COLUMBUS, Ohio, Jan. 13, 2009 – American Electric Power (NYSE: AEP) subsidiary Southwestern Electric Power Co. (SWEPCO) has signed a long-term power purchase agreement for renewable wind energy with Majestic Wind Power LLC, a subsidiary of Babcock & Brown Renewable Holdings Inc.

Through the 20-year agreement, SWEPCO will purchase all of the output, including renewable energy credits, of the 79.5-megawatt Majestic Wind Farm located northeast of Amarillo in Carson County, Texas. The project, consisting of 53 General Electric 1.5-megawatt SLE wind turbines and associated equipment, is more than 95 percent complete and expected to be online by the end of this month. Pricing terms are confidential.

“We continue to diversify AEP’s power generation mix with wind and other renewables, along with new baseload generation using advanced coal technologies, in order to meet our customers’ future electricity needs,” said Michael G. Morris, AEP chairman, president and chief executive officer. “This latest agreement is part of AEP’s voluntary plans, announced in 2007, to add 1,000 megawatts of new wind energy by 2011 as a component of our comprehensive strategy to address greenhouse gas emissions.”

The agreement with Majestic Wind Power LLC brings AEP’s long-term renewable-energy purchase commitments up to 455 megawatts since the 1,000-megawatt goal was established. AEP companies have additional requests for proposals out for up to 500 megawatts of renewable energy.

“As we have noted previously, when you add our wind capabilities that were in place prior to the establishment of the goal – 310 megawatts of wind generation in Texas owned by AEP and 467 megawatts of long-term wind-energy purchase agreements in Texas and Oklahoma – it’s clear that our energy portfolio now includes a significant amount of renewable energy,” Morris said.

“We also continue to advocate for long-term extension of the federal Production Tax Credit to provide the stimulus needed for additional renewable energy development, Morris said. “At a time when the nation is looking for solutions to serious economic and energy issues, this important tax credit will provide a more stable basis for moving renewable energy forward.” Congress recently provided another short-term extension of the Production Tax Credit through the end of 2009.

The Majestic Wind agreement results from a SWEPCO request for proposals for renewable energy resources announced in April 2008. The Majestic Wind Farm is interconnected to the transmission system of Xcel Energy’s Southwestern Public Service Company subsidiary, which is part of the nine-state Southwest Power Pool, as is SWEPCO.

“The Majestic Wind Farm allows SWEPCO to tap into some of the best wind resources in the Texas Panhandle,” said Paul Chodak, SWEPCO president and chief operating officer. “We are pleased to add this renewable resource to our generation mix, and we look forward to adding more renewable energy in the future,” he said.

“As we pursue renewable energy, as well as increased energy efficiency, we are working to ensure that our customers’ future electricity needs can be reliably and affordably met 24 hours a day,” Chodak said. “That’s why our strategy also includes the highly efficient ultra-supercritical coal unit and combined-cycle natural gas unit now under construction in Arkansas and Louisiana to meet baseload and intermediate needs. We believe this broad-based approach is both necessary and in the best interests of the customers we serve in three states.” 

SWEPCO serves more than 473,500 customers in three states, including 113,500 in western Arkansas, 180,000 in Northwest Louisiana, and 180,000 in East and North Texas. SWEPCO’s headquarters are in Shreveport, La. News releases and other information about SWEPCO can be found at www.swepco.com.

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 and north Texas). AEP’s headquarters are in Columbus, Ohio. News releases and other information about AEP can be found at www.aep.com.

This report made by AEP and its Registrant 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 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 AEP’s ability to obtain any necessary regulatory approvals and permits) when needed at acceptable prices and terms and to recover those costs 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; 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 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; 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 the potential for new legislation in Ohio and membership in and integration into regional transmission organizations; 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; other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.