AEP- News Releases- AEP Places Carbon Capture Commercialization On Hold, Citing... Page 1 of 3 

•,' ..._ I I liJ Home Newsroom Corporate News Releases 

AEP Places Carbon Capture Commercialization On Hold, Citing Uncertain 

Status Of Climate Policy, Weak Economy 

COLUMBUS, Ohio, July 14, 2011 -American Electric Power (NYSE: AEP) is terminating its cooperative 

agreement with the U.S. Department of Energy and placing its plans to advance carbon dioxide capture and 

storage (CCS) technology to commercial scale on hold, citing the current uncertain status of U.S. climate 

policy and the continued weak economy as contributors to the decision. 

"We are placing the project on hold until economic and policy conditions create a viable path forward ," said 

Michael G. Morris, AEP chairman and chief executive officer. "With the help of Alstom, the Department of 

Energy and other partners, we have advanced CCS technology more than any other power generator with 

our successful two-year project to validate the technology. But at this time it doesn't make economic sense to 

continue work on the commercial-scale CCS project beyond the current engineering phase. 

"We are clearly in a classic 'which comes first?' situation," Morris said. "The commercialization of this 

technology is vital if owners of coal-fueled generation are to comply with potential future climate regulations 

without prematurely retiring efficient, cost-effective generating capacity. But as a regulated utility, it is 

impossible to gain regulatory approval to recover our share of the costs for validating and deploying the 

technology without federal requirements to reduce greenhouse gas emissions already in place. The 

uncertainty also makes it difficult to attract partners to help fund the industry's share." 

In 2009, AEP was selected by the Department of Energy (DOE) to receive funding of up to $334 million 

through the Clean Coal Power Initiative to pay part of the costs for installation of a commercial-scale CCS 

system at AEP's Mountaineer coal-fueled power plant in New Haven, W.Va. The system would capture at 

least 90 percent of the carbon dioxide (C02) from 235 megawatts of the plant's 1,300 megawatts of capacity. 

The captured C02, approximately 1.5 million metric tons per year, would be treated and compressed , then 

injected into suitable geologic formations for permanent storage approximately 1.5 miles below the surface. 

Plans were for the project to be completed in four phases, with the system to begin commercial operation in 

2015. AEP has informed the DOE that it will complete the first phase of the project (front-end engineering 

and design, development of an environmental impact statement and development of a detailed Phase II and 

Phase Ill schedule) but will not move to the second phase. 

DOE's share of the cost for completion of the first phase is expected to be approximately $16 million, half the 

expenses that qualify under the DOE agreement. 

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AEP -News Releases - AEP Places Carbon Capture Commercialization On Hold, Citing ... Page 2 of 3 

AEP and partner Alstom began operating a smaller-scale validation of the technology in October 2009 at the 

Mountaineer Plant, the first fully-integrated capture and storage facility in the world. That system captured up 

to 90 percent of the C02 from a slipstream of flue gas equivalent to 20 megawatts of generating capacity and 

injected it into suitable geologic formations for permanent storage approximately 1.5 miles below the surface. 

The validation project, which received no federal funds, was closed as planned in May after meeting project 

goals. Between October 2009 and May 2011, the life of the validation project, the CCS system operated 

more than 6,500 hours, captured more than 50,000 metric tons of C02 and permanently stored more than 

37,000 metric tons of C02. 

"The lessons we learned from the validation project were incorporated into the Phase I engineering for the 

commercial-scale project," Morris said. 

American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 

11 states. AEP ranks among the nation's largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the 

U.S. AEP also owns the nation's largest electricity transmission system, a nearly 39,000-mile network that includes more 765-kilovolt 

extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP's transmission system directly or indirectly 

serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 

eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission 

system that covers much of Texas. AEP's utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West 

Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and 

Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP's headquarters are in Columbus, Ohio. 

This report made by American Electric Power and its Registrant Subsidiaries contains forward-looking statements within the meaning of 

Section 21 E of the Securities Exchange Act of 1934. Although AEP and each of its Registrant Subsidiaries believe that their expectations 

are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to 

be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the 

forward-looking statements are: the economic climate and growth in, or contraction within, AEP's service territory and changes in market 

demand and demographic patterns; inflationary or deflationary interest rate trends; volatility in the financial markets, particularly 

developments affecting the availability of capital on reasonable terms and developments impairing AEP's ability to finance new capital 

projects and refinance existing debt at attractive rates; the availability and cost of funds to finance working capital and capital needs, 

particularly during periods when the time lag between incurring costs and recovery is long and the costs are material; electric load and 

customer growth; weather conditions, including storms, and AEP's ability to recover significant storm restoration costs through applicable 

rate mechanisms; available sources and costs of, and transportation for, fuels and the creditworthiness and performance of fuel suppliers 

and transporters; availability of necessary generating capacity and the performance of AEP's generating plants; AEP's ability to recover 

Indiana Michigan Power's Donald C. Cook Nuclear Plant Unit 1 restoration costs through warranty, insurance and the regulatory process; 

AEP's ability to recover regulatory assets and stranded costs in connection with deregulation; AEP's ability to recover increases in fuel 

and other energy costs through regulated or competitive electric rates; AEP's ability to build or acquire generating capacity, including the 

Turk Plant, and transmission line facilities (including the ability to obtain any necessary regulatory approvals and permits) when needed at 

acceptable prices and terms and to recover those costs (including the costs of projects that are cancelled) through applicable rate cases 

or competitive rates; new legislation, litigation and government regulation, including requirements for reduced emissions of sulfur, 

nitrogen, mercury, carbon, soot or particulate matter and other substances or additional regulation of fly ash and similar combustion 

products that could impact the continued operation and cost recovery of AEP's plants; timing and resolution of pending and future rate 

cases, negotiations and other regulatory decisions (including rate or other recovery of new investments in generation, distribution and 

transmission service and environmental compliance); resolution of litigation (including AEP's dispute with Bank of America); AEP's ability 

to constrain operation and maintenance costs; AEP's ability to develop and execute a strategy based on a view regarding prices of 

electricity, natural gas and other energy-related commodities; changes in the creditworthiness of the counterparties with whom AEP has 

contractual arrangements, including participants in the energy trading market; actions of rating agencies, including changes in the ratings 

of debt; volatility and changes in markets for electricity, natural gas, coal, nuclear fuel and other energy-related commodities; changes in 

utility regulation, including the implementation of electric security plans and related regulation in Ohio and the allocation of costs within 

regional transmission organizations, including PJM and SPP; accounting pronouncements periodically issued by accounting standardsetting bodies; the impact of volatility in the capital markets on the value of the investments held by AEP's pension, other postretirement 

benefit plans and nuclear decommissioning trust and the impact on future funding requirements; prices and demand for power that AEP 

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AEP -News Releases - AEP Places Carbon Capture Commercialization On Hold, Citing ... Page 3 of 3 

generates and sells at wholesale; changes in technology, particularly with respect to new, developing or alternative sources of generation; 

and other risks. and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other 

catastrophic events. 

MEDIA CONTACT: 

Pat D. Hemlepp 

Director, Corporate Media Relations 

614/716-1620 

ANALYSTS CONTACT: 

Julie Sherwood 

Director, Investor Relations 

614fi16-2663 

https :/ /www.aep.com/newsroornlnewsreleases/?id= 1 704 8/2/2015