COLUMBUS, Ohio, Dec. 15, 2005 – American Electric Power (NYSE: AEP), through its Appalachian Power utility subsidiary, today completed its purchase of the 505-megawatt Ceredo Generating Station in West Virginia from a subsidiary of Reliant Energy for approximately $100 million.

AEP announced its intent to purchase the natural-gas, simple-cycle power plant Aug. 11. The transaction received necessary regulatory approvals from the Federal Energy Regulatory Commission (FERC), West Virginia Public Service Commission, and federal clearance pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

The plant, located near Ceredo, W.Va., was designed and built for Columbia Energy by AEP’s Pro Serv subsidiary. It was completed and began commercial operation in 2001.

“Our forecasts indicate that the growing electricity needs of customers in our eastern seven states will soon be beyond the capabilities of our existing fleet of power plants,” said Michael G. Morris, AEP’s chairman, president and chief executive officer. “Our strategy for meeting the growth in demand includes two equally important facets: the construction of new plants, like the clean-coal Integrated Gasification Combined Cycle, or IGCC, generation projects we are pursuing, and the acquisition of recently completed gas-fired merchant plants when the price is right.

“The IGCC plants and our existing fleet of coal-fired plants in our eastern seven states will supply the bulk of the power used by our customers on a daily basis,” Morris said. “Natural gas-fired merchant plants, like Ceredo and the 821-megawatt Waterford plant in Ohio that we acquired earlier this year, often have a purchase price well below the cost to build a comparable plant. Even with the forecast that natural gas prices will remain higher than in past years, these plants can provide an economical way to meet customers’ needs on days of high electricity demand.”

AEP plans to operate the Ceredo plant as peaking generation for use only when electricity demand is high. The plant also helps AEP maintain the 15 percent reserve margin required by the PJM Interconnection to ensure reliability. The Ceredo Generating Station is part of the company’s generation pool that provides power to AEP’s utility units serving customers in Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West Virginia.

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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This report made by AEP and certain of its 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; the ability to recover regulatory assets and stranded costs in connection with deregulation; the ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; new legislation, litigation and government regulation including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon 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.); AEP´s ability to constrain its operation and maintenance costs; AEP´s ability to sell assets at acceptable prices and on other acceptable terms, including rights to share in earnings derived from the assets subsequent to their sale; 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 a strategy based on a 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; volatility and changes in markets for electricity, natural gas, and other energy-related commodities; changes in utility regulation, including membership and integration into regional transmission structures; 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 sells at wholesale; changes in technology and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.