COLUMBUS, Ohio, July 23, 2001 - American Electric Power (NYSE: AEP) announced today it has executed a definitive agreement under which AEP Resources Inc., a wholly owned subsidiary of AEP, will acquire the stock of MEMCO Barge Line Inc. from the Electric Fuels Corporation subsidiary of Progress Energy (NYSE: PGN).

"The acquisition of MEMCO is another important part of our growth strategy to create value at various points along the energy chain," said Paul D. Addis, executive vice president of AEP´s Wholesale activities. "In this case, the coupling of the MEMCO barge assets with our existing fleet will add earnings and significant information flow in the sometimes-neglected transportation component of our business."

Under terms of the agreement, the purchase price of $270 million includes the early termination of lease financing related to certain assets of MEMCO. The proposed transaction, which is subject to regulatory approvals, is expected to close within 60 days. The acquisition is expected to be immediately accretive to AEP´s earnings.

The acquisition adds 1,200 hopper barges and 30 towboats to AEP´s 605 barges and 15 towboats, placing AEP among the leading barge operators in the country. MEMCO has added 860 new barges to its fleet between 1993 and 2000, reducing the average age of the fleet to less than seven years.

With the acquisition, AEP will be a full-service carrier throughout the United States´ inland waterways. The company´s core operations will be along the Ohio and Lower Mississippi rivers and along the Gulf Coast, with operations extending to the Upper Mississippi and Illinois, Tennessee-Tombigbee, Black, Monongahela and the Arkansas rivers.

The combined business unit will move roughly 50 million tons of dry bulk commodities per year. The company´s customers will include major coal and grain producers and exporters, agricultural processing companies, producers and consumers of basic bulk commodities such as petroleum coke, cement, fertilizer, salt, construction materials, forestry products, steel, ores, alloys and scrap.

American Electric Power is a multinational energy company based in Columbus, Ohio. AEP owns and operates more than 38,000 megawatts of generating capacity, making it America’s largest generator of electricity. The company is also a leading wholesale energy marketer and trader, ranking second in the U.S. in electricity volume with a growing presence in natural gas. AEP provides retail electricity to more than 7 million customers worldwide and has holdings in the U.S. and select international markets. Wholly owned subsidiaries are involved in power engineering and construction services, energy management and telecommunications.

The comments set forth above include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, including (1) statements concerning the Company’s plans, objectives, expected performance and expenditures and (2) other statements that are other than statements of historical fact. These forward-looking statements reflect assumptions, and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially from forward-looking statements are electric load and customer growth, abnormal weather conditions, availability of generating capacity, the ability to recover net regulatory assets and other stranded costs in connection with deregulation of generation, the outcome of environmental regulation and litigation, the impact of fluctuation in commodity prices and interest rates, and other risks and unforeseen events over which the Company has no control. The reader is also directed to the Company’s periodic filings with the Securities and Exchange Commission for additional factors that may impact the Company’s results of operations and financial condition. Furthermore, historical results may not be indicative of the Company’s future performance.