COLUMBUS, Ohio, Sept. 28, 2005 – American Electric Power (NYSE: AEP), through its Columbus Southern Power utility subsidiary, has completed the purchase of the Waterford Energy Center from an affiliate of Public Service Enterprise Group (NYSE: PEG) for approximately $220 million. The acquisition will have no material impact on AEP’s earnings.

The Waterford Energy Center is a natural gas-fired, combined-cycle power plant, located in southeastern Ohio, with nominal generating capacity of 821 megawatts. The plant began commercial operation in August 2003.

AEP announced the purchase of Waterford May 27 as part of the company’s broad strategy to meet the growing electricity needs of customers in its eastern service area. AEP will operate Waterford as part of the company’s generating pool that provides power to AEP’s utility units serving customers in Ohio, Indiana, Kentucky, Michigan, Tennessee, Virginia and West Virginia. The capacity of the Waterford Plant will help AEP meet annual demand growth of approximately 2 percent in these states and maintain the 15 percent reserve margin required by the PJM Interconnection to ensure reliability.

"Our overall capacity growth plan includes the construction of new plants, like the clean-coal Integrated Gasification Combined Cycle generation projects we are pursuing, and -- if the price is right -- the acquisition of recently completed gas-fired merchant plants in this region,” said Michael G. Morris, AEP´s chairman, president and chief executive officer. “These natural gas plants seldom operate for long periods of time because of significantly higher natural gas prices and more generation in the market than the owners had forecast, but with a purchase price well below the cost to build a comparable facility, they provide an economical way to ensure that we have the generation we need on days of high electricity demand."

American Electric Power owns more than 36,000 megawatts of generating capacity in the United States and is the nation´s largest electricity generator. AEP is also one of the largest electric utilities in the United States, with more than 5 million customers linked to AEP’s 11-state electricity transmission and distribution grid. The company is based in Columbus, Ohio.
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These reports made by AEP and its registrant subsidiaries contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and 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; available sources and costs of fuels; 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; new legislation and government regulation including requirements for reduced emissions of sulfur, nitrogen, carbon and other substances; resolution of pending and future rate cases, negotiations and other regulatory decisions (including rate or other recovery for environmental compliance); oversight and/or investigation of the energy sector or its participants; resolution of litigation (including pending Clean Air Act enforcement actions and disputes arising from the bankruptcy of Enron Corp.); AEP’s ability to reduce its operation and maintenance costs; the success of disposing of investments that no longer match AEP’s corporate profile; AEP’s ability to sell assets at attractive prices and on other attractive terms; international and country-specific developments affecting foreign investments including the disposition of any current foreign investments; 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 on a point of view regarding prices of electricity, natural gas, and other energy-related commodities; changes in the creditworthiness and number of 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 and preferred stock; volatility and changes in markets for electricity, natural gas, and other energy-related commodities; changes in utility regulation, including the establishment of a regional transmission structure; accounting pronouncements periodically issued by accounting standard-setting bodies; the performance of AEP’s pension plan; prices for power that AEP generates and sells at wholesale; and changes in technology and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.