SHREVEPORT, La., Nov. 27, 2007 – The Arkansas Public Service Commission (APSC) has granted American Electric Power’s (NYSE: AEP) Southwestern Electric Power Company (SWEPCO) a Certificate of Environmental Compatibility and Public Need (CECPN) to construct a 600-megawatt coal-fueled power plant in Hempstead County in southwest Arkansas.

In a decision issued the day before Thanksgiving, the commission placed 12 conditions on the certificate for the proposed John W. Turk, Jr. Power Plant. SWEPCO also needs final regulatory approvals from the Arkansas Department of Environmental Quality, the U.S. Army Corps of Engineers, and Louisiana and Texas regulators. In the 2-1 decision, APSC Chairman Paul Suskie and Commissioner Daryl Bassett voted for the order and Special Commissioner David Newbern dissented.

“This is a good decision for SWEPCO customers,” said Venita McCellon-Allen, SWEPCO president and chief operating officer. "In reading the order, it is obvious the great responsibility this commission felt in meeting the future energy needs of SWEPCO customers in a way that is also respectful of the environment. The commission worked hard. They made the right decision."

The John W. Turk, Jr. Power Plant will use "ultra-supercritical" advanced coal combustion technology and will be one of the first plants of its type to go into operation in the United States. The plant will use low-sulfur coal and will include state-of-the-art emission control technologies, including a design that allows for the retrofit of carbon dioxide controls.

“The commission’s decision recognizes the importance of coal to our nation’s future. This baseload plant will use low-sulfur coal from Wyoming, the same fuel which has helped meet SWEPCO’s power generation needs affordably and reliably at plants in Arkansas and Texas for more than 25 years. Coal is an abundant American fuel that must remain an integral part of this nation’s generation mix,” McCellon-Allen said. “The decision is about striking a balance – putting new technology to work to burn coal more cleanly and efficiently to meet the growing energy needs of our customers."

In its ruling, the APSC said: "The commission has a duty and responsibility to ensure that adequate and reliable electric energy at reasonable and affordable rates is available to SWEPCO´s Arkansas customers at the ´flick of a switch.´ Without an adequate supply of affordable energy, our culture and the economy of this state cannot be sustained."

The commission´s Nov. 21 decision followed 18 days of public hearings that ended with closing arguments on Oct. 22. Several landowners and hunting clubs intervened in the proceedings to oppose the plant. Support came from many local public officials, economic development leaders and area residents. “We are grateful to the many citizens, communities and groups in Southwest Arkansas and elsewhere who recognized the need for this project and strongly supported it,” McCellon-Allen said.

“The Turk plant will bring needed generation and transmission system improvements to southwest Arkansas. It also will boost regional economic development efforts in southwest Arkansas and northeast Texas through construction jobs, permanent jobs, indirect jobs, new taxes, improved electric infrastructure and continued affordable rates,” McCelllon-Allen said. Plant construction is expected to create approximately 1,400 temporary jobs, and the plant will bring an estimated 110 permanent jobs to the area.

Site preparation and equipment delivery is likely to begin soon. Construction of the power generation facilities will not begin until the company receives an air permit from the ADEQ. Completion date is projected to be 2011.
 
The estimated cost of the plant is approximately $1.34 billion. SWEPCO’s investment will be 73 percent (440 megawatts) or about $1 billion.
 
In a news release accompanying the ruling, the APSC said most of the 12 conditions are “designed to minimize environmental concerns raised by intervening parties and to protect SWEPCO´s Arkansas ratepayers from costs relating to imprudence and regulatory uncertainty associated with the Turk plant.”

“We believe this is a workable package of conditions, many of which we agreed to during the proceedings,” McCellon-Allen said. “We will work closely with the commission and other parties as we go through the process of siting the transmission lines, plan the rail access for coal delivery and build the plant. We intend to fulfill our economic and environmental responsibility as we bring this important project on line,” she said.

Additional approvals for the plant are currently pending before the Louisiana Public Service Commission and Public Utility Commission of Texas. The Arkansas Department of Environmental Quality is considering the air permit for the Turk Plant.  A draft air permit has been issued and made available for public comment.  The ADEQ is currently considering the comments.
 
“We continue to work with the commissions, ADEQ and other agencies to secure the necessary approvals for this important project,” McCellon-Allen said.

The baseload coal-fueled plant is part of SWEPCO’s previously announced plans to meet short-term and long-term energy needs of its customers. In addition, the company is nearing completion of a 340-megawatt peaking plant at Tontitown in Northwest Arkansas. Two of the plant’s four simple-cycle natural-gas combustion turbines were in operation for the summer of 2007. Also, the company plans to build a 480-megawatt, combined-cycle natural gas-fueled plant at its existing Arsenal Hill Power Plant in Shreveport, La.

“The combination of coal-fueled baseload generation and natural-gas fueled peaking and intermediate facilities will allow SWEPCO to continue the strategic fuel mix that has served our customers well for several decades. It has prevented over-reliance on natural gas and the price volatility that fuel has shown,” McCellon-Allen said.

SWEPCO serves more than 464,000 customers in three states, including 112,000 in western Arkansas, 176,000 in Northwest Louisiana, and 176,000 in East and North Texas. SWEPCO’s headquarters are in Shreveport, La. News releases and other information about SWEPCO can be found at www.swepco.com.

American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning more than 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP’s transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP’s headquarters are in Columbus, Ohio. News releases and other information about AEP can be found at www.aep.com.

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This report made by AEP and its Registrant 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 and performance of fuel suppliers and transporters; availability of generating capacity and the performance of AEP’s generating plants; AEP’s ability to recover regulatory assets and stranded costs in connection with deregulation; AEP’s ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; AEP’s ability to build or acquire generating capacity (including AEP’s ability to obtain any necessary regulatory approvals and permits) when needed at acceptable prices and terms and to recover those costs through applicable rate cases or competitive rates; new legislation, litigation and government regulation including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances; new legislation, litigation and government regulation including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter 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. and related matters); AEP’s ability to constrain operation and maintenance costs; the economic climate and growth in AEP’s service territory and changes in market demand and demographic patterns; inflationary and interest rate 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 of the counterparties with whom AEP has contractual arrangements, including participants in the energy trading market; 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 the potential for new legislation in Ohio and membership in and integration into regional transmission organizations; 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, particularly with respect to new, developing or alternative sources of generation; other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.