AEP sells coal operations in Ohio and Kentucky

COLUMBUS, Ohio, April 16, 2004 - American Electric Power (NYSE: AEP) has completed the sale of its AEP Coal mining operations in Ohio and Kentucky to various affiliates of Wexford Capital LLC.

According to the terms of the transaction, which closed today, AEP will receive $8.8 million cash and Wexford will assume an additional $10.8 million in future reclamation liability. Proceeds from the transaction will be used to reduce debt.

Wexford is a Securities and Exchange Commission-registered investment advisor with assets in several industry sectors, including energy and natural resources. Wexford’s coal industry assets are largely held by CAM Holdings LLC.

Wexford purchased all of AEP’s mining operations in Ohio, including one active mine portal, a coal preparation plant and a rail loading facility. Also part of the transaction are mining assets in southeastern Kentucky, including two surface mines and six underground mine locations, two permitted reserves, a coal preparation plant and rail loadout facilities. AEP will retain responsibility for completing approximately $35 million in reclamation work at sites in Kentucky. The liabilities for this reclamation work have been fully reserved.

“Completing the sale of AEP Coal is another key step in the execution of our plan to exit businesses that no longer fit with our strategic focus on our core utility operations,” said Mike Morris, AEP chairman, president and CEO. “With the sale of these assets, we’ve exited the business of mining coal to sell into the marketplace. We will continue to operate our Dolet Hills lignite mines in Louisiana, but the output from these reserves is fully dedicated to fuel the Dolet Hills Power Station.”

In addition to its Dolet Hills operations, AEP maintains ownership interests in coal reserves in Pennsylvania, West Virginia, Ohio, Indiana, Illinois, Utah and Colorado as well as royalty interests in West Virginia reserves. The company has no current plans to mine those reserves.

AEP acquired the AEP Coal assets when the company purchased the assets of Quaker Coal on Oct. 31, 2001, as part of Quaker’s bankruptcy proceedings. AEP purchased the assets for approximately $85.5 million plus approximately $82.5 million in assumed liabilities. The company has recorded impairments to the AEP Coal assets, which reduced the value of the assets being sold to Wexford to $18.8 million as of Dec. 31, 2003. The sales price for these assets approximates the current book value and is not expected to have a material impact on 2004 GAAP earnings.

American Electric Power owns and operates more than 42,000 megawatts of generating capacity in the United States and select international markets and is the largest electricity generator in the U.S. 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.

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.

Melissa McHenry
Manager, Corporate Media Relations

Julie Sloat
Managing Director, Investor Relations