TRANSMISSION
COORDINATION AGREEMENT




















Between





Public
Service Company of Oklahoma,


Southwestern
Electric Power Company,


West
Texas Utilities Company,





and





American
Electric Power Service Corporation




























TABLE
OF CONTENTS


ARTICLE
I


TERM OF
AGREEMENT


1.1           Effective
Date


1.2           Periodic
Review





ARTICLE
II


DEFINITIONS


2.1           Agreement


2.2           Ancillary
Services


2.3           Company
Demand


2.4           Company
Peak Demand


2.5           Control
Area


2.6           Coordinating
Committee


2.7           Designated
Agent


2.8           Direct
Assignment Facilities


2.9           Generating
Unit


2.10           Hour


2.11           Month


2.12           Network
Integration Transmission Service


2.13           Open
Access Transmission Tariff


2.14           Point-to-Point
Transmission Service


2.15           PUCT


2.16           Scheduling,
System Control and Dispatch Service


2.17           SPP


2.18           Transmission
Customer


2.19           Transmission
Service


2.20           Transmission
System


2.21           Transmission
System Operator





ARTICLE
III


OBJECTIVES


3.1           Purposes





ARTICLE
IV


COORDINATING
COMMITTEE


4.1           Coordinating
Committee


4.2           Responsibilities
of the Coordinating Committee


4.3           Delegation
and Acceptance of Authority


4.4          
Reporting


ARTICLE
V


PLANNING


5.1           Transmission
Planning





ARTICLE
VI


TRANSMISSION


6.1           Delegation
to the Transmission System Operator


6.2           Transmission
Facilities


6.3           Direct
Assignment Facilities


6.4           Transmission
Service Revenues


6.5           Payment
of Costs for Network Use


6.6           Payment
of Costs for Point-to-Point Transmission Service





ARTICLE
VII


ANCILLARY
SERVICES


7.1           Ancillary
Services





ARTICLE
VIII


GENERAL


8.1           Regulatory
Authorization


8.2           Effect
on Other Agreements


8.3           Waivers


8.4           Successors
and Assigns; No Third Party Beneficiary


8.5           Amendment


8.6           Independent
Contractors


8.7           Responsibility
and Liability





SCHEDULE
A


ALLOCATION
OF TRANSMISSION REVENUES





SCHEDULE
B


ANNUAL
TRANSMISSION REVENUE REQUIREMENTS RATIOS





SCHEDULE
C


ALLOCATION
OF ANCILLARY SERVICE REVENUES





TRANSMISSION
COORDINATION AGREEMENT





Between





Public
Service Company of Oklahoma,


Southwestern
Electric Power Company,


West
Texas Utilities Company





and





American
Electric Power Service Corporation





This
TRANSMISSION COORDINATION AGREEMENT, hereinafter called “Agreement,”
is made and entered into as of the _____ day of _________, 2002, by and among
West Texas Utilities Company (“WTU”), Public Service Company of Oklahoma (“PSO”)
and Southwestern Electric Power Company (“SWEPCO”), hereinafter separately
referred to as “Company” and jointly as “Companies,” and American Electric Power
Service Corporation (“AEPSC”).




WHEREAS,
Companies are the owners and operators of interconnected generation,
transmission and distribution facilities with which they are engaged in the
business of transmitting and selling electric power to the general public, to
other entities and to other electric utilities; and




WHEREAS,
Companies achieve economic benefits for their customers through coordinated
planning, operation and maintenance of their transmission facilities in the
SPP;




NOW,
THEREFORE, the Companies and AEPSC mutually agree as follows:





ARTICLE
I




TERM OF
AGREEMENT


1.1           Effective
Date





This
Agreement shall become effective as of the date American Electric Power Company,
Inc. restructures its operating companies pursuant to Orders issued by the
Federal Energy Regulatory Commission ("FERC" or "Commission") in Docket Nos.
EC01-130-000 and ER01-2668-000, or such later date as is established by the
FERC. This Agreement shall continue in force and effect for a term of one year
from the effective date and continue from year to year thereafter until
terminated by written notice given by any Company to the other Companies and to
AEPSC. Such written notice shall become effective within 30 days of
receipt.




1.2
            Periodic
      Review





This
Agreement will be reviewed periodically by the Coordinating Committee, as defined
herein, to determine whether revisions are necessary to meet changing
conditions. In the event that revisions are made by the Companies pursuant to
Section 8.5, and after requisite approval or acceptance for filing by the
appropriate regulatory authorities, the Coordinating Committee may thereafter,
for the purpose of ready reference to a single document, prepare for
distribution to the Companies an amended document reflecting all changes in and
additions to this Agreement with notations thereon of the date
amended.


ARTICLE
II




DEFINITIONS


For
purposes of this Agreement, the following definitions shall apply:




2.1           Agreement shall mean
this Transmission Coordination Agreement including all attachments and schedules
applying thereto and any amendments made hereafter.




2.2           Ancillary Services
shall mean those services that are necessary to support the transmission of
capacity and energy from resources to loads while maintaining reliable operation
of the Companies’ transmission facilities in accordance with Good Utility
Practice, as that term is defined in the Open Access Transmission
Tariff.




2.3           Company Demand shall
mean the demand in megawatts of all retail and wholesale
power customers in the SPP on whose behalf the Company, by statute, franchise,
regulatory requirement, or contract, has undertaken an obligation to construct
and operate its transmission system to meet the reliable electric needs of such
customers, integrated over a period of one hour, plus the losses incidental to
that service.




2.4           Company Peak Demand
for a period shall be the highest Company Demand for any hour during the
period.




2.5           Control Area shall
mean an electric power system or combination of electric power systems to which
a common automatic generation control scheme is applied for the purposes
specified in the Open Access Transmission Tariff.





2.6           Coordinating
Committee shall mean the organization established pursuant to Section 4.1
of this Agreement and whose duties are more fully set forth herein.




2.7           Designated Agent
shall mean any entity that performs actions or functions on behalf of the
Companies, an Eligible Customer (as that term is defined in the Open Access
Transmission Tariff), or the Transmission Customer required under the Open
Access Transmission Tariff.




2.8           Direct Assignment
Facilities shall mean facilities or portions of facilities located in the
SPP that are constructed by the Companies for the sole use or benefit of a
particular Transmission Customer requesting service under the Open Access
Transmission Tariff.




2.9           Generating Unit shall
mean an electric generator, together with its prime mover and all auxiliary and
appurtenant devices and equipment designed to be operated as a unit for the
production of electric capacity and energy.




2.10           Hour shall mean a
clock-hour.




2.11           Month shall mean a
calendar month consisting of the applicable 24-Hour periods as measured by
Central Standard Time.




2.12           Network Integration
Transmission Service shall mean the transmission service provided in the
SPP under Part III of the Open Access Transmission Tariff.




2.13           Open Access Transmission
Tariff shall mean the Open Access Transmission Tariff or Tariffs filed on
behalf of the Companies with the Federal Energy Regulatory Commission by AEPSC
or a regional transmission entity,as such may be amended from
time to time.




2.14           Point-to-Point Transmission
Service shall mean the reservation and transmission of capacity and
energy on either a firm or non-firm basis from the points of receipt to the
points of delivery in the SPP under Part II of the Open Access Transmission
Tariff.




2.15           PUCTshall mean the
Public Utility Commission of Texas.




2.16           Scheduling, System Control
and Dispatch Service shall mean the service required to schedule the
movement of power through, out of, within, or into a Control Area, as specified
in Schedule 1 of the Open Access Transmission Tariff.




2.17           SPPshall mean the
Southwest Power Pool, or its successor in function.




2.18           Transmission Customer
shall mean any Eligible Customer as defined in the Open Access Transmission
Tariff (or its Designated Agent) that (i) executes a Service Agreement, or (ii)
requests in writing that the Companies, or their agent, file with the Federal
Energy Regulatory Commission a proposed unexecuted Service Agreement to receive
service under the Open Access Transmission Tariff. This term is used in the Part
I Common Service Provisions of the Open Access Transmission Tariff to include
customers receiving service under Part II and Part III of the Open Access
Transmission Tariff.




2.19           Transmission Service
shall mean service provided in the SPP under Part II or Part III of the Open
Access Transmission Tariff.




2.20           Transmission System
shall mean the facilities owned, controlled or operated by the Companies that
are used to provide transmission service in the SPP under Parts II and III of
the Open Access Transmission Tariff.




2.21           Transmission
System Operator shall mean that party that is charged with monitoring
the reliability of the Companies’ Transmission System.




ARTICLE
III




OBJECTIVES


3.1           Purposes




The
purposes of this Agreement are (a) to provide the contractual basis for the
coordinated planning and operation of the Companies’ transmission facilities in
the SPP to achieve optimal economies, consistent with reliable electric service
and regulatory and environmental requirements and (b) to provide the means by
which the Companies will allocate among themselves the revenue that they receive
for Part II and Part III and Ancillary Services provided in the SPP under the
Open Access Transmission Tariff. Any revenue received by a Company(ies) from the
provision of service under any other Part of the Open Access Transmission Tariff
or any agreement, tariff or rate schedule other than the Open Access
Transmission Tariff, will be kept by the Company(ies) that is (are) the
party(ies) to such Part, agreement, tariff or rate schedule.




ARTICLE
IV




COORDINATING
COMMITTEE


4.1           Coordinating
Committee




The
Coordinating Committee is the organization established to oversee planning,
construction, operation, and maintenance of the Transmission System. The
Coordinating Committee members shall include at least one member representing
each of the parties hereto who is not a member of the Operating Committee
established under the Restated and Amended AEP-West Operating Agreement. The
chairperson, who shall be appointed by the chief executive officer of the holder
of the majority of the common stock of the Companies, shall appoint the member
representative(s) of the Companies. Other than the chairperson, there shall be
the same number of members representing each Company. The majority of the
members on the Coordinating Committee shall be representatives of the Companies.
Coordinating Committee decisions shall be by a majority vote of those present.
However, any member not present may vote by proxy. The chairperson shall vote
only in case of a tie. No employee of the Companies engaged in marketing, sales
or brokering of electricity or an employee of any affiliate engaged or involved
in the transmission, sale, or marketing of electricity or natural gas shall be appointed
to, or serve on, the Coordinating Committee.




4.2           Responsibilities of the
Coordinating Committee




The
Coordinating Committee shall be responsible for overseeing:




(a) the
Companies in the coordinated planning of their transmission facilities in the
SPP, including studies for transmission planning purposes and their interaction
with independent system operators and other regional bodies that are interested
in transmission planning; and




(b)
compliance with the terms of the Open Access Transmission Tariff and the rules
and regulations of the Federal Energy Regulatory Commission relating
thereto.




4.3           Delegation and Acceptance of
Authority




The
Companies hereby delegate to the Coordinating Committee, and the Coordinating
Committee hereby accepts, responsibility and authority for the duties listed in
this Article and elsewhere in this Agreement.




4.4           Reporting




The
Coordinating Committee shall provide periodic summary reports of its activities
under this Agreement to the transmission and reliability function employees of
the Companies and shall keep such employees of the Companies informed of
situations or problems that may materially affect the reliability of the
Transmission System. Furthermore, the Coordinating Committee agrees to report to
the transmission and reliability function employees of the Companies in such
additional detail as is requested regarding specific issues or projects under
its oversight.





ARTICLE
V





PLANNING




5.1           Transmission
Planning




The Companies agree that their respective transmission facilities in the SPP
shall be planned and developed on the basis that their combined individual
systems constitute a coordinated transmission system and that the objective of
their planning shall be to maximize the economy, efficiency and reliability of
the Transmission System as a whole. In this connection, the Coordinating
Committee will from time to time, as it deems appropriate, direct studies for
transmission planning purposes.




ARTICLE
VI




TRANSMISSION




6.1           Delegation to the
Transmission System Operator




The Companies shall delegate to the Transmission System Operator the responsibility
and authority to act on behalf of the Companies for all of the requirements and
purposes of the Open Access Transmission Tariff.




6.2           Transmission
Facilities




Each
Company shall make its transmission facilities in the SPP available to the
Transmission System Operator.




6.3           Direct Assignment
Facilities




Each
Company shall make Direct Assignment Facilities available to the Transmission
System Operator as may be required to provide service to a
particular


Transmission
Customer requesting service under the Open Access Transmission
Tariff.




6.4           Transmission Service
Revenues




(a) The
Companies shall share transmission service revenues obtained from the use of the
transmission facilities that comprise the Transmission System in accordance with
Schedule A to this Agreement. Transmission service revenues are those revenues
received for service provided under the Open Access Transmission Tariff. The
Companies’ annual transmission revenue requirements are shown on Schedule B to
this Agreement and shall be revised whenever there is a change to the annual
transmission revenue requirements in Attachment H to the Open Access
Transmission Tariff or a change to the annual transmission revenue requirements
underlying the rates set forth in Schedules 7 and 8 to the Open Access
Transmission Tariff. Future revisions to the transmission revenue requirements
ratios set forth in Schedule B will be made by the Companies’ making an
appropriate filing with the Commission, if required by law. Such changes shall
become effective as of the date accepted or approved by the Commission, subject
to refund if the Commission so orders.




(b) Revenues received for Ancillary Services shall be allocated among the Companies
in accordance with the revenue ratios set forth in Schedule C. Future revisions
to the revenue ratios set forth in Schedule C will be made by the Companies’
making an appropriate filing with the Commission, if required by la w. Such
changes shall become effective as of the date accepted or approved by the
Commission, subject to refund if the Commission so orders.




(c)
Revenues received for third-party use of Direct Assignment Facilities shall be
distributed to the Company(ies) owning such facilities.




(d) The
distribution to the Companies of revenues received for stranded costs received
from third-party customers under the Open Access Transmission Tariff shall be
determined on a case-by-case basis and shall be filed with the Commission, if
required by law.




(e) The distribution to the Companies of revenues received for new transmission
facilities received from third-party customers under the Open Access
Transmission Tariff shall be determined on a case-by-case basis and shall be
filed with the Commission, if required by law.




(f) Revenues received for Transmission System studies performed for the benefit
of a Transmission Customer under Part II or Part III of the Open Access
Transmission Tariff shall be allocated to each Company as applicable, in
proportion to the ratio of each Company’s number of transmission pole miles of
the Transmission System, as such number of transmission pole miles is reported
in each Company’s Form 1 annual report, over the total number of transmission
pole miles of the Transmission System.




6.5           Payment of Costs for Network
Use




The
Transmission System Operator shall bill each of the Companies for the amount due
to the Transmission System Operator in each Month for their use of Network
Integration Transmission Service and Ancillary Services under the Open Access
Transmission Tariff on the basis set forth in the Open Access Transmission
Tariff.




6.6           Payment of Costs for
Point-to-Point Transmission Service




(a) The
cost of Transmission Service on the Transmission System for third party
off-system sales by a Company shall be borne by the selling
Company(ies).




(b) The
cost of Transmission Service provided by a third-party for off-system sales by a
Company shall be borne by the selling Company(ies).




ARTICLE
VII




ANCILLARY
SERVICES




7.1           Ancillary
Services




(a) Each
Company shall make available Ancillary Services as required to provide
service under the Open Access Transmission Tariff.




(b)
Revenues received for Ancillary Services will be allocated between the Companies
in accordance with Section 6.4(b) of this Agreement.


ARTICLE
VIII




GENERAL


8.1           Regulatory
Authorization




This
Agreement is subject to certain regulatory approvals and the Companies shall
diligently seek all necessary regulatory authorization for this
Agreement.




8.2           Effect on Other
Agreements




This
Agreement shall not modify the obligations of any of the Companies under any
agreement between such Company and others not parties to this Agreement in
effect on the effective date of this Agreement.




8.3           Waivers




Any
waiver at any time by a Company of its rights with respect to a default by any
other Company under this Agreement shall not be deemed a waiver with respect to
any subsequent default of similar or different nature.




8.4           Successors and Assigns; No
Third Party Beneficiary




This
Agreement shall inure to and be binding upon the successors and assigns of the
respective Companies, but shall not be assignable by any of the Companies
without the written consent of the other Companies, except upon foreclosure of a
mortgage or deed of trust.  Nothing expressed or mentioned or to which
reference is made in this Agreement is intended or shall be construed to give
any person or corporation other than the Companies any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained, expressly or by reference, or any schedule hereto, this Agreement,
any such schedule and any and all conditions and provisions hereof and thereof
being intended to be and being for the sole exclusive benefit of the Companies,
and for the benefit of no other person or corporation.




8.5           Amendment




It is
contemplated by the Companies that it may be appropriate from time to time to
change, amend, modify or supplement this Agreement or the schedules that are
attached to this Agreement, to reflect changes in operating practices or costs
of operations or for other reasons.  This Agreement or such schedules
may be changed, amended, modified or supplemented by an instrument in writing
executed by all of the Companies subject to any required approval or acceptance
for filing by the appropriate regulatory authorities.




8.6           Independent
Contractors




By
entering into this Agreement the Companies shall not become partners, and as to
each other and to third persons, the Companies shall remain independent
contractors in all matters relating to this Agreement.




8.7           Responsibility and
Liability




The
liability of the Companies shall be several, not joint or collective. Each
Company shall be responsible only for its obligations, and shall be liable only
for its


proportionate
share of the costs and expenses as provided in this Agreement, and any liability
resulting here from. Each Company will defend, indemnify, and save harmless the
other Companies hereto from and against any and all liability, loss, costs,
damages, and expenses, including reasonable attorney’s fees, caused by or
growing out of the gross negligence, willful misconduct, or breach of this
Agreement by such indemnifying Company.




IN
WITNESS WHEREOF, each Company has caused this Agreement to be executed and
attested by its duly authorized officers.




WEST
TEXAS UTILITIES COMPANY


Attest:





________________________                                                       
By:________________________________


Secretary                                                                                                      
AEP – Texas State President











PUBLIC
SERVICE COMPANY OF OKLAHOMA


Attest:





________________________                                                        By:________________________________


Secretary                                                                                                      
Vice President











SOUTHWESTERN
ELECTRIC POWER


COMPANY


Attest:





_________________________                                                      By:________________________________


Secretary                                                                                                      
Vice President











AMERICAN
ELECTRIC POWER SERVICE


CORPORATION


Attest:





_________________________                                                      By:________________________________


Secretary                                                                                                      
Senior Vice President








SCHEDULE
A




ALLOCATION
OF TRANSMISSION REVENUES




The
revenue the Transmission System Operator receives pursuant to Section 6.4 of the
Agreement for service provided in the SPP by the Companies under Parts II and
III of the Open Access Transmission Tariff, other than revenues received
pursuant to Sections 26 (Stranded Cost Recovery), 27 (Compensation for New
Facilities and Redispatch Costs), and 34.4 (Redispatch Charge) thereof and for
System and Facilities Studies made pursuant to Sections 19 (Additional Study
Procedures for Firm Point-to-Point Transmission Service Requests) and 32
(Additional Study Procedures for Network Integration Transmission Service
Requests), will be allocated among the Companies based on the ratios determined
in accordance with Schedule B and Schedule C.




Revenues
related to studies of the Transmission System performed for the benefit of
Transmission Customers under Part II or Part III of the Open Access Transmission
Tariff will be allocated among the Companies as applicable, in proportion to
their respective number of transmission pole miles on the Transmission System.
Direct Assignment Facilities revenues will be assigned to the Companies in
proportion to the related costs that each of them
incurred.  Assignment of revenues received from a third party related
to stranded cost or new transmission facilities shall be determined on a
case-by-case basis.





SCHEDULE
B




ANNUAL
TRANSMISSION REVENUE REQUIREMENTS RATIOS




From time
to time the Coordinating Committee will calculate for each of the Companies its
Transmission Revenue Requirements Ratios set forth below. A Company’s
Transmission Revenue Requirements Ratio for revenue received under Part III of
the Open Access Transmission Tariff shall be a fraction, the numerator of which
is the Company’s transmission revenue requirement that is used to calculate the
Annual Transmission Revenue Requirements amount for the AEP West Zone – SPP set
forth on Attachment H to the Open Access Transmission Tariff (herein called the
Company Revenue Requirement) and the denominator of which is the sum of the
Company Revenue Requirement for all of the Companies. A Company’s Transmission
Revenue Requirement Ratio for revenue received under Part II of the Open Access
Transmission Tariff shall be a fraction, the numerator of which is the Company’s
transmission revenue
requirement that is used to calculate the Annual Transmission Revenue
Requirements underlying the rates set forth for the AEP West Zone – SPP on
Schedules 7 and 8 to the Open Access Transmission Tariff and the denominator of
which is the sum of the Company Revenue Requirements for all of the
Companies.


Allocation
Ratio for Revenue Received Under Part II and Part III of the Open


Access
Transmission Tariff for service in the SPP.














Revenue
Requirement                                                      Revenue
Requirement Ratio


PSO                               $
37,353,669                                                              
                     
42.12112%


SWEPCO                     
$ 51,123,364                                                                                    
57.64823%


WTU                             $     
204,546                                                                                      
0.23065%


TOTAL                         $
88,681,579                                                                                    100.00000%





SCHEDULE
C




ALLOCATION
OF ANCILLARY SERVICE REVENUES




The
revenues the Transmission System Operator receives pursuant to Schedules 1 through 6
under the Open Access Transmission Tariff shall be allocated among the Companies
as set forth below. Future revisions to the revenue ratios set forth in Schedule
C will be made by the Companies’ making an appropriate filing with the
Commission, if required by law. Such changes shall become effective as of the
date accepted or approved by the Commission, subject to refund if the Commission
so orders.




(a)           Revenues
received from System Scheduling, System Control and Dispatch Service
(AEP West Zone – SPP) under Schedule 1 of the Open Access Transmission Tariff
will be allocated among PSO, SWEPCO and WTU based on the following
ratio:




PSO                      49.23%


SWEPCO             50.63%


WTU                      0.14%




(b)           Revenues
received from System Reactive Supply and Voltage Control from Generation Sources
Service (AEP West Zone – SPP) under Schedule 2 of the Open Access Transmission
Tariff will be allocated between PSO and SWEPCO based on the following
ratio:




PSO                      
39.53%


SWEPCO             
60.47%




(c)           Revenues
received from System Regulation and Frequency Response Service (AEP West Zone –
SPP) under Schedule 3 will be allocated between PSO and SWEPCO based on the
following ratio:


PSO                      40.00%


SWEPCO             60.00%




(d)           Revenues
received for and energy exchanged as part of System Energy Imbalance Service
rendered under Schedule 4 will be allocated in the same manner as margin from
off system sales and purchases as set forth in Service Schedule B to the
Restated and Amended AEP-West Operating Agreement.




(e)           Revenues
received from System Operating Reserve - Spinning Reserve Service (AEP West Zone
– SPP) under Schedule 5 and from System Operating Reserve – Supplemental Reserve
Service (AEP West Zone – SPP) under Schedule 6 for load served in the PSO/SWEPCO
Control Area will be allocated between PSO and SWEPCO based on the following
ratio:




PSO                      35.91%


SWEPCO             64.09%