COLUMBUS, Ohio, Feb. 8, 2001 – American Electric Power (NYSE: AEP) has agreed to sell its 500-megawatt Frontera power plant to TECO Power Services, a subsidiary of TECO Energy Inc. (NYSE: TE). The sale is consistent with the Federal Energy Regulatory Commission (FERC) action last summer requiring divestiture of the plant to address market power issues in connection with AEP’s merger with Central and South West Corp. (CSW).

Under terms of the sale, AEP will receive $265 million in cash from TECO Power Services.

The sale, which is expected to close in March, is contingent upon completion of the Hart-Scott-Rodino antitrust review.

“This divestiture is important because it allows us to comply with the FERC’s order on the completion of our merger, but it also provides cash that we will use to pay down debt,” said Dwayne L. Hart, AEP’s vice president, business development and strategy.

The impact on AEP’s earnings will be positive.

Frontera is a 500-megawatt natural gas-fired combined-cycle plant located near the City of Mission in the Rio Grande Valley of Texas. The merchant plant, built by CSW subsidiary CSW Energy prior to the June 15, 2000, completion of the merger with AEP, began simple-cycle operation in July 1999 and combined-cycle operation in May 2000.

American Electric Power is a multinational energy company based in Columbus, Ohio. AEP owns and operates more than 38,000 megawatts of generating capacity, making it one of America’s largest generators of electricity. The company is also a leading wholesale energy marketer and trader, ranking second in the U.S. in electricity volume. AEP provides retail electricity to more than 9 million customers worldwide and has more than $55 billion in assets, primarily in the U.S. with holdings in select international markets. Wholly owned subsidiaries are involved in power engineering and construction services, energy management and telecommunications.

News releases and other information about AEP can be found on the World Wide Web at http://www.aep.com.

The comments set forth above include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, including (1) statements concerning the Company’s plans, objectives, expected performance and expenditures and (2) other statements that are other than statements of historical fact. These forward-looking statements reflect assumptions, and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially from forward-looking statements are electric load and customer growth, abnormal weather conditions, availability of generating capacity, the ability to recover net regulatory assets and other stranded costs in connection with deregulation of generation, the outcome of environmental regulation and litigation, the impact of fluctuation in commodity prices and interest rates, and other risks and unforeseen events over which the Company has no control. The reader is also directed to the Company’s periodic filings with the Securities and Exchange Commission for additional factors that may impact the Company’s results of operations and financial condition. Furthermore, historical results may not be indicative of the Company’s future performance.