RWE to Join AEP in Validation of Carbon Capture Technology

American Electric Power (NYSE: AEP) announced today that RWE AG, one of the world's leading power producers and the largest electricity producer in Germany, will collaborate with AEP and Alstom during a planned validation of commercial-scale application of carbon capture and storage technology on an existing AEP coal-fired power plant.

AEP and RWE, who have signed a memorandum of understanding (MOU) on the collaboration, are leaders in clean-coal technology and efforts to address greenhouse gas emissions from coal-fired generation. Greenhouse gases like carbon dioxide (CO2) are believed to contribute to global climate change.

AEP has more than 38,000 megawatts of generating capacity in the U.S., with 67 percent fueled by coal or lignite. RWE has more than 43,000 megawatts of generating capacity in Germany, Great Britain and other countries, with 60 percent fueled by coal or lignite.

"We're extremely pleased that RWE will join us in this important step toward commercialization of carbon capture technology," said Michael G. Morris, AEP's chairman, president and chief executive officer. "Both AEP and RWE have long histories of innovation and engineering excellence for coal-fired generation and we have worked closely with RWE on other issues in the past. By combining our engineering and operational expertise, I'm confident we can address any technological challenges presented by this project."

RWE will join a project AEP announced in March when it signed an MOU with Alstom, a worldwide leader in equipment and services for power generation and clean coal, for post-combustion carbon capture technology using Alstom's Chilled Ammonia Process. RWE will also participate in an associated project for deep geological storage of captured CO2.

"Climate protection is a global challenge that requires global solutions. Therefore, we seek to expand our technological leadership in the field of CO2 avoidance techniques in collaboration with our American partners," said Dr. Johannes Lambertz, Member of the Executive Board of RWE Power in charge of fossil-fuelled power plants.

The Alstom technology will be installed on AEP's 1300-megawatt Mountaineer Plant in New Haven, W.Va., where it will capture CO2 from a slipstream - or portion - of flue gas from the plant. The slipstream will be equivalent to 20 megawatts of generation, an increase from the 10 megawatts included in the March announcement. The Alstom chilled ammonia system is expected to capture up to 200,000 metric tons of CO2 per year, which will be injected for geological storage in deep saline aquifers at the site.

Battelle Memorial Institute, a global science and technology enterprise and a leader in carbon storage research, is serving as the consultant for AEP on geological storage. In 2002, Battelle, AEP, the U.S. Department of Energy and others sponsored the world's first site-specific investigation of carbon storage capabilities at the Mountaineer plant. During the investigation, an approximately 9,000-foot exploratory well and seismic studies determined that the site was suitable for deep geological storage of CO2.

The validation project at Mountaineer will begin in 2009, or after successful completion of a small-scale pilot demonstration of the technology by Alstom and the Electric Power Research Institute on a Wisconsin plant.

Once commercial viability of the technology is validated at Mountaineer, AEP plans to install Alstom's chilled ammonia technology on one of the 450-megawatt coal-fired units at its Northeastern Station in Oologah, Okla. Plans are for this commercial-scale system to be operational at Northeastern early next decade. It is expected to capture about 1.5 million metric tons of CO2 a year. The CO2 captured at Northeastern Station will be used for enhanced oil recovery.

In addition to this carbon capture and storage collaboration agreement, AEP and RWE are members of the e8, a non-profit international organization composed of the nine leading electricity companies from the G8 countries. The e8 promotes sustainable energy development through electricity sector projects in developing nations worldwide.

RWE AG is one of Europe's leading electricity and gas companies. RWE's major power generation, sales and trading markets are in Germany, the UK and Central Eastern Europe. This is where 20 million electricity customers and 10 million gas customers rely on RWE's products - and a high degree of supply security. RWE has more than 43,000 megawatts of generating capacity in Germany, Great Britain and other countries. The Group's proprietary gas and oil production operations in Europe and North Africa are making an increasingly important contribution to securing future energy supplies.

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.

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.