AEP, ITC Transmission to perform technical study on expanding 765-kV transmission into Michigan

Nov 6, 2006 PRNewswire-FirstCall

American Electric Power (NYSE: AEP) has signed a memorandum of understanding (MOU) with ITC Transmission, a subsidiary of ITC Holdings Corp. (ITC), to perform a technical study to evaluate the feasibility of extending AEP's 765-kilovolt (kV) transmission infrastructure through Michigan to enhance reliability and support a competitive market of generation supply.

The study will explore the merit and benefits of building a 765-kV transmission network in Michigan's Lower Peninsula that would link to AEP's 765-kV transmission system in the Midwest. The study will be shared with the Midwest ISO (MISO) and the Michigan Public Service Commission's (MPSC) 21st Century Energy Planning team.

The study is projected to be complete in late 2006, in time for it to be shared with the MPSC 21st Century Planning team before they complete their deliberations. The MOU signed with ITC Transmission does not include provisions to build or operate transmission. Any future activities regarding Michigan transmission will be determined after the completion of the study. "Through this agreement, we will work with ITC Transmission to determine the benefits of enhancing the Michigan transmission grid by introducing 765-kV lines, the most robust transmission in the U.S., and linking it to AEP's 2,100-mile 765-kV transmission network in the Midwest. After the completion of the study, we will provide our analysis to the Michigan Public Service Commission, Midwest ISO and other parties to help them determine the best way to serve Michigan’s future electric reliability needs and support a successful competitive marketplace," said Michael G. Morris, AEP's chairman, president and chief executive officer.

"ITC Transmission continues in its mission to invest in the transmission infrastructure as a means to improve electric reliability for its customers and lower the overall cost of delivered energy," said Joseph L. Welch, president and chief executive officer of ITC Transmission. "The transmission grid in Michigan has suffered after a 30-year trend of underinvestment, and we must begin actively looking to implement a long-term solution that will address Michigan's current electric reliability needs now and for years to come."

ITC Transmission, a subsidiary of ITC Holdings Corp. (NYSE: ITC), is the first independently-owned and operated electricity transmission company in the United States. ITC Holdings Corp. is in the business of investing in electricity transmission infrastructure improvements as a means to improve electric reliability, reduce congestion and lower the overall cost of delivered energy. Through its operating subsidiaries, ITC Transmission and METC, it is the only publicly traded company engaged exclusively in the transmission of electricity in the United States. ITC is also the largest independent electric transmission company and the tenth largest electric transmission company in the country based on transmission load served. ITC Transmission and METC operate contiguous, fully regulated, high-voltage systems in Michigan´s Lower Peninsula, an area with a population of approximately 9.8 million people, that transmit electricity to local electricity distribution facilities from generating stations throughout Michigan and surrounding areas. For more information on ITC Holdings Corp., please visit http://www.itc-holdings.com. For more information on ITC Transmission or METC, please visit http://www.itctransco.com or http://www.metcllc.com, respectively.

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 nearly 36,000 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 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). American Electric Power, based in Columbus, Ohio, is celebrating its 100th anniversary in 2006.

This report made by AEP and certain of its 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 of fuel suppliers and transporters; 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; the ability to build or require generating capacity when needed at acceptable prices and terms and to recover those costs through applicable rate cases or competitive rates; the ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; new legislation, litigation and government regulation including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon 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 its operation and maintenance costs; AEP´s ability to sell assets at acceptable prices and on other acceptable terms; 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; 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; volatility and changes in markets for electricity, natural gas, and other energy-related commodities; changes in utility regulation, including implementation of EPACT and membership in and integration into regional transmission structures; 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, and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.