COLUMBUS, Ohio, Nov. 6, 1998 – American Electric Power (NYSE: AEP) has agreed to proceed with the Alliance discussions concerning the creation of a regional transmission organization, which will generate a Federal Energy Regulatory Commission (FERC) filing document during the first half of 1999. AEP, FirstEnergy Corp. (NYSE: FE) and Virginia Power (NYSE: D) announced today that they would move forward with a proposal to create a regional transmission organization. The companies own 34,500 miles of transmission lines and serve 17 million people in 88,500 square miles in nine states -- Indiana, Kentucky, Michigan, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia. "This is a positive step for the companies involved," said J. Craig Baker, AEP vice president, transmission policy. "This decision also demonstrates AEP's commitment to the formation and operation of an independent transmission organization, a vital element in the continued development of the competitive electricity marketplace." The proposed FERC filing document would include both an Independent System Operator (ISO) option and a transmission company (transco) option, and mechanisms for creating the transco. Under the transco option, companies can elect to sell the transmission assets to the transmission organization, while companies who choose to participate under the ISO option can retain their transmission assets but place the assets under the control of the transmission organization. "AEP's commitment to the Alliance process furthers our goal of fostering discussions between the Alliance and the Midwest Independent System Operator (another transmission organization in the Midwest)," Baker said. "AEP advocates the formation of a large, regional transmission organization -- the bigger the better. A large, regional ISO provides access to a greater number of electricity generators and creates a more competitive marketplace." AEP is seeking regulatory approval to complete its proposed merger with Central and South West Corp. (NYSE: CSR), a Dallas-based public utility holding company. While AEP and other continuing participants in the Alliance work to create a FERC filing, Central and South West will continue working with members of the Southwest Power Pool on the creation of an ISO for SPP members. AEP, a global energy company, is one of the United States' largest investor-owned utilities, providing energy to 3 million customers in Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West Virginia. AEP has holdings in the United States, the United Kingdom, China and Australia. Wholly owned subsidiaries provide power engineering, energy consulting and energy management services around the world. The company is based in Columbus, Ohio. On Dec. 22, 1997, AEP announced a definitive merger agreement for a tax-free, stock-for-stock transaction with Central and South West Corp., a public utility holding company based in Dallas.