7/22/2004

AEP completes sale of three independent power plants; transfer of fourth plant awaits action by FERC

COLUMBUS, Ohio, July 22, 2004 - American Electric Power (NYSE: AEP) today completed the sale of its ownership interests in three independent power plants to wholly owned, indirect subsidiaries of The Bear Stearns Companies Inc. (NYSE: BSC). The sale was announced March 10.

Sold were:


  • AEP´s 47.75 percent interest in Brush II, a 68-megawatt gas-fired combined cycle cogeneration plant located in Brush, Colo.; AEP´s interest was 32 megawatts.
  • AEP´s 46.25 percent interest in Mulberry, a 120-megawatt gas-fired combined cycle cogeneration plant located in Bartow, Fla.; AEP´s interest was 56 megawatts.
  • AEP´s 50 percent interest in Orange, a 103-megawatt gas-fired combined cycle cogeneration plant located in Bartow, Fla.; AEP´s interest was 52 megawatts.

The sale of a fourth plant included in the March 10 transaction - AEP´s 50 percent interest in Thermo, a 272-megawatt gas-fired combined cycle cogeneration plant located in Ft. Lupton, Colo. - awaits approval by the Federal Energy Regulatory Commission. Closing on the Thermo sale is expected within 60 days.

AEP will receive approximately $156 million for its interests in the four independent power plants (IPPs). The divestiture of ownership interests in the IPPs will result in a pre-tax gain of approximately $100 million, primarily from the sale of the Florida plants, which will be recorded in the third quarter of 2004. AEP recorded a pre-tax impairment of $70 million for the Colorado IPPs in the third quarter of 2003.

The transaction is part of AEP´s plan to divest of assets that don´t fit with the company´s long-term strategy.

Proceeds from the sale will be used to reduce debt and strengthen the balance sheet.

American Electric Power owns more than 36,000 megawatts of generating capacity in the United States and is the nation´s largest electricity generator. AEP is also one of the largest electric utilities in the United States, with more than 5 million customers linked to AEP’s 11-state electricity transmission and distribution grid. The company is based in Columbus, Ohio.

-


These reports made by AEP and its registrant subsidiaries contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and 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; available sources and costs of fuels; 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; new legislation and government regulation including requirements for reduced emissions of sulfur, nitrogen, carbon and other substances; resolution of pending and future rate cases, negotiations and other regulatory decisions (including rate or other recovery for environmental compliance); oversight and/or investigation of the energy sector or its participants; resolution of litigation (including pending Clean Air Act enforcement actions and disputes arising from the bankruptcy of Enron Corp.); AEP’s ability to reduce its operation and maintenance costs; the success of disposing of investments that no longer match AEP’s corporate profile; AEP’s ability to sell assets at attractive prices and on other attractive terms; international and country-specific developments affecting foreign investments including the disposition of any current foreign investments; the economic climate and growth in AEP’s service territory and changes in market demand and demographic patterns; inflationary trends; AEP’s ability to develop and execute on a point of view regarding prices of electricity, natural gas, and other energy-related commodities; changes in the creditworthiness and number of 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 and preferred stock; volatility and changes in markets for electricity, natural gas, and other energy-related commodities; changes in utility regulation, including the establishment of a regional transmission structure; accounting pronouncements periodically issued by accounting standard-setting bodies; the performance of AEP’s pension plan; prices for power that AEP generates and sells at wholesale; and changes in technology and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.
Contact:
Pat D. Hemlepp
Director, Corporate Media Relations
614/716-1620

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