COLUMBUS, Ohio, Aug. 11 /EMWNews/ -- American Electric Power (NYSE:

AEP) has formed a joint venture company with Duke Energy (NYSE: DUK) to

build and own new electric transmission assets.



    Through the 50-50 partnership, AEP and Duke are proposing to build 240

miles of extra-high voltage 765-kilovolt (kV) transmission lines and

related facilities in Indiana. The project would link Greentown Station

(near Kokomo, Ind.) with Rockport Station (east of Evansville, Ind.).



    Estimated costs for the project are approximately $1 billion, but final

costs will depend on the routing of the line, equipment and commodity

costs. AEP and Duke will be working with the PJM Interconnection (PJM) and

Midwest ISO (MISO) to determine the optimal configuration for the final

project. The project will be wholly owned by the joint venture. AEP's share

of the costs will be 50 percent of the total.



    The project is part of AEP's vision of expanded extra-high voltage

transmission to improve the reliability of the nation's transmission grid,

allow more efficient use of existing electricity production and delivery

infrastructure, protect national security and expand opportunities for new

generation, including renewables.



    "The ability of electric utilities to continue providing reliable,

reasonably priced electricity to fuel our nation's economic growth is

increasingly challenged by aging, insufficient infrastructure; continued

growth in electrical load; rising construction costs and a desire to reduce

greenhouse gas emissions. These issues can be managed more successfully

through strategic expansion of our nation's transmission grid, including

significant investment in extra-high voltage transmission," said Michael G.

Morris, AEP chairman, president and chief executive officer.



    "Indiana is home to nearly 27,000 megawatts of generation, and the

state's transmission system delivers electricity across the Midwest and

beyond. To continue reliable delivery of this energy and add the output of

new generation that has been proposed in the state, Indiana needs

additional extra-high voltage transmission capacity. A reliable supply of

electricity is fundamental to our quality of life and economic growth, and

Indiana's transmission system, which was largely completed more than 25

years ago, needs to grow as well to continue to meet the needs we have

today and in the future," Morris said.



    AEP and Duke will submit the Greentown-Rockport proposal to PJM and

MISO for consideration in their transmission expansion plans. The joint

venture will file in Indiana to operate as a transmission utility and will

file seeking rate approval for the project from the Federal Energy

Regulatory Commission (FERC) in third-quarter 2008. The in-service date for

Greentown- Rockport will be determined by the MISO and PJM planning

processes, with the earliest possible completion in 2014 or 2015.



    "Like most parts of the country, Indiana will see significant benefits

from extra-high voltage transmission expansion. The need to build

additional transmission provides the opportunity to invest in a long-term

transmission solution that will facilitate development of additional

generation, including renewables, and support the reliable transport of

electricity to fuel future economic growth. For example, more than 3,000

megawatts of wind power has been proposed in central Indiana, but

additional transmission is necessary to bring it online," said Susan

Tomasky, president, AEP Transmission.



    "Building more extra-high voltage 765-kV transmission lines in Indiana

can provide significant economic and environmental benefits. A 765-kV

transmission line requires less land to carry more power than lower voltage

lines, and the 765-kV line would cost less than half as much to build. A

765-kV transmission line also operates more efficiently than lower-voltage

lines, reducing the amount of electricity that needs to be generated by

reducing line loss - electricity lost during transport. The new 765-kV

designs that would be used for this project have line losses of less than

one percent, compared with losses as high as 10 percent for a lower-voltage

alternative," Tomasky said.



    The joint venture will operate as a transmission utility and be subject

to the rules and regulations of FERC, the State of Indiana, PJM and MISO.

Equity ownership of the new company will be equally split between AEP and

Duke.



    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 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 American Electric Power and its Registrant

Subsidiaries contains forward-looking statements within the meaning of

Section 21E of the Securities Exchange Act of 1934. Although the

registrants 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 the

company's ability to obtain any necessary regulatory approvals and permits)

when needed at acceptable prices and terms and to recover those costs

(including the costs of projects that are canceled) 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;

timing and resolution of pending and future rate cases, negotiations and

other regulatory decisions (including rate or other recovery of new

investments in generation, distribution and transmission service and

environmental compliance); resolution of litigation (including 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; volatility in

the financial markets, particularly developments affecting the availability

of capital on reasonable terms and developments impairing AEP's ability to

refinance existing debt at attractive rates; 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, coal, nuclear fuel and other energy-related

commodities; changes in utility regulation, including the implementation of

the recently passed utility law in Ohio and the allocation of costs within

regional transmission organizations; accounting pronouncements periodically

issued by accounting standard-setting bodies; the impact of volatility in

the capital markets on the value of the investments held by AEP's pension,

other postretirement benefit plans and nuclear decommissioning trust;

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.