Cleveland PR Newswire

Press releases from Ohio companies

AEP Sets 2010 Ongoing Earnings Guidance, Capital Expenditures Budget

    Formation of a transmission company planned as part of grid strategy

    COLUMBUS, Ohio, Nov. 1 /PRNewswire-FirstCall/ -- American Electric
Power (NYSE: AEP) has set its ongoing earnings guidance range and capital
expenditures budget for 2010. AEP will also form a transmission company as
part of its strategy to pursue transmission investment opportunities in
AEP's traditional footprint.

    AEP management will be discussing the company's financial outlook and
strategic direction during meetings with investors at the annual Edison
Electric Institute Financial Conference that begins today in Hollywood,
Fla.

    AEP anticipates that 2010 ongoing earnings will be between $2.80 and
$3.20 per share. Ongoing earnings guidance for 2009, which reflects last
week's upside adjustment, remains at $2.90 to $3.05 per share. Ongoing
earnings represent earnings from continuing operations, which exclude
special or one-time items included in the earnings prepared in accordance
with generally accepted accounting principles.

    "Our earnings projections for 2010 are driven by new rate recovery
activity underway in several jurisdictions across our service territories,
an expected increase in off-system sales of electricity as that market
improves after a weak year in 2009, and a general increase in retail load,"
said Michael G. Morris, AEP's chairman, president and chief executive
officer.

    AEP projects that capital expenditures for utility operations will
decrease to $1.993 billion in 2010 from the estimated $2.466 billion in
2009, reflecting AEP's conservative approach for near-term capital
expenditures.

    AEP will form a transmission company, or Transco, to pursue new
transmission opportunities within the company's existing 11-state
footprint, a key component in a three-part national transmission strategy.
AEP has existing and planned transmission projects in the Electric
Reliability Council of Texas (ERCOT) through its Electric Transmission
Texas joint venture with MidAmerican Energy Holdings Company. AEP is also
pursuing transmission projects outside its footprint and outside ERCOT
through joint ventures with numerous other companies, including Electric
Transmission America, AEP's broader partnership with MidAmerican.

    "The Transco will be our vehicle for much of AEP's future on-system,
wholly-owned transmission investment," Morris said. "These investments will
include a wide range of on-system transmission improvements, things like
greenfield projects, station additions and system upgrades. Pursuing these
activities in a Transco, with formula rates adjusted annually by the
Federal Energy Regulatory Commission (FERC), benefits customers by
enhancing AEP's access to capital. This enables the company to undertake
substantial new investment while relieving our operating company balance
sheets of the burden of meeting those capital demands, thereby allowing
them to put capital to work on distribution and generation needs."

    AEP expects to invest $118 million in Transco activities in 2010.

    "We are seeking state utility status for the Transco in states where
that designation is required, and we will join both PJM and Southwest Power
Pool as a transmission owner," Morris said. "We plan to file a FERC tariff
for the Transco later this year, with rates effective in mid-2010."

    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 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 necessary generating capacity and the performance of AEP's
generating plants, including AEP's ability to restore Indiana Michigan
Power's Donald C. Cook Nuclear Plant Unit 1 in a timely manner; 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 John W. Turk Jr. Plant,
and transmission line facilities (including the 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 that could impact the
continued operations of AEP's plants; 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 the dispute with Bank of America); AEP's ability to
constrain operation and maintenance costs; the economic climate and growth
or contraction in AEP's service territory and changes in market demand and
demographic patterns; inflationary or deflationary 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 finance new capital projects and refinance existing debt
at attractive rates; the availability and cost of funds to finance working
capital and capital needs, particularly during periods when the time lag
between incurring costs and recovery is long and the costs are material;
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, including PJM and SPP; 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 and the impact on future funding requirements; prices
and demand 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.