AEP Selects GE and Bechtel to Design Clean-Coal Power Plant

General Electric and Bechtel alliance to begin front-end engineering and design process for AEP's proposed IGCC plant

COLUMBUS, Ohio, Sept. 29 /PRNewswire-FirstCall/ -- American Electric Power (NYSE: AEP) has signed an agreement with GE Energy and Bechtel Corporation to begin the front-end engineering design process for a commercial-scale, Integrated Gasification Combined Cycle (IGCC) clean-coal plant in the 600- megawatt range. This will be the first such engineering and design agreement undertaken for an IGCC plant of this scale.

"We're thrilled to be moving forward with our goal of building the next generation of coal-fueled power plants that offer enhanced environmental performance. We need additional generation, and we believe an IGCC plant, over its expected lifespan, offers the right, environmentally responsible, cost- effective option for our customers," said Michael G. Morris, AEP's chairman, president and chief executive officer.

"At AEP, we've worked for more than a decade to help push clean-coal generation from theory to commercial viability and now to mainstream use. Our success with this project -- ramping up the technology to build the first large-scale, baseload IGCC plant in the country -- will help our industry continue to rely on our nation's vast domestic coal reserves to generate much- needed, affordable electricity with less environmental impact," Morris said.

The front-end engineering design process is a detailed process that leads to a more accurate determination of the costs for a construction project. For AEP's proposed IGCC plant, the front-end engineering design process will require 10 to 12 months. Then, based on the status of regulatory proceedings, and engineering and cost targets, AEP would hope to move forward with awarding contracts for final engineering, procurement and construction.

AEP announced Aug. 31, 2004, its intent to build approximately 1,200- megawatts of commercial-scale, baseload IGCC generation. The company's AEP Ohio operating companies filed for cost recovery March 18, 2005, with the Public Utilities Commission of Ohio (PUCO) to build an IGCC plant in Meigs County, Ohio. AEP Ohio hopes to have a decision from the PUCO by the end of 2005. AEP is moving forward with the front-end engineering design process for the IGCC technology in order to remain on schedule to complete an IGCC plant in 2010. AEP intends to build at least another 600 megawatts of IGCC generation in its eastern operating area by 2013. A location for additional IGCC generation has not been determined.

IGCC plants turn coal into a synthesis gas and eliminate most of the sulfur dioxide, nitrogen oxides, mercury and other emissions before the gas is used to fuel a combustion turbine generator. The hot exhaust gases are then used to heat steam to drive a steam turbine generator. The technology uses less water and has lower emissions than a conventional coal-fired plant with currently required emission control equipment. Additionally, IGCC design allows for potential capture and sequestration of carbon dioxide (CO2) at a lower cost than conventional coal-fired plants.

American Electric Power owns more than 36,000 megawatts of generating capacity in the United States and is the nation's largest electricity generator. AEP is also one of the largest electric utilities in the United States, with more than 5 million customers linked to AEP's 11-state electricity transmission and distribution grid. The company is based in Columbus, Ohio.

This report made by AEP and certain of its subsidiaries contains forward- looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its registrant subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: electric load and customer growth; weather conditions, including storms; available sources and costs of, and transportation for, fuels and the creditworthiness of fuel suppliers and transporters; availability of generating capacity and the performance of AEP's generating plants; the ability to recover regulatory assets and stranded costs in connection with deregulation; the ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; new legislation, litigation and government regulation including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon and other substances; timing and resolution of pending and future rate cases, negotiations and other regulatory decisions (including rate or other recovery for new investments, transmission service and environmental compliance);resolution of litigation (including pending Clean Air Act enforcement actions and disputes arising from the bankruptcy of Enron Corp.); AEP's ability to constrain its operation and maintenance costs; AEP's ability to sell assets at acceptable prices and on other acceptable terms, including rights to share in earnings derived from the assets subsequent to their sale; the economic climate and growth in AEP's service territory and changes in market demand and demographic patterns; inflationary trends; AEP's ability to develop and execute a strategy based on a view regarding prices of electricity, natural gas, and other energy-related commodities; changes in the creditworthiness and number of participants in the energy trading market; changes in the financial markets, particularly those affecting the availability of capital and AEP's ability to refinance existing debt at attractive rates; actions of rating agencies, including changes in the ratings of debt; volatility and changes in markets for electricity, natural gas, and other energy-related commodities; changes in utility regulation, including membership and integration into regional transmission structures; accounting pronouncements periodically issued by accounting standard-setting bodies; the performance of AEP's pension and other postretirement benefit plans; prices for power that AEP generates and sells at wholesale; changes in technology and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.

CONTACT: Media, Melissa McHenry, Manager, Corporate Media Relations,
+1-614-716-1120, or Jill Sloat, Vice President, Investor Relations,
+1-614-716-2885, both of American Electric Power

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