COLUMBUS, Ohio, June 26, 2006 – American Electric Power (NYSE: AEP) and its operating unit Indiana Michigan Power (I&M) have signed ten, multi-year wholesale power supply agreements with municipal utilities in Indiana and Michigan with a combined peak load of more than 320 megawatts (MW).


In Indiana, I&M entered into new wholesale supply agreements with the Town of Avilla, the City of Bluffton, the City of Garrett, the City of Mishawaka, the Town of New Carlisle, and the Town of Warren. In Michigan, I&M entered into new wholesale supply agreements with the City of Niles, the City of South Haven, the City of Sturgis, and the Village of Paw Paw. The new multi-year contracts with these entities replace existing agreements that expire June 30.


“I&M is pleased that these municipalities have decided to purchase wholesale power from us,” said Marsha P. Ryan, I&M president and chief operating officer. “We pride ourselves on providing reliable, affordable energy that will help develop strong communities and attract new jobs.”


“Mishawaka Utilities will be able to continue to provide the best electric reliability and customer service possible at competitive rates. Considering the volatility of the electricity market, this contract represents the best cost-effective agreement for our customers. A modest increase in electric bills in exchange for a long-term supply contract and rate structure stability strikes a good balance. We look forward to our continued partnership with I&M.” said Jim Schrader, Mishawaka Utilities General Manager.


“The City of Niles, Michigan, has enjoyed a long-standing wholesale power relationship with I&M over many years resulting in low energy costs for our customers. After considering several different alternatives to meet the energy needs of our municipal utility, I feel that this new power agreement with I&M is in the best interest of our customers and will bring stability to our rate structure in years to come. We look forward to our continued relationship with I&M.” said Jim Lehmkuhl, Niles Utilities Department Manager.


AEP and I&M were selected through competitive bid processes to serve all of the Indiana and Michigan loads. Pricing details are not being disclosed for competitive reasons.


“Many municipal and cooperative utilities desire a stable power supply over the long term instead of relying upon the volatile wholesale market,” said Greg Hall, AEP vice president - energy marketing. “These ten new long-term contracts with municipal utilities in Indiana and Michigan demonstrate the commitment of AEP and its operating companies to the long-term power supply needs of the communities we serve.”


AEP is one of the nation’s largest wholesale suppliers of generation to municipal utilities and cooperatives. In 2006, AEP will provide approximately 3,275 megawatts of full-requirements power to 55 municipal utilities and 25 electric cooperatives in the United States.


Indiana Michigan Power (I&M) is headquartered in Fort Wayne, and its 2,650 employees serve more than 580,000 customers in Indiana and Michigan. It operates 3,595 MW of coal-fired generation in Indiana, 2,110 MW of nuclear generation in Michigan, and 22 MW of hydro generation in both states.


I&M is part of American Electric Power, 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 36,000 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 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 Texas). American Electric Power, based in Columbus, Ohio, is celebrating its 100th anniversary in 2006.


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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 of the counterparties with whom AEP has contractual arrangements, including 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, particularly with respect to new, developing or alternative sources of generation, and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.