• 2008 second-quarter earnings $0.70 per share GAAP and ongoing
• Earnings improved over prior period despite milder weather in eastern service territories, impact of flooding on barge operations
• Wholesale activities, utility rate increases key contributors in quarter
• AEP reaffirms 2008 ongoing guidance range of between $3.10 and $3.30 per share

-Full news release and supplemental tables (PDF)

			2nd quarter ended June 30				6 months ended June 30
		2007	2008	Variance		2007	2008	Variance
Revenue ($ in billions)		3.1	3.5	0.4		6.3	7.0	0.7
Earnings ($ in millions):
	GAAP	180	281	101		451	854	403
	Ongoing	257	280	23		528	690	162
EPS ($):
	GAAP	0.45	0.70	0.25		1.13	2.13	1.00
	Ongoing	0.64	0.70	0.06		1.33	1.72	0.39
EPS based on 399mm shares in Q2 2007, 402mm in Q2 2008, 398mm in 6 mo. 2007 and 401mm in 6 mo. 2008

COLUMBUS, Ohio, July 31, 2008 – American Electric Power (NYSE: AEP) today reported 2008 second-quarter earnings, prepared in accordance with Generally Accepted Accounting Principles (GAAP), of $281 million, or $0.70 per share, compared with $180 million, or $0.45 per share, for second-quarter 2007. Ongoing earnings (earnings excluding special items) for second-quarter 2008 were $280 million, or $0.70 per share, compared with $257 million, or $0.64 per share, for second-quarter 2007.

GAAP earnings for second-quarter 2008 were $1 million higher than ongoing earnings, primarily because of an adjustment to discontinued operations in the United Kingdom. A full reconciliation of GAAP earnings to ongoing earnings for the quarter and year to date is included in tables at the end of this news release.

“Our ongoing earnings for the second quarter were better than in the same period last year, even with milder weather in our eastern states and high water on the Ohio and Mississippi rivers that made operations difficult for our MEMCO barges,” said Michael G. Morris, AEP’s chairman, president and chief executive officer. “Improved results from our activities in wholesale markets – from our Generation and Marketing unit and our traditional off-system sales of power – contributed to our earnings improvement, as did our continued success in regulatory efforts to adjust utility rates to reflect the increased costs of providing service to our customers.”

EARNINGS GUIDANCE

AEP reaffirmed its ongoing earnings guidance range for 2008 of between $3.10 and $3.30 per share. In providing ongoing earnings guidance, there could be differences between ongoing earnings and GAAP earnings for matters such as, but not limited to, divestitures or changes in accounting principles. AEP management is not able to estimate the impact, if any, on GAAP earnings of these items. Therefore, AEP is not able to provide a corresponding GAAP equivalent for earnings guidance.

	Q2 07	Q2 08	Variance		6 mo. 07	6 mo. 08	Variance
Utility Operations	238	263	25		491	673	182
Ongoing EPS	0.60	0.66	0.06		1.24	1.67	0.43
MEMCO	7	3	(4)		22	10	(12)
Ongoing EPS	0.02	0.01	(0.01)		0.06	0.03	(0.03)
Generation and Marketing	15	26	11		14	27	13
Ongoing EPS	0.03	0.06	0.03		0.03	0.07	0.04
All Other	(3)	(12)	(9)		1	(20)	(21)
Ongoing EPS	(0.01)	(0.03)	(0.02)		0.00	(0.05)	(0.05)
Ongoing Earnings	257	280	23		528	690	162
Ongoing EPS	0.64	0.70	0.06		1.33	1.72	0.39
EPS based on 399mm shares in Q2 2007, 402mm in Q2 2008, 398mm in 6 mo. 2007 and 401mm in 6 mo. 2008

Ongoing earnings from Utility Operations increased by $25 million during second-quarter 2008 compared with the second quarter of 2007. Increased rates from retail and municipal and cooperative customers and higher gross margins from off-system sales were somewhat offset by higher expenses, including for fuel, than those recorded in the same period in 2007.

AEP’s MEMCO barge operations reported lower ongoing earnings than in the same period in 2007 because of continued high water conditions from flooding on the Ohio and Mississippi rivers and reduced northbound loadings. Operating costs during the current quarter were higher because sustained high-water conditions reduced tow sizes, restricted operating hours and increased fuel consumption. A reduction in imports through the Gulf of Mexico, a result of the slowing United States economy and weak U.S. dollar, continued to depress northbound loadings.

Favorable marketing contracts, higher gross margins at AEP’s Oklaunion power plant in Texas and improved earnings from AEP’s wind farms increased ongoing earnings for Generation and Marketing in the quarter when compared with the prior period. Generation and Marketing includes AEP’s non-regulated generating, marketing and risk management activities, primarily in the Electric Reliability Council of Texas (ERCOT) area.

All Other, which includes the parent company and other investments, was lower for the quarter when compared with the prior period because of higher interest expense from new hybrid debt and commercial paper at the parent and lower interest income because of a decline in investment balances.

	Q2 07	Q2 08	Variance		6 mo. 07	6 mo. 08	Variance
East Regulated Integrated Utilities	453	528	75		1,057	1,122	65
Ohio Companies	610	551	(59)		1,213	1,247	34
West Regulated Integrated Utilities	229	257	28		429	480	51
Texas Wires	131	134	3		244	256	12
Off-System Sales	203	243	40		384	464	80
Transmission Revenue - 3rd Party	71	82	11		143	162	19
Other Operating Revenue	148	144	(4)		289	289	0
Utility Gross Margin	1,845	1,939	94		3,759	4,020	261
Operations & Maintenance	(770)	(840)	(70)		(1,598)	(1,587)	11
Depreciation & Amortization	(365)	(365)	0		(748)	(720)	28
Taxes Other Than Income Taxes	(187)	(188)	(1)		(371)	(382)	(11)
Interest Expense & Preferred Dividend	(207)	(218)	(11)		(386)	(428)	(42)
Other Income & Deductions	27	49	22		66	91	25
Income Taxes	(105)	(114)	(9)		(231)	(321)	(90)
Utility Operations Ongoing Earnings	238	263	25		491	673	182
Ongoing EPS	0.60	0.66	0.06		1.24	1.67	0.43
EPS based on 399mm shares in Q2 2007, 402mm in Q2 2008, 398mm in 6 mo. 2007 and 401mm in 6 mo. 2008

Retail Sales – Results for second-quarter 2008 were higher than in the same period in 2007, primarily because of the impact of rate changes for the Ohio Companies and for AEP’s utilities in Virginia, West Virginia, Oklahoma and Texas. Weather was milder than last year and reduced margins by $20 million. In AEP’s eastern territory, heating degree-days in the second quarter were 22 percent below normal and 39 percent lower than in the prior period; cooling degree-days in the second quarter were 2 percent below normal and 26 percent lower than in the prior period. In AEP’s western territory, cooling degree-days in the second quarter were 3 percent above normal and 8 percent higher than in the prior period.

Off-System Sales – Gross margins from Off-System Sales for second-quarter 2008 were $40 million higher than those in second-quarter 2007, primarily because of higher power prices and higher volumes.

Transmission Revenues – Transmission Revenues for second-quarter 2008 increased $11 million from the same period in 2007, primarily from AEP’s transmission assets in the Southwest Power Pool and ERCOT regions.

Operations & Maintenance Expense – Operations & Maintenance Expense for the quarter increased $70 million from the same period last year, primarily because of increased spending across all business functions for maintenance and higher general expenses primarily related to employee benefits.

Depreciation & Amortization – Depreciation & Amortization for the quarter was essentially flat with the same period in 2007. Lower regulator-approved depreciation rates in Indiana, Michigan, Oklahoma and Texas and lower Ohio regulatory asset amortization in the quarter were offset by higher depreciable property balances and prior-year adjustments related to the 2007 Virginia base rate case.

Interest Expense & Preferred Dividends – The increase in Interest Expense for second-quarter 2008 is primarily because of increased long-term debt and higher interest rates on variable-rate debt.

Other Income & Deductions – Other Income & Deductions increased in second-quarter 2008, primarily because of interest income related to a claim for a federal tax refund and higher carrying-cost income.

WEBCAST

American Electric Power’s quarterly conference call with financial analysts will be broadcast live over the Internet at 10 a.m. EDT today at http://www.aep.com/go/webcasts. The webcast will include audio of the conference call and visuals of charts and graphics referred to by AEP management during the call. The charts and graphics will be available for download at http://www.aep.com/go/webcasts .

The call will be archived on http://www.aep.com/go/webcasts for use by those unable to listen during the live webcast. Archived calls also are available as podcasts.

Minimum requirements to listen to broadcast: The Windows Media Player software, free from http://windowsmedia.com/download, and at least a 56Kbps connection to the Internet.

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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 more than 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.

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AEP’s earnings are prepared in accordance with accounting principles generally accepted in the United States and represent the company’s earnings as reported to the Securities and Exchange Commission. AEP’s management believes that the company’s ongoing earnings, or GAAP earnings adjusted for certain items as described in the news release and charts, provide a more meaningful representation of the company’s performance. AEP uses ongoing earnings as the primary performance measurement when communicating with analysts and investors regarding its earnings outlook and results. The company also uses ongoing earnings data internally to measure performance against budget and to report to AEP’s board of directors.

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-Full news release and supplemental tables (PDF)

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This report made by American Electric Power and its Registrant Subsidiaries contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the registrants 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 and performance of fuel suppliers and transporters; availability of generating capacity and the performance of AEP’s generating plants; 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 company’s 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 canceled) 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; 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 disputes arising from the bankruptcy of Enron Corp. and related matters); AEP’s ability to constrain operation and maintenance costs; the economic climate and growth in AEP’s service territory and changes in market demand and demographic patterns; inflationary and 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 refinance existing debt at attractive rates; 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 the recently passed utility law in Ohio and the allocation of costs within regional transmission organizations; accounting pronouncements periodically issued by accounting standard-setting 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; prices for power that AEP generates and sells at wholesale; changes in technology, particularly with respect to new, developing or alternative sources of generation; other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.