AUSTIN, Texas, June 17, 2005 – The Public Utility Commission of Texas (PUCT) on Thursday approved a settlement in the AEP Texas Central Company (TCC) rate case, which when coupled with earlier decisions in the case, results in a net decrease of $8.8 million in base rates charged to retail electric providers and wholesale transmission customers.

The $8.8 million decrease is comprised of a $14.1 million decrease in transmission rates charged to wholesale transmission customers and a $5.3 million or 1.5 percent increase in base distribution rates charged to retail electric providers. Retail electric providers also will see an increase in an AEP/CSW merger-related rate rider of $7.2 million when new rates are expected to go into effect.

TCC will see a positive impact of approximately $11 million in pre-tax earnings primarily due to implementation of revised depreciation rates, which results in a lower depreciation expense of approximately $9 million per year compared to the requested rates.

“Although we believe the original rate request we filed at the PUCT in 2003 reflected our cost to deliver electricity on behalf of the retail electric providers, Thursday’s decision brings closure to a very lengthy process and allows TCC to move forward,” said Charles Patton, AEP Texas president and chief operating officer.

TCC was requesting a $41.3 million base rate increase. In addition to a $10.5 million disallowance in affiliate expenses included in the settlement approved Thursday, the PUCT had approved disallowances totaling $39.6 million in earlier decisions associated with the case.

A final written order is anticipated in mid-July. Based on that schedule, new rates would go into effect in August.

TCC is one of two transmission and distribution utilities that comprise AEP Texas, a unit of American Electric Power. TCC provides energy delivery service to a 44,000-square-mile area of south Texas. TCC’s service territory generally includes the southern portion of Texas from just south of San Antonio to the Mexican border and from Bay City west to Eagle Pass. Major cities in TCC’s service area include Corpus Christi, McAllen, Harlingen, Laredo and Victoria. TCC’s service territory is entirely within the Electric Reliability Council of Texas (ERCOT). All of the retail customers in TCC’s service territory have retail choice. TCC provides distribution service to approximately 700,000 end use customers receiving electric service from 68 retail electric providers.

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.

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 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 and other substances; resolution of pending and future rate cases, negotiations and other regulatory decisions (including rate or other recovery for new investments and 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 constrain its operation and maintenance costs; the success of disposing of investments that no longer match AEP´s business model; AEP´s ability to sell assets at acceptable prices and on other acceptable terms; international and country-specific developments affecting foreign investments including the disposition of any 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 a strategy based on a 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 membership and integration in a regional transmission structure; 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 and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.