RICHMOND, Va., July 16, 2007 – Today Appalachian Power, an operating subsidiary of American Electric Power (NYSE: AEP), filed three separate applications for consideration by the Virginia State Corporation Commission.

One application seeks an adjustment of the company’s current fuel factor to recover fuel costs and incorporate a sharing of the benefits of Appalachian’s off-system sales between customers and the company. Appalachian is seeking to implement the proposed fuel factor in September. If approved, the fuel factor would increase then-current total customer bills by about 4.7 percent.

Another application seeks the recovery of an additional $40 million in environmental and reliability (E&R) costs incurred between October 2005 and September 2006. A previously approved E&R surcharge involves costs incurred between July 2004 and September 2005. The company asks to implement the revised surcharge Dec. 1, 2007. If approved, it would increase then-current total customer bills by about 3.5 percent.

The third application seeks a prudency determination and approval to recover, beginning in 2009, Virginia’s share of the carrying costs associated with construction of a proposed 629-megawatt Integrated Gasification Combined Cycle (IGCC) clean-coal power plant in West Virginia. The plant could be completed in mid-2012 at a total cost of approximately $2.23 billion if regulatory approvals are obtained in Virginia and West Virginia without delays. A related filing is already being considered by the Public Service Commission of West Virginia.

“With restrictions on carbon dioxide emissions expected in the future, IGCC technology represents an important advancement for power generation and continued use of coal,” said Michael G. Morris, AEP’s chairman, president and chief executive officer. “It’s less expensive to capture carbon dioxide in the pre-combustion gasification process than it is to capture it post-combustion from a pulverized coal plant.”

“Appalachian Power has a clear need for additional generating capacity,” said Dana Waldo, Appalachian Power president and chief operating officer. “We have not added baseload generating capacity since the Mountaineer Plant was completed in 1980. We also recognize the importance our customers place on using our abundant supply of coal with the least possible impact on the environment.”

The three applications will be assigned procedural schedules by the SCC. Public notices including hearing dates and public comment periods will be published by the company.

“While the filing of multiple applications on one day is complex, it ultimately provides Virginia customers a more gradual transition to new rates and helps avoid rate spikes,” Waldo said.
 
Below are estimates of projected residential bill increases: 
 


 
    Use/Mo.           Current               9/01/07                   12/01/07
 
   500 KWH            37.59                    39.35                        40.81
1,000 KWH            66.72                    70.23                        72.68
2,000 KWH          124.98                  132.01                      136.42
3,000 KWH          183.25                  193.79                      200.16