arkansas has an active fuel pass-through clause. Arkansashas an OSS margin sharingmechanism and allows CWIP in ratebase for a plant that is placed in service within six months after the end of the test year.AEP Regulatory Status69Indiana Utility Regulatory CommissionCommission OverviewIndiana Michigan Power Co.AEP Regulated Electric UtilitiesGreg Server, Commissioner (Rep.),since 2005; current term ends 2009. Former state senator since 1981 and before that served in the Indiana House ofRepresentatives from 1972 to 1980. Served as chair of Senate Commerce Committee, which handled IURC and utility industry legislation. Served asDirector of Administration for the Evansville Water and Sewer Utility. Masters degrees in political science and counseling from Indiana State University.David E. Ziegner, Commissioner (Dem.),since 1990; current term ends April 2011. Lawyer, staff attorney for Legislative Services Agency, General Counselfor IURC. Member, NARUC Committee on Electricity and Advisory Council of the Electric Power Research Institute. Law degree from the Indiana UniversitySchool of Law in Indianapolis.Larry S. Landis, Commissioner (Rep.),since 2002; current term ends June 2011. Former president of a marketing and communications agency, VPCorporate Advertising, American Fletcher National Bank. Bachelor’s degrees in political science and economics.Jeffrey L. Golc, Commissioner (Dem.),since 2007; current term will expire in 2009. Former public affairs manager for the Kroger Company. PreviousDeputy Commissioner for the Indiana Bureau of Motor Vehicles and the Indiana Department of Workforce Development. Bachelors andMasters degrees incommunications from Indiana University.David L. Hardy, Chairman (Rep.),since 2005; current term will expire April 2010. Commissioner Hardy is an attorney who has worked in private practicesince 1997. Areas of expertise include negotiation, contracts, litigation, finance and administration. He has 35 years of regulatory experience at the stateand federal levels. Bachelors degree and law degree from Indiana University.CommissionersFive members, appointed by the Governor from among persons nominated by a legislatively mandated utility commission nominatingcommittee; four-year,staggered terms, full-time positions. Not more than three of the members of the IURC shall be members of the same political party. At least one of thecommissioners must be an attorney qualifiedto practice law before the Indiana SupremeCourt. The Governor appoints one of thefive as chairman.Republican Mitch Daniels was elected Governor on November 2, 2004.Qualifications for CommissionersPolitical Makeup: R: 3 D: 2Term: 4 YearsAppointed/Elected: AppointedNumber: 5CommissionersI&M provides retail electric service in Indiana at bundled rates approved by the IURC. Rates are set on a cost-of-service basiswith a fuel recoverymechanism. A current full base rate case is in process with a final order expected in the first half of 2009. The rate case includes requests for ridersrelated to DSM, environmental, reliability, OSS and RTO costs.AEP Regulatory Status70Commission OverviewKentucky Public Service CommissionKentucky Power Co.AEP Regulated Electric UtilitiesKPCo provides service at regulated bundledrates in Kentucky. Kentucky has an environmental surcharge to recover approved environmental costs and ithas an active fuel clause. Kentucky also has an OSS sharing mechanism and a monthly adjustment clause in place for DSM.AEP Regulatory StatusJames W. Gardner, Commissioner (Rep.),since 2008; current term expires June 2012. Prior to joining the PSC Mr. Gardner was a partner at the law firmHenry Watz Gardner & Sellars PLLC where he specialized in bankruptcy law. JD degree from the University of Kentucky College ofLaw.John W. Clay, Vice Chairman (Rep.),since 2006; current term expires June 2009. Former deputy secretary of the Kentucky Environmental and PublicProtection Cabinet. Served as executive director of the Office of Alcohol Beverage Control in the Department of Public Protection. B.A. from GeorgetownCollege. Certified Public Accountant and member of the AICPA.David L. Armstrong, Chairman (Dem.),since 2008; current term expires June 2011. Former practicing attorney in private practice. J.D. from University ofLouisville Brandeis School of Law. Mr. Armstrong is also the former Mayor for the city of Louisville, KY (1999-2003).CommissionersTypically three members, appointed by the governor and confirmed by the state senate for four years, staggered terms, full-timepositions. The governorappoints one of the three as chairman and another of the three asvice chairman to serve in thechairman’s absence. Not more than two members of theKYPSC shall be of the same profession or occupation.Qualifications for CommissionersPolitical Makeup: R: 2 D:1Term: 4 YearsAppointed/Elected: AppointedNumber: 3Commissioners71Louisiana Public Service CommissionCommission OverviewSouthwestern Electric Power Co.AEP Regulated Electric UtilitiesLambert C. Bossiere, III (Dem.),since 2005; current term ends December 2010. B.S. Business Administration from Southern University. AmericanUniversity of Paris – International Trade Law – Paralegal Certificate. Former First City Court Constable for the City of New Orleans. Member of NARUC.C. Dale Sittig, (Dem.),since 1995; current term ends December 2010. Member, Louisiana House of Representatives, (1983-1995). Member, Chamber ofCommerce.James M. Field, (Rep.),since 1996; current term ends December 2012. Practicing attorney, member of Electrical Committee of NARUC. NFL contractadvisor (1983-present), member, Sports Lawyers Association. Bachelor’s and Juris Doctorate from Louisiana State University.Foster L. Campbell, (Dem.),since 2003; current term ends December 2008. Member, Louisiana State Senate (1976-2002). Independent insurancebusinessman and farmer, former school teacher and agricultural products salesman.Bachelor’s degree from Northwestern State University.Jack A. Blossman, Jr. (Rep.),since 1997; current term ends December 2008. Practicing attorney, member of NARUC Gas Committee. Board member ofParish National Bank, member, Lake Ponchartrain Basin Foundation. Juris Doctorate from Southern Law School.CommissionersThe Louisiana Public Service Commission (LPSC) is composed offive elected members. The commissioners serve overlapping termsof six years.Qualifications for CommissionersPolitical Makeup: R: 2 D: 3Term: 6 YearsAppointed/Elected: ElectedNumber: 5CommissionersSWEPCo-LA provides service at regulated bundled rates in Louisiana. Louisiana has anactive fuel pass-through clause and an OSS margin sharingmechanism. Formula rate plans are permitted in Louisiana including a potential for a partial CWIP return on new generation projects. A formula rate planwas implemented August 1, 2008.AEP Regulatory Status72Michigan Public Service CommissionCommission OverviewIndiana Michigan Power Co.AEP Regulated Electric UtilitiesMonica Martinez, Commissioner, (Dem.),since 2005; current term expires July 2011. Former Deputy Director of the Governor’s Legislative Affairs Divisionwhere she served as the Governor’s principal lobbyist. Previous tothis, she served as an analyst for the Senate Democratic Office, where she specialized intechnology and energy, human services and family law policy issues. Bachelor’s degree, University of Michigan.Steven A. Transeth, Commissioner, (Ind.) ,since 2007; current term expires July 2009. Former assistant director and legal counsel for the MichiganLegislative Service Bureau, which included drafting legislationand providing legal counsel to the Michigan Senate and House ofRepresentatives. Lawyer,private practice and with the Ingham County Prosecuting Attorney’s office.. J.D. from Thomas Cooley Law School.Orjiakor N. Isiogu, Chairman (Dem.),since 2007; current term expires July 2013. Former Director of the Telecommunications Division of the MPSC.Assistant Attorney General in Michigan since 1989. Undergraduate and law degree from Wayne State University.CommissionersThe Michigan Public Service Commission (MPSC) is composed of three members appointed by the Governor with the advice and consent of the Senate.Commissioners are appointed to serve staggered six-year terms. Nomore than two commissioners may represent the same politicalparty. Onecommissioner is designated as chairman by the Governor.Qualifications for CommissionersPolitical Makeup: D: 2 I: 1Term: 6 YearsAppointed/Elected: AppointedNumber: 3CommissionersCustomer choice began January 2002. Generation was not deregulated. Retail rates were unbundled (though they continue to be regulated) to allowcustomers to evaluate generation costs. Michigan has an activefuel clause and return on CWIPcan be included in base rates.AEP Regulatory Status73Ohio Public Utilities CommissionCommission OverviewOhio Power Co.Columbus Southern Power Co.AEP Regulated Electric UtilitiesOn January 26, 2005, the PUCO approved Rate Stabilization Plans (RSP) for CSP and OPCo (the Ohio Companies). The plans provided, among other things,for CSP and OPCo to raise their generation rates by 3% and 7% respectively, in 2006, 2007 and 2008 and provided for additionalgeneration rate increases ofup to 4% per year based on the Ohio Companies supporting the need for additional revenues. Distribution rates in effect at 12/31/05 are frozen for OPCoand CSP until 12/31/08. Transmission rates are currently regulated by FERC as reflected in the OATT. SB221 allows that CSP andOPCo will have active fuelclauses effective January 1, 2009. An Electric Security Plan is currently on file with the PUCO for consideration before the end of 2008. The ESP requests a15% rate increase for all CSP and OPCo customers.AEP Regulatory StatusValerie A. Lemmie, Commissioner, (Ind.)since 2006; term expires April 2011. Master’s degree in Urban Affairs and Public Policy Planning, WashingtonUniversity. Served as city manager for Cincinnati, Dayton, andPetersburg, Va. Scholar-in-residence at the Kettering Foundation. Chair of the Board ofDirectors of the National Academy of Public Administration.Cheryl Roberto, Commissioner, (Dem.)since 2008; term expires April 2013. Prior to joining the PUC, Roberto was director of the City of Columbus PublicUtilities Department. Before entering the public sector, Commissioner Roberto worked as an assistant attorney general for the state of Ohio.Commissioner Roberto received her B.A. with honors from Kent State University and her Juris Doctorate from the Moritz College of Law at The Ohio StateUniversity.Ronda Hartman Fergus, Commissioner, (Rep.)since 1995; term expires April 2010. Lawyer, Ohio State; previously served on the PUCO staff as anadministrative law judge in the Legal Department. Later servedas the chief of Telecommunications, Water and Sewer Section ofthe Legal Department,and then chief of the Telecommunications Technical Staff. Member NARUC Committee on Consumer Affairs.Paul A. Centolella,Commissioner, (Dem.)since 2007; term expires April 2012. Juris Doctor from the University of Michigan. From 1992-2007, worked as asenior economist in the Energy Solutions Group of Science Applications International Corporation. Former senior policy advisorand senior utility attorneyfor the Office of the Ohio Consumers’ Counsel.Alan R. Schriber, Ph.D., Chairman, (Ind.), since 1999; term expires April 2009. Economics professor, president of a radio broadcasting company,investment advisor. Previously served as commissioner on the PUCO from 1983-1989. Member NARUC Telecommunications Committee, National Governors’Association Electricity Task Force, Harvard Electricity Policy Group.CommissionersFive members, appointed by the governorand confirmed by the state senate; five year, staggered terms, full-time positions, commissioners shall beselected from the lists of qualified persons submitted to the governor by the PUC nominating council. Not more than three of the members of the PUCOshall be members of the same political party. The governor appoints one of the five as president, who serves at the pleasure of the governor until asuccessor has been designated.Qualifications for CommissionersPolitical Makeup: R: 1 D: 2 I: 2Term: 5 YearsAppointed/Elected: AppointedNumber: 5Commissioners74Commission OverviewOklahoma Corporation CommissionPublic Service Company of OklahomaAEP Regulated Electric UtilitiesBob Anthony, Commissioner, (Rep.),since 1989; current term expires January 2013. Member, NARUC. Served on the boards of the Oklahoma State,Oklahoma City, and South Oklahoma City chambers of commerce. Earned a M.Sc. from the London School of Economics, a M.A. from Yale University and anM.P.A. from the Kennedy School of Government at Harvard University.Jim Roth, Commissioner, (Dem.),since 2007;appointed by the governor to fill the seat opened by the resignation of Commissioner Bode; current term endsJanuary 2011. Previously served various county governments for eight years. Juris Doctorate from Oklahoma City University School of Law.Jeff Cloud, Chairman (Rep.),since 2002; current term ends January 2009. Member, NARUC. Served as U.S. Congressman’s District Director. Served as theOklahoma City Mayor’s Chief of Staff. Law degree from Oklahoma City University.CommissionersThe Oklahoma Corporation Commission (OCC) is composed of three commissioners who are elected by state-wide vote. Commissionersserve staggered sixyear terms so one commissioner vacancy occurs every two years. The election pattern was established when the Commission was created by the stateconstitution.Qualifications for CommissionersPolitical Makeup: R: 2 D: 1Term: 6 YearsAppointed/Elected: ElectedNumber: 3CommissionersPSO provides retail electric service in Oklahoma at bundled rates approved by the OCC. PSO’s rates are set on a cost-of-service basis. Fuel and purchasedenergy costs above the amount included in base rates are recovered by applying a fuel adjustment factor to retail kilowatt-hoursales. The factor isgenerally adjusted annually and is based upon forecasted fuel and purchased energy costs. Over or under collections of fuel costs for prior periods arereturned to or recovered from customers when new annual factorsare established. PSO has an OSS margin sharing mechanism and has rider mechanismscurrently approved for vegetation management and the new peaking facilities in-service in 2008.AEP Regulatory Status75Commission OverviewTennessee Regulatory AuthorityKingsport Power Co.AEP Regulated Electric UtilitiesNo deregulation legislation and no base rate freeze or cap. Tennessee has an active fuel clause.AEP Regulatory StatusMary W. Freeman, Director (Dem.),since 2008; current term expires June 2011. Prior legislative director for Governor Bredesen, executive assistant toState Representative Lois DeBerry. B.A. Tennessee State University.Eddie Roberson, Ph.D, Director, (Dem.),since 2006; current term expires June 2010. Former Chief of Consumer Services Division of the RegulatoryAuthority; also served a year as the agency’s Executive Director. Served two terms on the Chattanooga City School Board. Ph.D in Public Administrationfrom Tennessee State University.Sara Kyle, Director (Dem.),since 1996; current term expires June 2012. Former assistant public defender until she was elected to the Memphis City Courtbench. The longest serving director and only holdover from the previous Regulatory Authority. Law degree from Middle Tennessee State University.Tre Hargett, Chairman (Rep.),since 2008; current term expires 2012. Former Representative of House District 97. M.B.A. Memphis State University.CommissionersThe Tennessee Regulatory Authority (TRA) directors are appointed, one each, by the Governor, Lieutenant Governor (as Speaker ofthe Senate), Speaker ofthe House and one joint appointment by the three together, andare confirmed by the Tennessee General Assembly. The directorsare appointed for sixyear terms, which all expired in June 2008; terms are now staggered.Qualifications for CommissionersPolitical Makeup: R:1 D: 3Term: 6 YearsAppointed/Elected: AppointedNumber: 4Commissioners76Commission OverviewPublic Utility Commission of TexasTexas Central Co.Texas North Co.Southwestern Electric Power Co.AEP Regulated Electric UtilitiesRetail competition has been delayed by the PUCT in the SPP areaof Texas (including SWEPCO). SWEPCO-TX has an active fuel pass-through clause as wellas OSS margin sharing. In some circumstances, CWIP is allowed in rate base.TCC and TNC provide retail transmission and distribution service on a cost-of-service basis at rates approved by the PUCT and wholesale transmissionservice under tariffs approved by the FERC consistent with PUCTrules. Transmission riders provide annual recovery dependent on the level of transmissioninvestment and ERCOT load growth rates. AFUDC is permitted in limited circumstances.AEP Regulatory StatusKenneth W. Anderson, (Rep.)since September 2008; current term expires September 2011. Past Director of Governmental Appointments under GovernorPerry. Prior to that Anderson served in private practice as a corporate attorney inthe area of securities law and regulatorymatters. He also served as amember of the Texas Securities Board from 1999-2006. Anderson holds a law degree from Southern Methodist University.Donna Nelson, Commissioner (Rep.),since August 2008; current term expires August 2009. Nelson served as a special assistant and advisor to GovernorPerry on energy, telecommunications and cablebudget and policy issues. She previously served as director of the PUC telecommunication's section and legaladvisor to the PUC chairman. Nelson holds a law degree from Texas Tech University.Barry T. Smitherman, Chairman, (Rep.),since April 2004; current term expires August 2013. Attorney; Assistant DA; Public Finance Investment Banker.Received law degree from the University of Texas School of Law.CommissionersTo be eligible for appointment, a commissioner must be: (1) a qualified voter; (2) a citizen of the United States; and (3) a representative of the generalpublic. Chairman appointed by the Governor.Qualifications for CommissionersPolitical Makeup: R: 3Term: 6 YearsAppointed/Elected: AppointedNumber: 3Commissioners77Commission OverviewVirginia State Corporation CommissionAppalachian Power Co.AEP Regulated Electric UtilitiesJames C. Dimitri (Dem.),since 2008; current term expires 2014. Prior to being named Commissioner, Dimitri was in private practice in Richmond. From1994 to 2000 he served as Senior Counsel, then General Counsel atthe SCC. He was an assistant Attorney General from 1983 to 1987. Dimitri received hisundergraduate degree in economics from the University of Virginiaand his J.D. from the Boston University School of Law in 1976.Mark C. Christie (Rep.),since 2004; current term expires 2010. Attorney, counsel to the Speaker of the House. Lawyer, private practice. Law degreefrom Georgetown.CommissionersJudith Williams Jagdmann, Chairperson, (Rep.),since 2006; current term expires 2012. Law degree from T.C. Williams School of Law at the University ofRichmond. Served as Deputy Attorney General for Civil Litigation Division from 1998 to 2005. Attorney General for Commonwealth of Virginia from 2005 to2006.The Virginia State Corporation Commission (VSCC) is composed of three members elected by the General Assembly. Commissioners are elected to serve sixyear terms, staggered in two year increments. The chair rotates annually among the three commissioners on February 1.Qualifications for CommissionersPolitical Makeup: R: 2 D: 1Term: 6 YearsAppointed/Elected: ElectedNumber: 3CommissionersAPCo-VA provides retail electric service in Virginia at unbundled rates. In 2007, the General Assembly passed legislation re-establishing retail rateregulation in the Commonwealth. The opportunity for one rate case exists before December 31, 2008, which was filed May 30, 2008. The new legislationprovides for biennial rate reviews beginning in 2009, sharing of off-system sales margins at a rate of a minimum of 25% retainedby the company effectiveJuly 1, 2007 and a post-2008 rider for DSM, renewable programs and new generation. APCo-VA is entitled to annual rate changesto recover theincremental costs it incurs for transmissionand distribution system reliability and compliance with state or federal environmental laws or regulations(known as the E&R rider). APCo-VA is entitled to adjustments to fuel rates to recover its actual fuel costs, the fuel component of its purchased power costsand certain capacity charges.AEP Regulatory Status78Commission OverviewPublic Service Commission of West VirginiaWheeling Power Co.Appalachian Power Co.AEP Regulated Electric UtilitiesJon W. McKinney, Commissioner (Dem.),since 2005; term expires June 2011. Currently on the board of directors of the NARUC and second VP of the MidAtlantic Conference of Regulated Utilities Commissioners. Formerly served as plant manager of Flexsys’ Nitro, W .V. operations, chairman of ChemicalIndustry Committee for W.V., board member of W.V. Chamber of Commerce, W.V. Manufacturer’s Association, Chemical Alliance Zone,W.V. Roundtable,Advantage Valle, St. Francis Hospital & Thomas Memorial Hospital.Michael A. Albert, Chairman (Rep.),since 2007; term expires June 2013. Served as a member in the Business Law Department of Jackson Kelly. Presidentand Chairman of the board of directors ofthe Kanawha County Public Library. Bachelor’s degree and Doctorate of Jurisprudence,West Virginia University.Edward H. Staats, Commissioner (Dem.),since 2003; term expires June 2009. Former Chief of Operations in the Governor's office. Former Chief FinancialOfficer of the Workers’ Compensation Division of the W.V. Bureau of Employment Programs. Certified Public Accountant in West Virginia and Georgia.Bachelor’s degree, West Virginia University.CommissionersThe West Virginia Public Service Commission(WVPSC) consists of three members, appointed by the Governor, with the advice and consent of the senate.No more than two members of the commission may belong to the same political party. The Commissioners serve six year staggered terms, with one termexpiring as of July 1 of each odd numbered year. One Commissioneris designated as Chairman ofthe Commission by the Governor.The Chairman serves asthe chief fiscal officer of the Commission.Qualifications for CommissionersPolitical Makeup: R:1 D: 2Term: 6 YearsAppointed/Elected: AppointedNumber: 3CommissionersAPCo and Wheeling Power in WV provide retail electric service at bundled rates approved by the WV PSC. West Virginia has an active annual ENEC(Expanded Net Energy Cost) mechanism, which provides for a rateadjustment for fuel costs, among other items. West Virginia also has a specialconstruction surcharge permitted, primarily related to environmental-related construction.AEP Regulatory Status**Operating Company Overview** **Regulation Generation &** **Environmental** 

# Company Overview**Coal**

# 79 

# Generation &

Environmental

Fall EEI 2008 • Units

• Generation Statistics

• New Generation

• Environmental

• Future Potential Green House Gas Regulations

# 80 

# Domestic Generation

COMPANY MW Capacity

AEP Generating Co 2,466

Appalachian Power Co 6,290

Columbus Southern Power 3,701

Indiana Michigan Power Co 4,501

Kentucky Power Co 1,060

Ohio Power Co 8,478

Public Service of Oklahoma 4,581

Southwestern Electric Power Co 4,857

Texas North Co** 647

OVEC Capacity*** 986

Domestic IPPs 311

Wind Purchase Power Agreements 843

Total 38,721

** Includes 270 MW of mothballed / retired / decommissioned generation

*** AEP owns a 43.5% interest in Ohio Valley Electric Corporation (OVEC), which

supplies the power requirements of a uranium enrichment plant near Portsmouth, Ohio,

owned by the DOE. 

# Generation Capacity*

*Capacity amounts represent the nominal capacity (the number of MW expected to be

produced on a routine basis).

# 81 

# Domestic Generation

Note: RFC regional reliability council was formerly known as ECAR Plant Name Units State Regional

Reliability

Council Fuel Type Nominal

Capacity

(MW)

AEP Generating Company

Rockport 1 IN RFC Steam - Coal 1,320

Lawrenceburg 6 IN RFC 1,146

2,466

Appalachian Power Company

Buck 3 VA RFC Hydro 5

Byllesby 4 VA RFC Hydro 8

Claytor 4 VA RFC Hydro 28

Leesville 2 VA RFC Hydro 9

London 3 WV RFC Hydro 12

Marmet 3 WV RFC Hydro 11

Niagara 2 VA RFC Hydro 1

Reusens 5 VA RFC Hydro 6

Winfield 3 WV RFC Hydro 15

Smith Mountain 5 VA RFC Pumped Storage 586

Amos 2 WV RFC Steam - Coal 2,033

Clinch Rive r 3 VA RFC Steam - Coal 705

Glen Lyn 2 VA RFC Steam - Coal 335

Kanawha Rive r 2 WV RFC Steam - Coal 400

Mountaineer 1 WV RFC Steam - Coal 1,320

Sporn 2 WV RFC Steam - Coal 300

Ceredo 6 WV RFC Natural Gas 516

6,290

Columbus Southern Power Company

Beckjord (CCD) 1 OH RFC Steam - Coal 53

Conesville (CCD) 4 OH RFC Steam - Coal 1,254

Picway (CCD) 1 OH RFC Steam - Coal 100

Stuart (CCD) 4 OH RFC Steam - Coal 604

Stuart (CCD) 4 OH RFC Oil 3

Zimmer (CCD) 1 OH RFC Steam - Coal 330

Waterford 4 OH RFC Natural Gas 850

Darby 6 OH RFC Natural Gas 507

3,701

Indiana Michigan Power Company

Berrien Springs 12 MI RFC Hydro 5

Buchanan 10 MI RFC Hydro 2

Constantine 4 MI RFC Hydro 1

Elkhart 3 IN RFC Hydro 2

Mottville 4 MI RFC Hydro 1

Twin Branch 6 IN RFC Hydro 4

Rockport 1 IN RFC Steam - Coal 1,300

Tanners Creek 4 IN RFC Steam - Coal 995

Cook 2 MI RFC Steam - Nuclea r 2,191

4,501

# 82 

# Domestic Generation

Note: RFC regional reliability council was formerly known as ECAR Plant Name Units State Regional

Reliability

Council Fuel Type Nominal

Capacity

(MW)

Kentucky Power Company

Big Sandy 2 KY RFC Steam - Coal 1,060

Ohio Power Company

Racine 2 OH RFC Hydro 26

Amos 1 WV RFC Steam - Coal 867

Cardinal 1 OH RFC Steam - Coal 580

Gavin 2 OH RFC Steam - Coal 2,640

Kammer 3 WV RFC Steam - Coal 630

Mitchell 2 WV RFC Steam - Coal 1,560

Muskingum River 5 OH RFC Steam - Coal 1,425

Sporn 3 WV RFC Steam - Coal 750

8,478

# 83 

# Domestic Generation

Plant Name Units State Regional

Reliability

Council Fuel Type Nominal

Capacity

(MW)



# Public Service Company of Oklahoma

Tulsa 3 OK SPP Steam - Natural Gas 415

Tulsa 3 OK SPP Oil 8

Riverside 2 OK SPP Steam - Natural Gas 928

Riverside 2 OK SPP Steam - Natural Gas 150

Riverside 1 OK SPP Oil 3

Northeastern (1&2) 4 OK SP P Steam - Natural Gas 940

Northeastern 1 OK SPP Oil 3

Sothwestern 3 OK SPP Steam - Natural Gas 475

Sothwestern 2 OK SPP Steam - Natural Gas 150

Sothwestern 1 OK SPP Oil 2

Comanche 3 OK SPP Steam - Natural Gas 285

Comanche 2 OK SPP Oil 4

Weleetka 3 OK SPP Steam - Natural Gas 195

Weleetka 2 OK SPP Oil 4

Northeastern (3&4) 2 OK SPP Steam - Coal 910

Northeastern 1 OK SPP Oil 1

Oklaunion 1 TX ERCOT Steam - Coal 108

4,581

Southwestern Electric Power Company

Arsenal Hill 1 LA SPP Steam - Natural Gas 110

Lieberman 4 LA SPP Steam - Natural Gas 278

Knox Lee 4 TX SPP Steam - Natural Gas 486

Wilkes 3 TX SPP Steam - Natural Gas 897

Lone Sta r 1 TX SPP Steam - Natural Gas 50

Mattison 4 A R SPP Steam - Natural Gas 346

Welsh 3 TX SPP Steam - Coal 1,584

Flint Creek 1 A R SPP Steam - Coal 264

Pirkey 1 TX SPP Steam - Lignite 580

Dolet Hills 1 LA SPP Steam - Lignite 262

4,857

# 84 

# Domestic Generation

Plant Name Units State Regional

Reliability

Council Fuel Type Nominal

Capacity

(MW)

Texas Central Company

none

Texas North Company

Paint Creek (Retired) 4 TX ERCOT Steam - Natural Gas 238

Abilene (Retired) 1 TX ERCOT Steam - Natural Gas 18

Ft. Stockton (Decommissioned) 1 TX ERCOT Steam - Natural Gas 6

Vernon (Decommissioned) 4 TX ERCOT Oil 8

Oklaunion 1 TX ERCOT Steam - Coal 377

647

Domestic Independent Power Projects

Trent Mesa 100 TX ERCOT Wind 150

Desert Sky 107 TX ERCOT Wind 161

311

Long-Term Wind Purchase Power Agreements

Southwest Mesa TX ERCOT Wind 75

Weatherford OK SPP Wind 147

Blue Canyon II OK SPP Wind 151

Sleeping Bear OK SPP Wind 95

Camp Grove IL RFC Wind 75

Fowler Ridge IN RFC Wind 100

Fowler Ridge IN RFC Wind 100

Beech Ridge WV RFC Wind 100

84385Generation Statistics* Super-critical includes coal units with a net maximum capacity of 450MW orgreater; sub-critical includes coal units with a net maximum capacity less than450MW.** Includes all AEP owned Hydroand Pumped Storage generation.*** CF, EAF, and EFOR do not include Dolet Hills. Dolet Hills included ingeneration number as owned. Pirkeyand Flint Creek reported as owned.  Oklaunion reported as owned.** *** East Gas Units evaluated using Equivalent Forced Outage Factor. Sincethese units are run less frequently, thisfactor gauges their performance basedon Period Hours instead of Service Hours. EFOR uses Service Hours in thedenominator, and EFOF uses Period Hours in the denominator.Net CapacityFactors2006 2007EquivalentAvailabilityFactors2006 2007EquivalentForced OutageRate (EFOR)2006 2007AEP East64.57% 64.26%AEP East81.80% 81.09%AEP East8.54% 8.32%Coal70.34% 71.89%Coal80.29% 78.73%Coal9.37% 9.02%Super Critical*73.36% 73.00%Super Critical*80.55% 77.93%Super Critical*8.31% 8.81%Sub-Critical*61.00% 68.44%Sub-Critical*79.49% 81.23%Sub-Critical*12.63% 9.62%Gas2.58% 7.27%Gas92.84% 90.19%Gas - See BelowHydro** 10.68% 7.85%Hydro**92.30% 86.42%Hydro**4.99% 11.61%Nuclear 83.55% 90.86%Nuclear82.87% 89.68%Nuclear0.65% 1.25%AEP SPP45.10% 43.20%AEP SPP86.25% 84.79%AEP SPP6.79% 6.75%Coal*** 76.87% 77.45%Coal***82.87% 82.35%Coal***3.86% 5.49%Super Critical*83.77% 78.10%Super Critical*86.76% 80.41%Super Critical*5.50% 6.20%Sub-Critical*75.02% 77.21%Sub-Critical*81.67% 83.09%Sub-Critical*3.31% 5.23%Gas23.33% 20.65%Gas88.56% 86.39%Gas9.73% 8.04%AEP Texas65.35% 71.95%AEP Texas67.78% 73.95%AEP Texas23.48% 17.43%Coal**** 65.35% 71.95%Coal 67.78% 73.95%Coal** **23.48% 17.43%AEP System60.06% 59.54%AEP System82.62% 81.84%AEP System8.45% 8.13%EquivalentForced OutageFactor (EFOF)2006 2007AEP East Gas*****0.39% 1.23%86Net Generation StatisticsNotes: Figures represent generationproduced from AEP-owned assets only.Net Generation By Operating Company(in MWhs)Operating Company20062007AEP Generating10,276,1349,027,362Appalachian Power31,494,58132,588,773Columbus Southern Power14,134,23215,514,495Indiana Michigan Power31,950,76831,604,874Kentucky Power7,171,5057,533,223Ohio Power49,341,13454,155,697Public Service of Oklahoma15,139,84814,439,801Southwestern Electric Power19,961,79819,673,059Texas Central Company309,08541,122Texas North Company2,160,3482,309,566AEP System Total NetGeneration181,939,433186,887,97287New GenerationOperatingCompanyProject Name StateProjected CostFuel TypePlant TypeMWCapacityCommercialOperation DateAEG Dresden Ohio $309 MM Gas Combined-cycle 580 2010SWEPCo Stall Louisiana $378 MM Gas Combined-cycle 500 2010SWEPCo Turk Arkansas$1.5 B(1)Coal Ultra-supercritical600(1)2012(1) SWEPCo will own approximately 73%, or 440 megawatts, totaling about $1,110 million in capital investment.The increase in the cost estimate relates to cost escalations due to the delay in receipt of permits and approvals.88Environmental89Much of this investment will position AEP to accomplish the following:Reduce nitrogen oxide emissions by 90% through installation of Selective CatalyticReduction (SCR) systemsReduce sulfur dioxide emissions by 95% to98%+ through installation of Flue GasDesulfurization (FGD) systems (scrubbers)Realize co-benefit of mercury capture offered through SCR and FGD systems togetherAvoid future landfill costs through sale of gypsum (by-product) & build where landfillcosts are lowerRealize benefits achievedthrough fuel flexibilityNOx and SO2emission reductions are part ofAEP’s on-going strategy tocomply with the Clean Air Act, Title IV regulations and the NSR consentdecree executed in October 2007.AEP’s Environmental Compliance StrategyRepresents the best and least-cost compliance path to improveenvironmental performance on a fleet basis, while continuing toprovide a reliable supply of power to customers at a reasonableprice and a solid return for investors.90•Rule finalized March 2005•Designed to address the contribution of regional emissionsto downwind PM2.5& 8-hour Ozone non-attainment•Reductions from 2003-level emissions: ~73% SO2& ~61% NOx•Reductions occur in phases:Phase I (2009/2010); Phase II (2015)•Established three cap & trade programs:1. Annual SO2Trading Program2. Annual NOxTrading Program3. Separate Ozone-Season only NOxTrading Program• On July 11, 2008 the D. C. Circuit Court issued a decision to remand and vacate CAIR,but the decision is not yet final• EPA and others have requested rehearing,and the D. C. Circuit Court has requestedfurther briefing on whether any party requested that the rule be vacated, andwhether the rule should remain in place while EPA responds to the remand• A final decision is expected shortly after the briefing is completed (November 2008)Clean Air Interstate RuleApplicability to AEP•AEP-East States & Louisiana subject to allthree trading programs•Arkansas subject onlyto the Ozone-Season trading program•Texas subject to onlythe Annual NOx& SO2trading programs•CAIR does notapply to Oklahoma91•Rule finalized March 2005•Designed to address the Clean Air Act’s best available retrofit technology(BART) requirements and applicability to plants built between 1962 and1977 that emit more than 250 tonsper year of certain pollutants•Final rule demonstrates that CAIRwill result in more visibilityimprovements than BART•States are allowed to substitute CAIR requirements in their SIPs forcontrols that would otherwise be required by BART•For BART-eligible facilities located in states not subject to CAIRrequirements for SO2and NOx, additional controls will be requiredClean Air Visibility RuleApplicability to AEP•Requires SO2reductions in Oklahoma and Arkansas•Scrubbers (FGDs) will be installedat our Northeastern and Flint Creekplants by 201592•Rule finalized March 2005• Designed to reduce mercury emissions by ~70% nationwidefrom electric utilities• Reductions occur in phases:Phase I (2010); Phase II (2018)• Establishes a cap & trade structure to achieve mercuryreductions• On February 8, 2008 the Supreme Court issued a decision toremand and vacate CAMRClean Air Mercury RuleAEP will achieve significant mercury reduction as a co-benefit ofSCR and FGD systems, but mercuryspecific control equipment willbe needed on several units.93Generation - Environmental Project Status ReportAt the conclusion of our current environmental retrofit program, over 58% of our 24,630 MW coalfired generation fleet will be equipped withSCRs and over 73% will be scrubbed (FGDs).Plant NameMWCapacitySCR Status FGDStatusEast PlantsAmos 1800In-serviceProjected 2010Amos 2800In-serviceProjected 2009Amos 31300In-serviceProjected 2009Big Sandy 2800In-serviceProjected 2014Cardinal 1600In-serviceIn-serviceConesville 5375N/AUpgrade In-serviceConesville 6375N/AUpgrade in-serviceGavin 1&22620In-serviceIn-service; Upgrade projected 2010Mitchell 1&21600In-serviceIn-serviceMountaineer1320In-serviceIn-serviceMuskingum River 5585In-serviceProjected 2015Rockport 11300Projected 2017Projected 2017Rockport 21300Projected 2019Projected 2019CCD PlantsConesville 4339Projected 2009Projected 2009Stuart 1-4620In-serviceIn-serviceZimmer330In-serviceIn-serviceWest PlantsDolet Hills262N/AIn-service; Upgrade projected 2012Flint Creek 1264N/AProjected 2012Northeastern 3450N/AProjected 2012Northeastern 4450N/AProjected 2013Oklaunion485N/AIn-servicePirkey 580N/AUpgrade In-serviceWelsh 2528N/AProjected 201294Materials and Vendors – AEP’s AdvantageActuals To Date & Firm Costs5%95%Estimated Cost Exposure*Breakdown of Environmental Compliance Program(% of Purchased Costs)SCR TechnologyFGD Technology• Removes 85 – 93%of NOx emissions• Requires ~ 1% useof auxiliary power•AEP Capital Cost ~ $162/kW avg.• Removes 95 – 98% of SO2emissions• Requires ~1.5% to 3.0% use of auxiliarypower•AEP Capital Cost ~ $262/kW avg.Note: these percentages relate to the environmentalprogram through 2010* Primarily labor costsCombination of SCR & FGDtechnology results in co-benefit of Hgremoval ~ 80% removal efficiencyAEP benefits from first-mover advantage through lower contractedprices compared to industry.95•The overall generation loss incapacity associated with SCRand FGD retrofit for the entireAEP fleet is roughly 600MW.•Typically, an SCR consumes approximately 1% whereas anFGD consumes from 1.5% to 3.0% of the plant electricityoutput.•Plant modifications increasing unit MW ratings are beingimplemented as part of the retrofit program•For example, Mountaineer turbine valve upgrades willincrease unit output by ~30 - 45 MW•Similar upgrades will be implemented on other unitsImpact of SCR and FGD on Net GenerationPlant modifications will mitigate FGD and SCR capacityconsumption.96Calendar YearLimitation2010450,000 tons2011450,000 tons2012420,000 tons2013350,000 tons2014340,000 tons2015275,000 tons2016260,000 tons2017235,000 tons2018184,000 tons2019 and each year thereafter174,000 tonsEastern System-Wide Annual Tonnage Limitations for SO2Emission LimitsIn compliance with our 2007 NSR settlement,the following limits are applicable toAEP’s eastern generation fleet:Calendar YearLimitation200996,000 tons201092,500 tons201192,500 tons201285,000 tons201385,000 tons201485,000 tons201575,000 tons2016 and each year thereafter72,000 tonsEastern System-Wide Annual Tonnage Limitations for NOxEmissions caps do not include any of the gas-fired units,or any new units AEP might build or purchase in the east.97AEP/CertainTeed Gypsum Wallboard InitiativeCertainTeed Gypsum opened newwallboard manufacturing plant in March of2008 adjacent to OPCo’s Mitchell plantnear Moundsville, WVWallboard plant utilizes the gypsumproduced from both the Mitchell andCardinal power plants.Gypsum is the by-product of the recentlycompleted FGD (i.e. scrubber) process.Key Project BenefitsEnvironmental stewardship program whicheliminates the need for an expensivegypsum landfill at Mitchell.Significant capital and annual O&M savingsfor Ohio ratepayers.Wallboard is produced using greater than96% recycled materials (i.e. gypsum,paper).Created many new good paying jobs.Strong/stable counterparty – CertainTeed isthe #1 producer of wallboard in the world98Future Potential Green HouseGas Regulations99AEP’s Climate PositionAEP supports a reasonable approachto carbon controls in the USAEP has taken measurable, voluntary actions to reduce its GHGemissions and will support a well-thought out US mandate toachieve additional, economy-wide reductionsGlobal warming is a global issueand AEP supports the US taking aleadership role in developing a new international approach thatwill address growing emissions from all nations, includingdeveloping countries such as India and ChinaA certain and consistent national policy for reasonable carboncontrols should include the following principles:ComprehensivenessCost-effectivenessRealistic emission control objectivesMonitoring, verification and adjustment mechanismsTechnology development & deploymentRegulatory or economic barriers must be addressedRecognition provided for early action/investment made for GHGmitigationInclusion of adjustment provision iflargest emitters in developingworld do not take actionA reliable and reasonably-priced electric supply is necessary tosupport the economic well-being of the areas we serve.100AEP’s Long-term CO2Reduction CommitmentExisting ProgramsRenewables800 MWs of Wind300 MWs of HydroDomestic OffsetsForestry – 0.35MM tons/yr @$500K/yearOver 63MM trees plantedthrough 20061.2MM tons of carbonsequesteredInternational OffsetsForestry projects haveresulted in 1MM tons ofcarbon sequestered through2006Chicago Climate ExchangeNew Program AdditionsIncremental Reduction quantity: 5MM tons/yrTiming: To take effect/receive credits by 2011Methods+1000 MWs of Wind PPAs – 2MM tons/yrDomestic Offsets (methane) – 2MM tons/yr(e.g., livestock methane capture deal of 0.6MMtons/yr)Forestry – Tripling annual investment toincrease to 0.5MM tons/yr by 2015Fleet Vehicle/AviationOffsets – 0.2MM tons/yrAdditional actions toinclude DSM and end useenergy efficiency, biomass and power plantefficiency – 0.2MM tons/yrNew Technology AdditionsCommercial solutions for existing fleetChilled AmmoniaAEP is committed to a 5mm ton/yr reduction in CO2emissionswhich offsets approx half of the emissions projected from newgeneration projects previously announced.101Chilled Ammonia Technology ProgramProject Validation20-30 MWe(megawatts electric) scale (ascale up of Alstom/EPRI 1.7 MWefieldpilot, under construction at WEEnergies)Located at the AEP Mountaineer Plant inWV100,000 – 300,000 tonnes CO2per yearIn operation 3Q 2009Alstom “Chilled Ammonia” TechnologyGeologic storage for CO2Represents Post-Combustion CaptureConventional or Advanced Amines;Chilled AmmoniaAmine technologies are currentlycommercially available in otherindustrial applicationsRelatively low CO2concentrationin flue gas – more difficult tocapture than other approachesHigh parasitic demandConventional Amine ~ 25-30%Chilled Ammonia target ~10-15%2009 Commercial OperationMountaineerPlant (WV)CO2Storage(Battelle)MOU (Alstom & RWE)Post-combustion carbon solution provides pure CO2streamfor capture.ChilledAmmonia**Operating Company Overview** **Regulation Generation &** **Environmental** 

# Company Overview**Coal**

# 102 

# Coal

Fall EEI 2008 • Coal Procurement, Delivery & Transportation

• Fuel Recovery

• Coal Market Information103Coal Procurement – 2008 ProjectedCoal Stats:100% contracted for 2008Avg. delivered price ~ $36.58/ton in 2007Approximate 28% price increase in 2008based on 2007 actual results.AEP burns approx. 76 million tonsof coal per yearNorthernAppalachia33%Powder River Basin34%CentralAppalachia24%AEP WestLignite28%Powder RiverBasin72%AEP EastNorthernAppalachia45%Powder RiverBasin20%CentralAppalachia33%Total AEP SystemLignite 8%Colorado/Utah 1%Colorado/Utah 2%104Total AEP SystemBarge Direct22%Rail/Barge*15%Truck8%Belt/Conveyor11%Rail Direct40%Rail Direct74%Belt/Conveyor26%Barge Direct30%Rail Direct28%Rail/Barge*21%Truck11%* Reflects coal delivered to AEP plants transported through a combination of rail and barge2007 ActualAEP EastAEP WestCoal DeliveryTruck Combo4%TruckCombo5%Belt/Conveyor5%105AEP’s Coal Transportation AssetsCurrent Coal & Transportation Assets:Control over 9,000 railcarsOwn/lease and operate over 2,900barges & 80 towboats/tugsCoal handling terminal with 20million tons of capacity*Represents close approximations2007 ActualAEP’s transportation assets provide flexibility in a constraineddelivery environment.25%75%AEP-owned AssetExternal CarrierCoal Transportation to AEP Plants*106AEP River Operations•Full-service Inland Waterways carrier2,900 hopper barges60+ towboats/20 tugs•Tonnage & Commodity:Captive: (for AEP)-37MM tons of coal;Commercial: 35MM tons of coal/grain/bulk•Gulf OperationsBarge cleaning and repairFleeting and shiftingMidstream transfers•Operating Centers in Lakin, WV, CapeGirardeau, MO, Paducah, KY, Convent andBelle Chase, LAInland Waterway Routes For AEP River Operations107Off System SalesCounterparties25%Shareholder20%Customer55%AEP SystemIn response to Ohio Substitute Senate Bill 221, AEP Ohiofiled an Electric Security Plan that would allow recoveryof fuel costs from customers who do not switch theirsupplier. If adopted, AEP’s fuel costs will be eligible forrecovery in all AEP jurisdictions beginning in 2009.80% of fuel cost is recoverable across the AEP SystemActive Fuel ClauseJurisdictions:–AEP EAST: APCo, I&M, KPCo, KGP, WP–AEP WEST: PSO, SWEPCONote: Fuel recovery percentages are based on estimates for 2008 fiscal yearFuel Cost Recovery(on average)Fuel Recovery108Jurisdictional Fuel Clause SummaryArkansasIndianaKentuckyLouisianaMichiganOhioOklahomaTennesseeTexas (SPP)VirginiaWest VirginiaYesYesYesYesYesEffective 1/1/09YesYesYesYesYesAnnuallySemi-AnnuallyMonthlyMonthlyAnnuallyTBDAnnuallyMonthlyAnnuallyAnnuallyAnnuallyJurisdictionActive Fuel ClauseFrequencyEffective January 1, 2009 we havefuel recovery in all jurisdictions.109Coal Producing RegionsIllinoisBasin•Medium Btu; High Sulfur•Market needs developmentNorthernAppalachia•High Btu; High Sulfur•Market ConcentrationCentralAppalachia•High Btu; Low Sulfur•Fragmented Market•Production HurdlesSouthern PRB•Low Btu; Low Sulfur•Market Concentration•Transportation to the EastCO/UTUintaBasin•High Btu; Low Sulfur•Limited transportation110Uses of Coal by Sector111Domestic Coal Price Markers (FOB Mine)$20.00$30.00$40.00$50.00$60.00$70.00$80.00$90.00$100.00$110.00$120.00$130.00$140.00$150.00

J anua r y- 0 3 May - 03 Sept e m b er - 03 Janu a ry - 04 M ay-04 September-04 J anua r y-05 May - 05 Sept e m b er - 05 Ja nua r y- 0 6 May -0 6 Sept e m b er - 06 Janu a ry-07 May-07 September-07 January-08 May - 08

Sept e m b er - 08

NYMEX Price, $/to n$5.00$7.00$9.00$11.00$13.00$15.00$17.00$19.00$21.00$23.00$25.00 PRB Price, $/tonNYMEX Prompt Mo.PRB 8800 Prompt Mo.112Domestic Coal MarketPrimary drivers for increasing coal prices in the US are:Increase in the cost components to produce the productDeclining productivity due to reserves, safety, etc.Declining eastern US coal production....particularly Central AppalachiaIncreasing global demand for coal....particularly AsiaInability to bring on new production quickly due to permitting and labor related issuesHigh cost to mine in Central Appalachian regionCapital required for new productionSustained pricing, how long?Increase in the international demand for US coal productsDramatic increase in east coast and gulf coast US coal exports have lead to much higher pricedmarkets in the US (82M exp; 28M imp)Continued demand of metallurgical coal is drawing steam coal into the metallurgical coal marketWeak US Dollar**Financial Update Transmission Initiatives** 

# 113 

# Transmission Initiatives

Fall EEI 2008114NOTE: The lines shown are conceptual in nature and do not represent actual routes. Plans are subject to change.Making it Happen: EHV Projects Under DevelopmentNEW 765PotentialPJM ProjectsPotentialPJM ProjectsSPP EHVOverlay (2008)SPP EHVOverlay (2008)MISO VisionPlan (2008)MISO VisionPlan (2008)Existing AEP765-kV SystemExisting AEP765-kV SystemAEP/ITCProjectAEP/ITCProjectPATHProjectPATHProjectAEP/DukeAEP/Duke115765 Right-of-Way ComparisonFrom a siting standpoint, 765-kV is more efficient in terms of economiesof scale and right-of-way than lower capacity lines.116EHV Transmission in PJM: PATHThe ROW routes shown on this diagram areillustrative of the initial project approved by PJM,and not of the recently reconfigured line. Assuch, this map is not intended to depict the actualroute that will eventually be selected.PATH Progress to DatePJM approved project in its Regional TransmissionExpansion Plan in June 2007On September 1, 2007 AEP andAllegheny Energy formed anew joint venture -- Potomac-Appalachian TransmissionHighline (PATH) and its subsidiariesFERC order issued on February 29, 2008 approving:Cash return on CWIP and 14.3% incentive ROERecovery of all costs incurred prior to the time rates go intoeffect, andRecovery of all prudently incurred development andconstruction costs if the project is abandoned as a result offactors beyond the control of PATH or its parents.FERC ordered the formula rate mechanism be set forhearing, pending settlement judge proceduresIn October 2008, PJM announced a reconfiguration of thePATH line which will eliminate the connection with theBedington substation and the twin-circuit 500-kV linesfrom Bedington to Kemptown,and include a new mid-pointsubstation near existing PATH alternative routesThe reconfiguration is a result of constraints identified as aresult of comprehensive siting studies; interaction withgovernment agencies; public input; and a desire to identify asolution that reduces line mileage and minimizes the impacton communities and the environment.Total estimated cost of $1.8 billion; AEP portionapproximately $600 millionKey ChallengesCPCN and Siting Approval from WV and MD117Joint Ventures with MidAmerican Energy Holdings Company50/50 utility joint venture between AEP Utilities,Inc. and MEHC Texas Transco, LLCETT capital structure is 60% debt / 40% equitywith a 9.96% ROEServices provided by AEP and investmentopportunities can be offered by either partnerTotal initial investment of $70 million beforeownership divisionIn October 2008, the District Court found that thePUCT exceeded its authority by granting ETT aCCN. This decision iscurrently under appeal andETT believes the ultimate outcome will validateits utility status.AEP signed an agreement with MidAmericanEnergy Holdings Company on September 13,2007 to form Electric Transmission America, a50/50 joint venture.Both MidAmerican and AEP desire to utilize ETAas a vehicle to investin select transmissionprojects located in North America, outside theElectric Reliability Council of Texas.Projects taken on byETA would entailtransmission facilities:345 kV and aboveWithin, adjacent to and outside theCompanies’ respective service areas(excluding ERCOT)Greater than $100 millionETA is working on identifying investmentopportunities and collaborating withlikeminded, qualified investment partners indifferent regions of the country.In 2008, ETA signedagreements withWestar Energy and OGE proposing to buildthe first and second segments of the 765-kVOverlay Plan in SPPElectric Transmission Texas UpdateElectric Transmission America Update118Texas CREZ ProjectThe ROW routes shown on this diagram are for illustrativepurposes only and may not depict the actual route that couldeventually be selected. The substation locations may also bemodified.OverviewIn September 2008, ETT and agroup of other Texas transmissionproviders filed a comprehensiveplan with the PUCT for completionof the CREZ facilities approved bythe Commission.ETT’s requested share of thecoordinated plan is approximately$1.5 billion. Staff testimony inOctober 2008 recommended ETT’sshare at $1.2 billion.The filing calls for completion ofthe plan by 2012.Next StepsPUCT hearings – December 2008Selection of transmissionproviders – 1Q 2009Strengthening the ERCOT grid to collect and deliver wind generation to load119EHV Transmission in SPPTotal SPP 765-kV Overlay estimated to cost approximately $7Billion by SPP March 2008 study, a portion of which could bebuilt by ETA.The ROW routes shown on this diagram are for illustrativepurposes only and may not depict the actual route that couldeventually be selected. The substation locations may also bemodified.OverviewSent non-binding Letter of Commitment toSPP to construct 765-kVand 500-kV projectsin SPP region consistent with SPP OverlayStudy – Summer 2007Updated EHV Overlay Study completed bySPP – March 2008BenefitsOverall reliability reinforcement withimproved voltage support throughout the SPPsystemSignificantly increased transfer capabilityProvides access to new generation resources,especially renewablesAllows for effective interconnections for EHVsystem developmentSignificant opportunity for 765-kV transmission in SPP120Prairie Wind Transmission, LLCTotal SPP 765-kV Overlay estimated to cost approximately $7Billion by SPP March 2008 study, a portion of which could bebuilt by ETA.The ROW routes shown on this diagram are for illustrativepurposes only and may not depict the actual route that couldeventually be selected. The substation locations may also bemodified.WestarWestarOverviewIn May 2008, ETA signed an agreement withWestar Energy to form Prairie WindTransmission, LLC (PWT).PWT is a 50/50 JV that is proposing to buildapproximately 230 miles of 765-kV linesextending from Wichita, KS, west to a substationnortheast of Dodge City, KS, and then south tothe Kansas border fromMedicine Lodge, KS.The project will provide enhanced electricitytransport in Kansas and support expansion ofrenewable electricity generation in the region.Project is expected tocost approximately $600million (based on SPP estimates) and be inservice by 2013.AEP’s ownership of the joint venture is 25%.Kansas CPC filing submitted in May 2008.FERC formula rate filingsubmitted in October2008 requesting:Cash return on CWIP and 13.3% incentive ROERecovery of all costs incurred prior to the timerates go into effect, andRecovery of all prudently incurred developmentand construction costs if the project isabandoned as a result of factors beyond thecontrol of PWT or its parents.JV to build first segment of 765-kV transmission in SPPKey ChallengesCost allocation which enables the development of“system solutions”RTO Approval121Tallgrass Transmission, LLCTotal SPP 765-kV Overlay estimated to cost approximately $7Billion by SPP March 2008 study, a portion of which could bebuilt by ETA.The ROW routes shown on this diagram are for illustrativepurposes only and may not depict the actual route that couldeventually be selected. The substation locations may also bemodified.OGEOverviewIn July 2008, ETA signedan agreement withOklahoma Gas & Electric to form TallgrassTransmission, LLC (TG).TG is a 50/50 JV that is proposing to buildapproximately 170 miles of 765-kV lines extendingfrom the Kansas-Oklahoma border north ofWoodward, OK, extending west into the Oklahomapanhandle to a new stationthat will be built nearGuymon, OK.The project will promote wind development in thewestern half of Oklahoma.Project is expected tocost approximately $500million and be in-service by 2013.AEP’s ownership of the joint venture is 25%.Other responsibilities will be handled by thepartners or outsourced.FERC formula rate filingsubmitted in October2008:Cash return on CWIP and 13.3% incentive ROERecovery of all costs incurred prior to the timerates go into effect, andRecovery of all prudently incurred developmentand construction costs if the project isabandoned as a result of factors beyond thecontrol of TG or its parents.JV to build second segment of 765-kV transmission in SPPKey ChallengesCost allocation which enables the development of“system solutions”RTO Approval122Pioneer Transmission, LLCThe ROW routes shown on this diagram are forillustrative purposes only and may not depict theactual route that could eventually be selected.OverviewIn August 2008, AEP signed an agreement withDuke Energy to form Pioneer Transmission,LLC (PT).PT is a 50/50 JV that is proposing to buildapproximately 240 miles of 765-kV linesextending from AEP’s Rockport Station toDuke’s Greentown station in Indiana.The project will improve the reliability of thenation's transmission grid, allow more efficientuse of existing electricity production anddelivery infrastructure, protect nationalsecurity and expand opportunities for newgeneration, including renewables.Project is expected tocost approximately $1billion and be in-service by 2015.AEP’s ownership of the joint venture is 50%.Other responsibilities will be handled by thepartners or outsourced.FERC formula rate filingsubmitted in October2008 requesting:Cash return on CWIP and 13.5% incentive ROERecovery of all costs incurred prior to the timerates go into effect, andRecovery of all prudently incurreddevelopment and construction costs if theproject is abandoned as a result of factorsbeyond the control of PT or its parents.Key ChallengesCost allocation which enables the development of“system solutions”RTO ApprovalSiting123EHV Transmission in MichiganThe ROW routes shown on this diagram are forillustrative purposes only and may not depict theactual route that could eventually be selected.The substation locations may also be modified.OverviewITC and AEP conducted a technical study for anew 765-kV from Ohio to MichiganStudy was released Q3 2007700 miles of 765-kV line in Ohio and Michigan$2.6 billion investment (in 2007$, beforeownership division)AEP and ITC are in discussions to form a JointVentureBenefitsUp to 5,000 MW improved transfer capabilityReduces network line losses by 250 MWKey ChallengesCost allocation which enables the development of“system solutions”RTOs ApprovalsSupporting Michigan’s 21stCentury Energy Plan to address severe capacity constraints**Financial Update Transmission Initiatives** 

# 124 

# Financial Update

Fall EEI 2008 • Capitalization

• Liquidity Position

• Credit Ratings

• Long-Term Debt Maturity Profile

• Debt Schedules125CapitalizationOur goal remains a maximum 60/40 debt-to-capital ratio on an adjustedbasis.Capital StructureDebt EquityTotalDebt EquityTotalBalance Sheet CapitalizationLong-term Debt 14,993-14,99316,00716,007Short-term Debt660-6601,3021,302Preferred Stock Not Subject to Mandatory Redemption-61616161Common Equity-10,07910,07910,91710,917Total Capitalization per Balance Sheet15,65410,13925,79317,30910,97828,286% of Capitalization per Balance Sheet60.7% 39.3% 100.0% 61.2% 38.8% 100.0%AdjustmentsDefeased First Mortgage Bonds (19)-(19)---less: Cash and Marketable Securities(178)-(178)(781)-(781)Capital and Operating Leases1,522-1,1631,470- 1,470Securitization Bonds(2,257)- (2,257)(2,132)- (2,132)Receivables Securitization507-507555-555Spent Nuclear Fuel Disposal Liability(259)-(259)(263)-(263)Equity Portion of Hybrid Issuances---(158)1581Total Adjusted Capitalization14,96910,13925,10815,99911,13627,135% of Adjusted Capitalization159.6% 40.4% 100.0% 59.0% 41.0% 100.0%Credit Adjusted Ratios:FFO Interest Coverage4.34.7FFO to Total Debt19.6%21.5%Actual 12/31/2007Actual 9/30/2008126LiquidityAEP’s liquidity position is$2.7 billion as of 10/28/08.Liquidity SummaryActual(unaudited)10/28/08($ in millions)Amount MaturityRevolving Credit Facility$1,500 Mar-11Revolving Credit Facility1,454 Apr-12Revolving Credit Facility627 Apr-11Revolving Credit Facility338 Apr-09Total Credit Facilities3,919PlusAEP, Inc. Cash and Investments1,366LessDraw on Credit Facilities(1,969)Commercial Paper Outstanding(178)Letters of Credit Issued(439)Net Available Liquidity$2,699127AEP Credit RatingsSBBB+SBBBNBaa1Southwestern Electric Power CompanySBBB+SBBBSBaa1Public Service Company of OklahomaSBBB+SBBBNA3Ohio Power CompanySBBBSBBBSBaa2Kentucky Power CompanySBBBSBBBSBaa2Indiana Michigan Power CompanySA-SBBBSA3Columbus Southern Power CompanyNBBB+SBBBNBaa2Appalachian Power CompanySA-SBBBSBaa1AEP Texas North CompanySBBB+SBBBNBaa2AEP Texas Central CompanySF2SA2SP2AEP, Inc. Short Term RatingSBBBSBBBSBaa2American Electric Power Company Inc.OutlookUnsecuredOutlookUnsecuredOutlookUnsecuredCompanySeniorSeniorSeniorFitchS&PMoody'sCurrent Ratings for AEP, Inc. & SubsidiariesRatings current as of October 17, 2008

# 128 

# Long-term Debt Maturity Profile

Year 2008 (1) 

# 2009 2010

AEP, Inc.

- $

- $ 490 $

AEP Generating Company

- $

- $

- $

Appalachian Powe r

- $ 150 $ 150 $

Columbus Southern Powe r

- $

- $ 150 $

Kentucky Powe r 30 $

- $

- $

Indiana Michigan Powe r 50 $

- $

- $

Ohio Power 37 $ 82 $ 600 $

Public Service of Oklahoma

- $ 50 $ 150 $

Southwestern Electric Power

- $

- $

- $

Texas Central Company (2)



# - $

- $ 203 $

Texas North Company

- $

- $

- $

Total 117 $ 282 $ 1,743 $

(1) Maturities remaining as of September 30, 2008

(2) Includes Texas Securitization Bonds Based upon Scheduled Final Payment Date ($ in millions)

# 129 

# Debt Schedules

Note: Debt schedules current as of 9/30/08. 

# American Electric Power, Inc Interest Maturity Amount

Junior Subordinated Debentures 8.750% 03/01/2063 $315,000,000

Senior Notes 5.375% 03/15/2010 $490,000,000

Senior Notes 5.250% 06/01/2015 $242,775,000

Weighted Average or Total 6.36% $1,047,775,000



# AEP Generating Interest Maturity Amount

Pollution Control Bond 4.150% 07/01/2025 $22,500,000

Pollution Control Bond 4.150% 07/01/2025 $22,500,000

Senior Notes 6.330% 06/28/2037 $210,909,170

Weighted Average or Total 5.947% $255,909,170

# 130 

# Debt Schedules

Note: The weighted average coupon excludes all floating rate debt.

Debt schedules current as of 9/30/08. 

# AEP Texas Central Interest Maturity Amount

Pollution Control Bond 5.625% 10/01/2017 $40,890,000

Pollution Control Bond 4.450% 06/01/2020 $6,330,000

Pollution Control Bond 5.200% 05/01/2030 $60,000,000

Pollution Control Bond 4.400% 05/01/2030 $111,700,000

Pollution Control Bond 4.550% 05/01/2030 $50,000,000

Pollution Control Bond 5.125% 06/01/2030 $120,265,000

Preferred Stock 4.000% NA $4,191,200

Preferred Stock 4.200% NA $1,730,100

Senior Notes 6.650% 02/15/2033 $275,000,000

Weighted Average or Total 5.609% $670,106,300

Securitization Bond 5.560% 01/15/2010 $85,906,616

Securitization Bond 5.960% 07/15/2013 $214,926,738

Securitization Bond 6.250% 01/15/2016 $191,856,858

Weighted Average or Total 6.003% $492,690,212

Securitization Bond 4.980% 01/01/2010 $116,771,724

Securitization Bond 4.980% 07/01/2013 $341,000,000

Securitization Bond 5.090% 07/01/2015 $250,000,000

Securitization Bond 5.170% 01/01/2018 $437,000,000

Securitization Bond 5.306% 07/01/2020 $494,700,000

Weighted Average or Total 5.146% $1,639,471,724



# AEP Texas North Interest Maturity Amount

Pollution Control Bond 4.450% 06/01/2020 $44,310,000

Preferred Stock 4.400% NA $2,348,600

Senior Notes 5.500% 03/01/2013 $225,000,000

Senior Notes 5.890% 04/01/2018 $30,000,000

Senior Notes 6.760% 04/01/2038 $70,000,000

Weighted Average or Total 5.637% $371,658,600

# 131 

# Debt Schedules

Note: The weighted average coupon excludes all floating rate debt.

Debt schedules current as of 9/30/08. 

# Appalachian Power Company Interest Maturity Amount

Pollution Control Bond 4.850% 05/01/2019 $30,000,000

Pollution Control Bond 4.850% 05/01/2019 $40,000,000

Pollution Control Bond Floating 11/01/2021 $17,500,000

Pollution Control Bond 5.000% 11/01/2021 $19,500,000

Pollution Control Bond 5.500% 10/01/2022 $100,000,000

Pollution Control Bond 6.050% 12/01/2024 $30,000,000

Pollution Control Bond Floating 02/01/2036 $50,275,000

Pollution Control Bond Floating 02/01/2036 $75,000,000

Preferred Stock 4.500% NA $17,752,000

Senior Notes 6.600% 05/01/2009 $150,000,000

Senior Notes 4.400% 06/01/2010 $150,000,000

Senior Notes 5.550% 04/01/2011 $250,000,000

Senior Notes 5.650% 08/15/2012 $250,000,000

Senior Notes 4.950% 02/01/2015 $200,000,000

Senior Notes 5.000% 06/01/2017 $250,000,000

Senior Notes 5.950% 05/15/2033 $200,000,000

Senior Notes 5.800% 10/01/2035 $250,000,000

Senior Notes 6.375% 04/01/2036 $250,000,000

Senior Notes 6.700% 08/15/2037 $250,000,000

Senior Notes 7.000% 04/01/2038 $500,000,000

Weighted Average or Total 5.91% $3,080,027,000

# 132 

# Debt Schedules

Note: Debt schedules current as of 9/30/08. 

# Columbus Southern Power Interest Maturity Amount

Pollution Control Bond Floating 12/01/2038 $48,550,000

Pollution Control Bond Floating 12/01/2038 $43,695,000

Pollution Control Bond 4.850% 08/01/2040 $44,500,000

Pollution Control Bond 5.100% 11/01/2042 $56,000,000

Senior Notes 4.400% 12/01/2010 $150,000,000

Senior Notes 5.500% 03/01/2013 $250,000,000

Senior Notes 6.050% 05/01/2018 $350,000,000

Senior Notes 6.600% 03/01/2033 $250,000,000

Senior Notes 5.850% 10/01/2035 $250,000,000

Weighted Average or Total 5.751% $1,442,745,000



# Indiana Michigan Power Company Interest Maturity Amount

Pollution Control Bond Floating 10/01/2019 $25,000,000

Pollution Control Bond Floating 11/01/2021 $52,000,000

Pollution Control Bond 5.250% 04/01/2025 $40,000,000

Pollution Control Bond 4.625% 06/01/2025 $50,000,000

Pollution Control Bond Floating 06/01/2025 $50,000,000

Pollution Control Bond Floating 06/01/2025 $50,000,000

Preferred Stock 4.125% NA $5,533,500

Preferred Stock 4.120% NA $1,105,500

Preferred Stock 4.560% NA $1,441,200

Senior Notes 6.450% 11/10/2008 $50,000,000

Senior Notes 6.375% 11/01/2012 $100,000,000

Senior Notes 5.050% 11/15/2014 $175,000,000

Senior Notes 5.650% 12/01/2015 $125,000,000

Senior Notes 6.000% 12/31/2032 $150,000,000

Senior Notes 6.050% 03/15/2037 $400,000,000

Weighted Average or Total 5.778% $1,275,080,200

# 133 

# Debt Schedules

Note: The weighted average coupon excludes all floating rate debt.

Debt schedules current as of 9/30/08. 

# Kentucky Power Interest Maturity Amount

Senior Notes 6.450% 11/10/2008 $30,000,000

Senior Notes 6.000% 09/15/2017 $325,000,000

Senior Notes 5.625% 12/01/2032 $75,000,000

Weighted Average or Total 5.966% $430,000,000



# Ohio Power Company Interest Maturity Amount

Pollution Control Bond Floating 07/01/2014 $50,000,000

Pollution Control Bond Floating 07/01/2014 $50,000,000

Pollution Control Bond Floating 04/01/2022 $35,000,000

Pollution Control Bond Floating 06/01/2022 $50,000,000

Pollution Control Bond 5.563% 10/01/2022 $19,565,000

Pollution Control Bond 5.563% 01/01/2023 $19,565,000

Pollution Control Bond 5.150% 05/01/2026 $50,000,000

Pollution Control Bond Floating 04/01/2028 $54,500,000

Pollution Control Bond Floating 07/01/2028 $54,500,000

Pollution Control Bond Floating 10/01/2028 $54,500,000

Pollution Control Bond Floating 01/01/2029 $54,500,000

Pollution Control Bond Floating 04/01/2036 $65,000,000

Pollution Control Bond 4.900% 06/01/2037 $65,000,000

Notes Payable 6.270% 03/31/2009 $1,000,000

Notes Payable 7.490% 04/15/2009 $70,000,000

Notes Payable 7.210% 06/15/2009 $11,000,000

Preferred Stock 4.080% NA $1,459,500

Preferred Stock 4.200% NA $2,282,400

Preferred Stock 4.400% NA $3,148,200

Preferred Stock 4.500% NA $9,737,300

Senior Notes 6.240% 12/04/2008 $37,225,000

Senior Notes Floating 04/05/2010 $400,000,000

Senior Notes 5.300% 11/01/2010 $200,000,000

Senior Notes 5.500% 02/15/2013 $250,000,000

Senior Notes 5.750% 09/01/2013 $250,000,000

Senior Notes 4.850% 01/15/2014 $225,000,000

Senior Notes 6.000% 06/01/2016 $350,000,000

Senior Notes 6.600% 02/15/2033 $250,000,000

Senior Notes 6.375% 07/15/2033 $225,000,000

Weighted Average or Total 5.812% $2,907,982,400

# 134 

# Debt Schedules

Note: The weighted average coupon excludes all floating rate debt.

Debt schedules current as of 9/30/08. 

# Public Service Company of Oklahoma Interest Maturity Amount

Pollution Control Bond Floating 06/01/2014 $33,700,000

Pollution Control Bond 4.450% 06/01/2020 $12,660,000

Preferred Stock 4.000% NA $4,454,800

Preferred Stock 4.240% NA $806,900

Senior Notes 4.700% 06/15/2009 $50,000,000

Senior Notes 4.850% 09/15/2010 $150,000,000

Senior Notes 4.700% 05/15/2011 $75,000,000

Senior Notes 6.150% 08/01/2016 $150,000,000

Senior Notes 6.000% 12/31/2032 $200,000,000

Senior Notes 6.625% 11/15/2037 $250,000,000

Weighted Average or Total 5.791% $926,621,700



# Southwestern Electric Power Company Interest Maturity Amount

Notes Payable 4.470% 05/16/2011 $11,381,290

Notes Payable 4.470% 05/16/2011 $11,748,427

Notes Payable 7.030% 02/22/2012 $20,000,000

Notes Payable 6.370% 10/31/2024 $25,000,000

Pollution Control Bond 4.500% 07/01/2011 $41,135,000

Pollution Control Bond 4.950% 03/01/2018 $81,700,000

Pollution Control Bond Floating 01/01/2019 $53,500,000

Preferred Stock 5.000% NA $3,767,300

Preferred Stock 4.650% NA $190,700

Preferred Stock 4.280% NA $738,600

Senior Notes 5.375% 04/15/2015 $100,000,000

Senior Notes 4.900% 07/01/2015 $150,000,000

Senior Notes 5.550% 01/15/2017 $250,000,000

Senior Notes 5.875% 03/01/2018 $300,000,000

Senior Notes 6.450% 01/15/2019 $400,000,000

Trust Preferred Stock 5.250% 10/01/2043 $113,403,000

Weighted Average or Total 5.708% $1,562,564,317



# Grand Total $16,102,631,623