COLUMBUS, Ohio, Nov. 9, 2005 -- American Electric Power (NYSE: AEP), through its Columbus Southern Power (CSP) utility subsidiary, announced today that the Public Utilities Commission of Ohio (PUCO) ruled that CSP can move forward with its purchase of Allegheny Energy’s Ohio service territory for approximately $45 million. In addition, CSP will pay Allegheny $10 million associated with the termination of certain litigation.
 
CSP will acquire the Allegheny Energy (NYSE: AYE) subsidiary Monongahela Power’s (Mon Power) transmission and distribution system and the company’s 29,000 customers in six southeastern Ohio counties. AEP will also hire approximately 24 current Mon Power employees located in Marietta in addition to filling several new positions.
 
The companies expect the sale to close by the end of this year pending approval from the U.S. Securities and Exchange Commission (SEC). The Federal Energy Regulatory Commission recently approved the acquisition.
 
“The Commission’s order will provide rate stability for the customers in the Mon Power service territory and we will continue working with Allegheny, its customers, local community leaders and the employees to ensure a smooth transition,” said Kevin E. Walker, president and chief operating officer of AEP Ohio.
 
The PUCO issued an order on June 14, 2005, that required CSP and Mon Power to discuss potential terms and conditions of a transaction through which Mon Power would transfer its Ohio service territory to CSP. The order was issued in an effort to resolve issues related to Mon Power’s planned transition to market-based rates in Ohio.
 
In today’s ruling, the PUCO also affirmed CSP’s power purchase agreement under which Allegheny will provide CSP 100 percent of its power requirements to serve the retail load in the current Mon Power service territory through May 31, 2007. CSP will recover the difference between its power acquisition costs and the revenues produced under its generation rates under a Power Acquisition Rider.
 
In addition, the Commission order confirmed the recovery of $10 million that CSP will pay to Allegheny as part of the transaction. The Commission ordered the cost to be shared among all CSP and Mon Power customers as a surcharge for approximately five years.
 
AEP Ohio provides electricity to 1.4 million customers of major AEP subsidiaries Columbus Southern Power Company and Ohio Power Company in Ohio, and Wheeling Power Company in the northern panhandle of West Virginia. AEP Ohio is based in Gahanna, Ohio, and is a unit of American Electric Power.
 
American Electric Power owns more than 36,000 megawatts of generating capacity in the United States and is the nation’s largest electricity generator. AEP is also one of the largest electric utilities in the United States, with more than 5 million customers linked to AEP’s 11-state electricity transmission and distribution grid. The company is based in Columbus, Ohio.