COLUMBUS, Ohio, July 26, 2000 – American Electric Power Company (NYSE:AEP) today reported that higher energy trading volume contributed to earnings before special items of $164 million, or 51 cents per share, in second quarter 2000, which ended June 30. After special items, the company recorded a loss for the quarter of $9 million, or 3 cents per share, compared with net income of $190 million, or 59 cents per share for second quarter 1999.

AEP also announced that it has revised the estimated restart date for its Cook Unit 1 nuclear plant to first quarter 2001. The company said it currently expects additional expenditures associated with the restart of approximately $145 million.

In the second quarter, AEP continued to experience solid growth in its energy trading operations. Net revenue from energy trading was $83 million, up 242 percent from $24 million recorded in the same period a year ago. AEP was the nation’s second-largest electricity trader in 1999 and is expanding its trading operations outside the U.S.

Several items resulted in AEP recording a loss for the quarter.

“Second quarter results included a write off of deferred costs related to our recently completed merger with Central and South West Corporation, a write down to market of a Central and South West investment in a company based in Chile and expenses to prepare the Cook Nuclear Plant units for restart,” said E. Linn Draper Jr., AEP chairman, president and chief executive officer.

The cost to prepare the Cook Nuclear units for restart was expensed as incurred in 2000. A portion of the costs in 1999 were deferred under agreements with the Indiana and Michigan regulatory commissions.

For the year-to-date period, AEP’s earnings were $131 million, or 41 cents per share, compared with $384 million, or $1.20 per share, for the comparable prior year period.

Net income for the 12 months ended June 30 was $718 million, or $2.23 per share, compared with $925 million, or $2.90 per share, for the same period a year ago.

On-going operations continue to be strong, with higher retail net revenue and lower operations and maintenance costs -- excluding Cook costs -- than in the same period a year ago.

Amounts for all prior periods have been restated on a pooling-of-interest basis to reflect the merger with Central and South West that was consummated on June 15, 2000.

COOK UNIT 1 RESTART

The revised restart schedule for Cook Unit 1 is based on the experience gained from the successful restart of Unit 2 and further review of the remaining work, according to Bob Powers, senior vice president – nuclear generation.

“Although restarting a nuclear plant does not lend itself to precise predictions, we will make every effort to restart Unit 1 as early in the first quarter as possible,” Powers said. “However, our highest priorities will continue to be safety and quality.”

Primary activities for restart include restoration of the ice condenser system, structural modifications in the containment building, refurbishment of motor operated valves, and system return-to-service functional testing.

“We already have technical solutions for most of the remaining Unit 1 work, but the plant modifications are very labor intensive,” Powers said.

Of the estimated $145 million in additional expenditures to restart Cook Unit 1, $115 million will be spent in 2000.

Replacement of the Unit 1 steam generators is scheduled to conclude in early August. The majority of that $165 million capital improvement project was completed during work to restart Unit 2.

AEP shut down both units in September 1997 because of questions raised about operability of safety systems. On June 13, the Nuclear Regulatory Commission concurred that Unit 2 plant was safe and ready for restart. Unit 2 reached full power operation on July 5.

Generating capacity for the two units are 1,020 megawatts for Unit 1 and 1,090 megawatts for Unit 2, enough power to serve the needs of a city of about 1.2 million people. The plant is in Bridgman, Mich.

American Electric Power is a multinational energy company based in Columbus, Ohio. AEP is one of the United States´ largest generators of electricity with more than 38,000 megawatts of generating capacity. AEP is also one of the nation´s leading wholesale energy marketers and traders. AEP delivers electricity to more than 4.8 million customers in 11 states -- Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia. The company serves more than 4 million customers outside the U.S. through holdings in Australia, Brazil, China, Mexico and the United Kingdom. Wholly owned subsidiaries are involved in power engineering and construction services, energy management and telecommunications.
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The comments set forth above include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, including (1) statements concerning the Company’s plans, objectives, expected performance and expenditures and (2) other statements that are other than statements of historical fact. These forward-looking statements reflect assumptions, and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially from forward-looking statements are electric load and customer growth, abnormal weather conditions, availability of generating capacity, unforeseen events affecting the restart of Cook Unit 1, the ability to recover net regulatory assets and other stranded costs in connection with deregulation of generation and coal mining operations, interest and foreign currency rates and other risks and unforeseen events over which the Company has no control. The reader is also directed to the Company’s periodic filings with the Securities and Exchange Commission for additional factors that may impact the Company’s results of operations and financial condition. Furthermore, historical results may not be indicative of the Company’s future performance.

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