COLUMBUS, Ohio, July 3, 2002 - West Texas Utilities Co., a wholly owned subsidiary of American Electric Power (NYSE: AEP), today announced it has extended the expiration date for its tender for certain series of its First Mortgage Bonds from 5 p.m. New York City time on July 2, 2002, to 5 p.m. New York City time on July 11, 2002. The tender offer is being made pursuant to an Offer to Purchase dated June 20, 2002. Other than the extension of the expiration date referred to above, all of the terms and conditions contained in the Offer to Purchase remain the same.

Under the terms of the offer, made upon the terms and subject to the conditions set forth in the Offer to Purchase, West Texas Utilities will purchase for cash any and all of the following bonds at a price determined by the yield to maturity, at the time of tender, of the Referenced U.S. Treasury Note plus a fixed spread, as follows:

  • $35,000,000 First Mortgage Bonds, 6.875% Series Q due 2002
    Referenced U.S. Treasury Note: 6.0% due 9/30/2002
    Fixed Spread: 30 basis points

  • $40,000,000 First Mortgage Bonds, 6.125% Series S due 2004
    Referenced U.S. Treasury Note: 3.0% due 1/31/2004
    Fixed Spread: 45 basis points

  • $40,000,000 First Mortgage Bonds, 7.0% Series R due 2004
    Referenced U.S. Treasury Note: 5.875% due 11/15/2004
    Fixed Spread: 45 basis points

  • $72,000,000 First Mortgage Bonds, 6.375% Series U due 2005
    Referenced U.S. Treasury Note: 5.75% due 11/15/2005
    Fixed Spread: 50 basis points

  • $25,000,000 First Mortgage Bonds, 7.75% Series P due 2007
    Referenced U.S. Treasury Note: 4.375% due 5/15/2007
    Fixed Spread: 55 basis points

All holders of bonds who tender will receive a price that is calculated using the yield of the Referenced U.S. Treasury Note specific to each series at the time of tender plus the fixed spread specific to each series, as outlined above. In addition to this price per bond, all accrued and unpaid interest up to (but excluding) the settlement date will be paid to the bondholder. The settlement will be three business days after the date of tender of the applicable bonds. To date, approximately $89 million of the bonds have been tendered.

As previously announced, this tender offer is being implemented in order to restructure West Texas Utilities in connection with the deregulation of the electric industry in the state of Texas. West Texas Utilities currently intends that all bonds that are not tendered or otherwise acquired by West Texas Utilities will be defeased by the end of 2002. Defeasance will result in the discharge of the lien of the Indenture and cause the bonds to be deemed paid within the meaning of the defeasance provisions of the Indenture.

Salomon Smith Barney Inc. and Lehman Brothers Inc. are the Dealer Managers for the tender offer. Holders of Series U Bonds and Series P Bonds should contact Salomon Smith Barney Inc. at (800) 558-3745 to execute tender of these series of bonds. Holders of Series Q Bonds, Series R Bonds and Series S Bonds should contact Lehman Brothers Inc., attention Emily Shanks, at (800) 438-3242 or collect at (212) 528-7581 to execute tender of these series of bonds. All tenders will be executed by the respective Dealer Managers in the customary manner of a corporate bond trade.

The Information Agent is Mellon Investor Services and may be contacted at (888) 232-7136 with any questions regarding the tender offer.

American Electric Power is a multinational energy company with a balanced portfolio of energy assets. AEP, the United States’ largest electricity generator, owns and operates more than 42,000 megawatts of generating capacity in the U.S. and select international markets. AEP is a leading wholesale energy marketer, ranking among North America’s top providers of wholesale power and natural gas with a growing wholesale presence in European markets. In addition to electricity generation, AEP owns and operates natural gas pipeline systems, natural gas storage, coal mines, and the fourth-largest inland barge company in the U.S. AEP is also one of the largest electric utilities in the United States, with almost 5 million customers linked to AEP’s wires. AEP is based in Columbus, Ohio.

This news release is not an offer to purchase or a solicitation of acceptance of the offer to purchase, which may be made only pursuant to the terms of the Offer to Purchase. This news release shall not constitute a notice of redemption of the bonds.

Media:David Hagelin
Corporate Media Relations

Analysts: Julie Sloat
Manager, Investor Relations