COLUMBUS, Ohio, Nov. 28, 2011 – AEP Ohio, a unit of American Electric Power (NYSE: AEP), has reached an uncontested settlement agreement with the parties involved in its distribution rate case pending before the Public Utilities Commission of Ohio (PUCO). The proposed agreement provides for no increase in base distribution rates for AEP Ohio and allows the company to recover previously uncollected costs associated with past distribution expenditures.

           “All our customers will benefit from not having base rates increased, while AEP Ohio will be able to recover costs associated with distribution investments that it has already incurred to serve those customers,” said Joe Hamrock, AEP Ohio president and chief operating officer. “This is a fair agreement that, considered along with the previously filed settlement in the company's Electric Security Plan (ESP), will provide rate stability for customers and continued distribution investment by the company moving forward.”

           It has been nearly two decades since the AEP Ohio companies filed rate cases in which distribution rates were considered for their respective service areas (Columbus Southern Power – 1991, Ohio Power – 1994). Thirteen organizations, representing a broad range of customer, environmental and various stakeholder groups, including the Ohio Consumers’ Counsel and the PUCO staff, agreed to the settlement. The case, filed with the PUCO on Wednesday, Nov. 23, now goes to PUCO commissioners for final consideration.

           The settlement agreement also adds $1 million per year to the company’s Partnership with Ohio (PWO) fund, a program that provides additional help for families in need in the areas of health, hunger and housing. The PWO fund programs are designed to assist families with incomes up to 200 percent of the federal poverty level, a segment of the population that often does not qualify for state and federal aid. The PWO fund is expected to total $4 million starting in 2012, including the $3 million per year commitment from AEP shareholder contributions made in the company’s ESP settlement.

           Since the last base distribution rate cases, the AEP Ohio companies have deferred approximately $327 million of costs as regulatory assets for future recovery with PUCO approval.  The settlement agreement calls for amortization and recovery of these assets through a Deferred Asset Recovery Rider over a seven-year period beginning in 2012.  The impact of those charges is being partially offset by a $50.2 million credit that will be applied only to residential customers’ over a 41-month period.

          The settlement agreement recognizes the anticipated revenues from the Distribution Investment Rider in the company’s proposed ESP that will allow the company to invest in new distribution assets to maintain and improve reliability.

          If the settlement agreement is approved by PUCO commissioners, the proposed cost, including the credit, for a typical Columbus Southern Power residential customer using 1,000 kilowatt hours (kWh) per month is $1.89 monthly. A typical Ohio Power residential customer using 1,000 kWh per month will see a $0.98 per month increase.

          AEP Ohio provides electricity to nearly 1.5 million customers of major AEP subsidiaries Columbus Southern Power Company and Ohio Power Company in Ohio, and Wheeling Power Company in the northern panhandle of West Virginia. AEP Ohio is based in Gahanna, Ohio, and is a unit of American Electric Power. News and information about AEP Ohio can be found at aepohio.com.

          American Electric Power is 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 38,000 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 transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. 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). AEP’s headquarters are in Columbus, Ohio.

                                                                                                                                                       #    #    #