AEP Sets 2010 Ongoing Earnings Guidance, Capital Expenditures Budget Formation of a transmission company planned as part of grid strategy

COLUMBUS, Ohio. – American Electric Power (NYSE: AEP) has set its ongoing earnings guidance range and capital expenditures budget for 2010. AEP will also form a transmission company as part of its strategy to pursue transmission investment opportunities in AEP’s traditional footprint.

AEP management will be discussing the company’s financial outlook and strategic direction during meetings with investors at the annual Edison Electric Institute Financial Conference that begins today in Hollywood, Fla.

AEP anticipates that 2010 ongoing earnings will be between $2.80 and $3.20 per share. Ongoing earnings guidance for 2009, which reflects last week’s upside adjustment, remains at $2.90 to $3.05 per share. Ongoing earnings represent earnings from continuing operations, which exclude special or one-time items included in the earnings prepared in accordance with generally accepted accounting principles.

“Our earnings projections for 2010 are driven by new rate recovery activity underway in several jurisdictions across our service territories, an expected increase in off-system sales of electricity as that market improves after a weak year in 2009, and a general increase in retail load,” said Michael G. Morris, AEP’s chairman, president and chief executive officer.

AEP projects that capital expenditures for utility operations will decrease to $1.993 billion in 2010 from the estimated $2.466 billion in 2009, reflecting AEP’s conservative approach for near-term capital expenditures.

AEP will form a transmission company, or Transco, to pursue new transmission opportunities within the company’s existing 11-state footprint, a key component in a three-part national transmission strategy. AEP has existing and planned transmission projects in the Electric Reliability Council of Texas (ERCOT) through its Electric Transmission Texas joint venture with MidAmerican Energy Holdings Company. AEP is also pursuing transmission projects outside its footprint and outside ERCOT through joint ventures with numerous other companies, including Electric Transmission America, AEP’s broader partnership with MidAmerican.

“The Transco will be our vehicle for much of AEP’s future on-system, wholly-owned transmission investment,” Morris said. “These investments will include a wide range of on-system transmission improvements, things like greenfield projects, station additions and system upgrades. Pursuing these activities in a Transco, with formula rates adjusted annually by the Federal Energy Regulatory Commission (FERC), benefits customers by enhancing AEP’s access to capital. This enables the company to undertake substantial new investment while relieving our operating company balance sheets of the burden of meeting those capital demands, thereby allowing them to put capital to work on distribution and generation needs.”

AEP expects to invest $118 million in Transco activities in 2010.

“We are seeking state utility status for the Transco in states where that designation is required, and we will join both PJM and Southwest Power Pool as a transmission owner,” Morris said. “We plan to file a FERC tariff for the Transco later this year, with rates effective in mid-2010.”