AUSTIN, Texas, Nov. 9, 2006 – AEP Texas Central Company (TCC) today filed a request with the Public Utility Commission of Texas (PUCT) to increase the transmission and distribution rates charged to retail electric providers (REPs).

The rate requests include the amounts that are charged the retail electric providers for the delivery of electricity over TCC’s transmission and distribution lines. TCC is seeking approval of an $82.7 million increase, which includes the expiration of $20 million in billing credits that have been in place since 2000.
 
If the request is approved by the PUCT, and assuming the REPs pass the full amount on to their customers, the increase for a residential customer using 1,000 kWh a month of electricity in the TCC service area would be around $4.17 a month, or less than a 3 percent increase on that customer’s total bill.

Current charges to the retail electric providers by TCC are not sufficient to cover the companies’ cost of delivering electricity, according to Charles Patton, AEP Texas president and chief operating officer.  He noted that the 2005 Earnings Monitoring Report filed with the PUCT showed a return on equity of about 2 percent for TCC. Most other investor-owned transmission and distribution companies in the Electric Reliability Council of Texas (ERCOT) are earning 10 percent or more.

Additional investment in transmission and distribution facilities, as well as cost increases that have occurred since 2005, have compounded the problem, Patton added. 
 
“We know the overall price of electricity has risen dramatically over the last few years, and it’s a major concern for all of us,” Patton said.  “It is important to remember, however, that TCC does not bill the end-use customer.  We bill the retail electric providers through our wires charge.  The REPs then consider the delivery charge along with their own supply costs and bill the retail end-use customer.  The charges associated with energy delivery in the TCC service territory is approximately 20 percent of a typical residential customer’s total bill.  While overall prices have increased substantially, the wires charges by TCC have remained essentially constant since retail competition began in 2002.”

The requested increase in the proceeding is based on a test year for the 12 months ending June 30, 2006.  The test year revenue requirement requested in the proceedings reflects the ongoing level of activity, investment and expenses that TCC will incur to provide safe and reliable transmission and distribution service in their service areas.  TCC is requesting a return on equity of 11.25 percent with a capital structure of approximately 60 percent debt/40 percent equity.

AEP Texas, a unit of American Electric Power, delivers electricity to 900,000 homes, businesses and industries in south and west Texas. AEP Texas provides regulated energy delivery service to consumers, regardless of which retail electric provider they choose. The region headquarters is in Corpus Christi.

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 36,000 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 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). American Electric Power, based in Columbus, Ohio, is celebrating its 100th anniversary in 2006.

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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 build or acquire generating capacity when needed at acceptable prices and terms and to recover those costs through applicable rate cases or competitive rates; 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, 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 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. and related matters); AEP´s ability to constrain its 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; 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; 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 implementation of EPACT and membership in 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, 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.