COLUMBUS, Ohio, Oct. 26, 2005 – The Board of Directors of American Electric Power Co. (NYSE: AEP) today approved an increase in the regular quarterly cash dividend on a share of the company’s common stock to 37 cents a share from the previous 35 cents a share.

The dividend is payable Dec. 9, 2005, to shareholders of record as of Nov. 10, 2005, and is the company’s 382nd consecutive quarterly common stock cash dividend. AEP has paid a cash dividend on its common stock every quarter since July 1910.

“Increasing the dividend is a reward for our shareholders who have waited patiently as we completed a process announced in 2003 to strengthen the company’s financial standing and improve performance,” said Michael G. Morris, AEP’s chairman, president and chief executive officer. “Our strategic focus is on our strong utility operations, which are performing very well. We divested assets and eliminated activities that weren’t essential to our utility operations, things that – in many cases – were a drag on earnings. And we are on solid financial footing.”

The company outlined criteria to be used when making future dividend recommendations to the board, including achieving a long-term payout ratio of approximately 60 percent to 65 percent; targeting sustainable annual dividend increases at an annual growth rate that parallels the company’s projected annual long-term earnings growth rate; and the expectation that another dividend increase will be considered in January 2007.

“It remains our goal to maintain AEP’s position as one of the best performers in our sector, from both an operational and financial standpoint,” Morris said. “With today’s dividend increase, the company still retains adequate flexibility to make the necessary capital investments in our generation and wires businesses to attain our performance goals. We hope that today’s decision also marks the beginning of a period of slow but steady growth in the dividend.”

AEP announced in January 2003 that it was reducing the quarterly dividend to 35 cents per share from 60 cents per share, beginning with the dividend for second-quarter 2003, as part of a three-part plan to strengthen the company’s balance sheet and improve short-term and long-term performance. Other components of the plan were to reduce operations and maintenance expenses and to systematically dispose of assets that weren’t essential to the company’s core utility business. AEP continues to successfully manage operations and maintenance expenses and has essentially completed the divestiture of non-utility assets.

AEP will announce third-quarter earnings tomorrow, with the quarterly conference call to discuss company performance with financial analysts scheduled for 10 a.m. EDT tomorrow. The call will be broadcast live over the Internet at http://www.aep.com/go/webcasts .

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.
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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 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; 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.); AEP´s ability to constrain its operation and maintenance costs; AEP´s ability to sell assets at acceptable prices and on other acceptable terms, including rights to share in earnings derived from the assets subsequent to their sale; 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; volatility and changes in markets for electricity, natural gas, and other energy-related commodities; changes in utility regulation, including membership in 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 and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.