COLUMBUS, Ohio, Oct. 4, 2007 – American Electric Power (NYSE: AEP) will recommend its board of directors increase the annual dividend, the company said this morning during presentations to investors and analysts in New York. AEP also increased its long-range forecast for ongoing earnings growth.

“Our operations continue to deliver excellent results and our strategic direction is sound,” said Michael G. Morris, AEP’s chairman, president and chief executive officer. “An increase in the dividend rewards our shareholders for their continued faith in the company.”

Morris said AEP management would recommend this month that the board of directors increase the annual dividend by $0.08 per share, approximately 5 percent, to $1.64 per share, or $0.41 per share each quarter beginning in December.

Morris also said the company’s long-term growth forecast has been revised to between 5 percent and 9 percent from the previous 5 percent to 7 percent range.

“Our earnings growth beyond the traditional native load growth will largely come from the return on new capital invested in our existing utility businesses,” Morris said. “As we enhance our utility infrastructure to better meet our customers’ future needs, we will be working closely with regulators to ensure we get a fair return on these investments for our shareholders.

“But customers and shareholders are not the only beneficiaries of these infrastructure investments,” Morris said. “There’s also an environmental benefit. Integrating increasingly more-efficient new technologies into our system reduces the amount of fuel we consume to supply electricity, which in turn reduces emissions. It’s a more sustainable approach to serving our customers.”

AEP refined its ongoing earnings guidance range for the current year and for 2008 and 2009. It also established ongoing earnings guidance for 2010.

Guidance for 2007 was refined to between $2.90 and $3.00 a share as the company approaches the expected Oct. 24 announcement of third-quarter 2007 earnings. Previous guidance was between $2.85 and $3.05 a share.

Ongoing earnings guidance for 2008 is between $3.05 and $3.25 per share, adjusted from the previous range of between $3.00 and $3.30 per share. Ongoing earnings guidance for 2009 is between $3.20 and $3.50 per share, adjusted from the previous range of between $3.15 and $3.45 per share. Ongoing earnings guidance for 2010 was established as between $3.45 and $3.80 per share.

In providing ongoing earnings guidance, there could be differences between ongoing earnings and earnings prepared in accordance with Generally Accepted Accounting Principles (GAAP) for matters such as, but not limited to, divestitures or changes in accounting principles. AEP management is not able to estimate the impact, if any, on GAAP earnings of these items. Therefore, AEP is not able to provide a corresponding GAAP equivalent for earnings guidance.

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A live webcast of today’s 8:30 a.m. EDT presentation to analysts is available at http://www.aep.com/go/webcast. The webcast will also be available for replay after the live event.
Minimum requirements to access the webcast: Windows Media Player, free from http://windowsmedia.com/download, and a 56Kbps or faster Internet connection.
The webcast can be accessed through the Internet at http://www.aep.com/go/webcast and also will be available after the live event.

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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 more than 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.

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This report made by AEP and its Registrant 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; AEP’s ability to recover regulatory assets and stranded costs in connection with deregulation; AEP’s ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; AEP’s ability to build or acquire generating capacity when needed at acceptable prices and terms and to recover those costs through applicable rate cases or competitive rates; new legislation, litigation and government regulation including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter 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. and related matters); AEP’s ability to constrain operation and maintenance costs; the economic climate and growth in AEP’s service territory and changes in market demand and demographic patterns; inflationary and interest rate 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; 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 the potential for new legislation in Ohio and membership in and integration into regional transmission organizations; 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 sell at wholesale; changes in technology, particularly with respect to new, developing or alternative sources of generation; other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.