2010 Fact Book        45th EEI  Financial Conference    Palm Desert, CA
“Safe Harbor” Statement under the Private Securities                        Litigation Reform Act of 1995This presentation...
Coal   Generation &    Regulation   Operating Company   Company Overview       Environmental                    Overview
Company Overview3
 
Company Overview                                                OUR FOCUS IS OUR CORE                                  DOM...
Company Overview                         SIGNIFICANT PRESENCE THROUGHOUT                                THE DOMESTIC VALUE...
AEP Service Territory                           AEP EAST OPERATING COMPANIES    EAST REGULATED UTILITIES                  ...
AEP Service Territory                              AEP WEST OPERATING COMPANIES      WEST REGULATED UTILITIES             ...
Utility Operations - Load                 60,000                 55,000                            57,235 59,182 58,892 58...
2009 Retail Revenue                                                                         `                            ...
Domestic Generation Fleet                           Pumped                       Storage/Hydro/                           ...
Transmission Line Circuit Miles Detail                                            Operating Company Level (Circuit Miles)O...
Distribution Line Detail                                                              By                                  ...
 
Coal   Generation &    Regulation   Operating Company   Company Overview       Environmental                    Overview
Operating Company Overview     • AEP East Regional Utilities     • AEP West Regional Utilities13
 
AEP East Regional Utilities14
Appalachian Power     President and Chief Operating Officer:     Charles Patton     Appalachian Power Company (APCo)     (...
Appalachian Power     CAPITAL STRUCTURE (in thousands)                                                           2008     ...
Appalachian Power     APPALACHIAN AREA                                                             TYPICAL BILL COMPARISON...
AEP Ohio - Columbus Southern Power     President and Chief Operating     Officer: Joe Hamrock     AEP Ohio-Columbus Southe...
AEP Ohio - Columbus Southern PowerCAPITAL STRUCTURE (in thousands)                                                        ...
AEP Ohio - Columbus Southern Power        OHIO INVESTOR OWNED UTILITIES *                                                 ...
Indiana Michigan Power     President and Chief Operating     Officer: Paul Chodak     Indiana Michigan Power Company (I&M)...
Indiana Michigan PowerCAPITAL STRUCTURE (in thousands)                                                     2008           ...
Indiana Michigan Power     INDIANA & MICHIGAN INVESTOR OWNED UTILITIES * TYPICAL BILL COMPARISON **      Indiana          ...
Kentucky Power     President and Chief Operating     Officer: Greg Pauley Kentucky Power Company (KPCo) (organized in Kent...
Kentucky PowerCAPITAL STRUCTURE (in thousands)                                                      2008                  ...
Kentucky Power        KENTUCKY INVESTOR OWNED UTILITIES *                                            TYPICAL BILL COMPARIS...
AEP Ohio - Ohio Power     President and Chief Operating     Officer: Joe Hamrock     AEP Ohio- Ohio Power Company     (OPC...
AEP Ohio - Ohio PowerCAPITAL STRUCTURE (in thousands)                                                     2008            ...
AEP Ohio - Ohio Power      OHIO INVESTOR OWNED UTILITIES *                                                       TYPICAL B...
AEP West Regional Utilities30
Public Service Company of Oklahoma     President and Chief Operating     Officer: Stuart Solomon     Public Service Compan...
Public Service Company of OklahomaCAPITAL STRUCTURE (thousands)                                                        200...
Public Service Company of Oklahoma       OKLAHOMA INVESTOR OWNED UTILITIES *                          TYPICAL BILL COMPARI...
Southwestern Electric PowerPresident and Chief OperatingOfficer: Venita McCellon-AllenSouthwestern Electric Power Company ...
Southwestern Electric PowerCAPITAL STRUCTURE (in thousands)                                                           2008...
Southwestern Electric Power     SOUTHWESTERN INVESTOR     OWNED UTILITIES *                    TYPICAL BILL COMPARISON ** ...
AEP Texas Central Company       President and Chief Operating       Officer: Wade Smith       AEP Texas - Texas Central Co...
AEP Texas Central CompanyCAPITAL STRUCTURE (in thousands)                                                        2008     ...
AEP Texas North Company      President and Chief Operating      Officer: Wade Smith      AEP Texas - Texas North Company (...
AEP Texas North CompanyCAPITAL STRUCTURE (in thousands)                                                      2008         ...
 
Coal   Generation &    Regulation   Operating Company   Company Overview       Environmental                    Overview
Regulation     •   Regulatory Strategy     •   Rate Case Filing Requirements     •   Regulatory Activity Underway     •   ...
 
Regulatory Strategy: Reduce Lag        Maximize frequency of filings               Seek ability to pro-forma both capita...
Summary of Rate Case Filing Requirements                                          Arkansas      Indiana     Kentucky   Lou...
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2010 AEP Fact Book

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An overview of AEP and its regional operating companies presented at the EEI Financial Conference in Palm Desert, CA, on November 1, 2010.

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2010 AEP Fact Book

  1. 1. 2010 Fact Book 45th EEI Financial Conference Palm Desert, CA
  2. 2. “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its RegistrantSubsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and resultsto 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: the economicclimate and growth in, or contraction within, our service territory and changes in market demand and demographic patterns, inflationary or deflationary interest rate trends, volatilityin the financial markets, particularly developments affecting the availability of capital on reasonable terms and developments impairing our ability to finance new capital projects andrefinance 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 betweenincurring costs and recovery is long and the costs are material, electric load, customer growth and the impact of retail competition particularly in Ohio, weather conditions, includingstorms, and our ability to recover significant storm restoration costs through applicable rate mechanisms, available sources and costs of, and transportation for, fuels and thecreditworthiness and performance of fuel suppliers and transporters, availability of necessary generating capacity and the performance of our generating plants, our ability torecover I&M’s Donald C. Cook Nuclear Plant Unit 1 restoration costs through warranty, insurance and the regulatory process, our ability to recover regulatory assets and strandedcosts in connection with deregulation, our ability to recover increases in fuel and other energy costs through regulated or competitive electric rates, our ability to build or acquiregenerating capacity, including the Turk Plant, and transmission line facilities (including our ability to obtain any necessary regulatory approvals and permits) when needed atacceptable prices and terms and to recover those costs (including the costs of projects that are cancelled) 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 or additionalregulation of fly ash and similar combustion products that could impact the continued operation and cost recovery of our plants, timing and resolution of pending and future ratecases, negotiations and other regulatory decisions (including rate or other recovery of new investments in generation, distribution and transmission service and environmentalcompliance), resolution of litigation (including the dispute with Bank of America), our ability to constrain operation and maintenance costs, our ability to develop and execute astrategy based on a view regarding prices of electricity, natural gas and other energy-related commodities, changes in the creditworthiness of the counterparties with whom wehave contractual arrangements, including participants in the energy trading market, actions of rating agencies, including changes in the ratings of debt, volatility and changes inmarkets for electricity, natural gas, coal, nuclear fuel and other energy-related commodities, changes in utility regulation, including the implementation of ESPs and relatedregulation in Ohio and the allocation of costs within regional transmission organizations, including PJM and SPP, accounting pronouncements periodically issued by accountingstandard-setting bodies, the impact of volatility in the capital markets on the value of the investments held by our pension, other postretirement benefit plans and nucleardecommissioning trust and the impact on future funding requirements, prices and demand for power that we generate and sell at wholesale, changes in technology, particularlywith 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 and our ability to recover through rates the remaining unrecovered investment, if any, in generating units that may be retired before theend of their previously projected useful lives. Investor Relations Contacts Chuck Zebula Treasurer SVP Investor Relations 614-716-2800 cezebula@aep.com Bette Jo Rozsa Julie Sherwood Sara Macioch Managing Director Director Analyst Investor Relations Investor Relations Investor Relations 614-716-2840 614-716-2663 614-716-2835 bjrozsa@aep.com jasherwood@aep.com semacioch@aep.com2
  3. 3. Coal Generation & Regulation Operating Company Company Overview Environmental Overview
  4. 4. Company Overview3
  5. 5.  
  6. 6. Company Overview OUR FOCUS IS OUR CORE DOMESTIC UTILITY BUSINESS OPERATIONS American Electric Power Company, Inc. is one of the largest investor-owned electric public utility holding companies in the US. We provide generation, transmission and distribution services to over 5 million retail customers in eleven states (Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia) through our electric utility operating companies. We have seven regional operating companies for distribution and customer service operations that serve the customers of our eleven electric utility subsidiaries: Regional Utility Divisions Electric Utility Subsidiaries Columbus Southern Power AEP Ohio Ohio Power Wheeling Power Texas Central Company AEP Texas Texas North Company Appalachian Power Appalachian Power Kingsport Power Indiana Michigan Power Indiana Michigan Power Kentucky Power Kentucky Power Public Service Company of Oklahoma Public Service Company of Oklahoma Southwestern Electric Power Co. Southwestern Electric Power Co.4
  7. 7. Company Overview SIGNIFICANT PRESENCE THROUGHOUT THE DOMESTIC VALUE CHAIN Our US electric assets include: Almost 39,000 megawatts of generating capacity in 3 RTOs (one of the largest US generation portfolios with a significant cost advantage in many of our market areas) Approximately 39,000 circuit miles of transmission lines, including 2,116 miles of 765kV lines, the backbone of the electric interconnection grid in the Eastern U.S. Approximately 215,000 miles of overhead and underground distribution lines With our coal and transportation assets we: control over 9,000 railcars own and/or operate approximately 3,000 hopper barges, 62 towboats and 27 harbor boats operate one active coal-handling terminal with 18 millions tons of capacity AEP consumes approximately 70 million tons of coal annually.5
  8. 8. AEP Service Territory AEP EAST OPERATING COMPANIES EAST REGULATED UTILITIES AEP OHIO Appalachian Power Company (APCo) Columbus Southern Power Company (CSPCo) Indiana Michigan Power Company (I&M) Ohio Power Company (OPCo) Kingsport Power Company (KGPCo) Kentucky Power Company (KPCo) Wheeling Power Company (WPCo)6
  9. 9. AEP Service Territory AEP WEST OPERATING COMPANIES WEST REGULATED UTILITIES AEP TEXAS Public Service Company of Oklahoma (PSO) Texas Central Company (TCC) Southwestern Electric Power Company (SWEPCO) Texas North Company (TNC) Texas North Company Texas Central Company7
  10. 10. Utility Operations - Load 60,000 55,000 57,235 59,182 58,892 58,232 3 Yr. Compound Annual 50,000 48,250 Millions of 45,000 Residential Load Growth at 0.58% kWh 40,000 35,000 30,000 2006 2007 2008 2009 YTD10 45,000 49,925 Residential 48,557 50,611 50,382 40,000 38,508 Millions of 35,000 kWh 3 Yr. Compound Annual Commercial 30,000 Load Growth at 0.93% 25,000 2006 2007 2008 2009 YTD10 60,000 Com m ercial 63,555 64,508 55,000 59,656 50,000 54,428 Millions of 45,000 42,503 kWh 40,000 35,000 30,000 2006 2007 2008 2009 YTD10 3 Yr. Compound Annual Industrial Load Contraction at 3.01% Industrial8 Note: Figures do not include Wholesale and Miscellaneous Other
  11. 11. 2009 Retail Revenue  ` CUSTOMER PROFILE AEP’S SERVICE TERRITORY ENCOMPASSES APPROXIMATELY 5 MILLION CUSTOMERS IN 11 STATES Percentage of AEP System Retail Revenues Retail Revenue Composition by Customer Class* 2%1%Ohio 3% 2% 25.8% 5%VirginiaTexas 10% 33% 43.2% ResidentialOklahoma CommercialIndiana 10% IndustrialWest VirginiaKentuckyLouisiana 10% 31.1% 12%Arkansas 12%Michigan Top 10 Customers Across the AEP System By NAICS CodeTennessee 3330 PRIMARY SMELTING & REFINING OF NONFERROUS METALS 2800 CHEMICALS & ALLIED PRODUCTS 2911 PETROLEUM REFINING 1220 BITUMINOUS COAL & LIGNITE MINING 2600 PAPERS & ALLIED PRODUCTS 3060 FABRICATED RUBBER PRODUCTS 1389 OIL & GAS FIELD SERVICES 2000 FOOD & KINDRED PRODUCTS 3272/3281 STONE CLAY & CONCRETE PRODUCTS 3700 TRANSPORTATION EQUIPMENT Source: Form 10-K.9 *Note: Figures do not include Other Retail Sales
  12. 12. Domestic Generation Fleet Pumped Storage/Hydro/ Pumped Nuclear Storage/Hydro Wind/Solar 5% 1% Nuclear 7% Nat. Gas/Oil 5% 6% Nat. Gas/Oil 23% Coal/Lignite 65% Coal/Lignite 88%2010 Generation Capacity 2009 Generation Production by Fuel Type by Fuel Type Based on 39,910 MW Based on 160,276,948 MWh NERC Regional Presence RFC 71% SPP 26% ERCOT 3%10
  13. 13. Transmission Line Circuit Miles Detail Operating Company Level (Circuit Miles)Operating Company 765kV 500kV 345kV 230kV 161kV 138kV 115kV 88kV 69kV 46kV 40kV 34.5kV 23kV TotalAPCo 734 97 383 106 0 3,344 0 23 1,101 789 0 230 0 6,807CSPCo 0 0 890 0 0 906 0 0 467 0 59 0 113 2,435I&M 615 0 1,614 0 0 1,669 0 0 710 0 0 739 0 5,347KGPCo 0 0 0 0 0 0 0 0 3 0 0 27 0 30KPCo 258 0 8 0 46 335 0 0 544 55 0 3 0 1,249OPCo 509 0 909 0 0 2,445 0 0 2,183 0 0 365 112 6,523PSO 0 0 579 34 8 2,176 10 0 812 0 0 0 0 3,619SWEPCO 0 0 672 0 233 1,320 56 0 1,503 0 0 0 0 3,784TCC 0 0 626 0 0 2,332 0 0 1,671 0 0 0 0 4,629TNC 0 0 223 0 0 1,497 0 0 2,599 0 0 0 0 4,319WPCo 0 16 9 0 0 174 0 0 88 0 0 0 0 287Total 2,116 113 5,913 140 287 16,198 66 23 11,681 844 59 1,364 225 39,029 State Level (Circuit Miles) State 765kV 500kV 345kV 230kV 161kV 138kV 115kV 88kV 69kV 46kV 40kV 34.5kV 23kV TotalArkansas 0 0 40 0 233 168 42 0 461 0 0 0 0 944Indiana 599 0 1,380 0 0 1,426 0 0 414 0 0 591 0 4,410Kentucky 258 0 8 0 46 335 0 0 544 55 0 3 0 1,249Louisiana 0 0 105 0 0 260 0 0 230 0 0 0 0 595Michigan 16 0 234 0 0 242 0 0 296 0 0 148 0 936Ohio 509 0 1,799 0 0 3,350 0 0 2,650 0 59 365 225 8,957Oklahoma 0 0 625 34 8 2,202 10 0 812 0 0 0 0 3,691Tennessee 0 0 0 91 0 154 0 0 3 0 0 27 0 275Texas 0 0 1,330 0 0 4,696 14 0 5,082 0 0 0 0 11,122W. Virginia 385 17 323 0 0 1,630 0 23 458 741 0 89 0 3,666Virginia 349 96 69 15 0 1,735 0 0 731 48 0 141 0 3,184Total 2,116 113 5,913 140 287 16,198 66 23 11,681 844 59 1,364 225 39,029 Note: Transmission line circuit miles are current as of 12/31/09 11
  14. 14. Distribution Line Detail By Operating By State Line Miles* Company Line Miles* Tennessee 1,536 | KGPCo 1,536 Virginia 30,426 | KPCo 9,926 W. Virginia 21,529 | APCo 50,460 Kentucky 9,926 | OPCo 26,472 Ohio 45,348 | CSP 18,876 Michigan 5,288 | I&M 20,218 Indiana 14,930 | WPCo 1,495 Texas 51,904 | TCC 29,491 Oklahoma 21,951 | TNC 13,815 Arkansas 4,471 | PSO 21,951 Louisiana 7,568 | SWEPCO 20,637 Total 214,877 Total 214,877 * Includes approximately 30,400 miles of underground circuit miles Year End 2009 data per Small World Graphics.12
  15. 15.  
  16. 16. Coal Generation & Regulation Operating Company Company Overview Environmental Overview
  17. 17. Operating Company Overview • AEP East Regional Utilities • AEP West Regional Utilities13
  18. 18.  
  19. 19. AEP East Regional Utilities14
  20. 20. Appalachian Power President and Chief Operating Officer: Charles Patton Appalachian Power Company (APCo) (organized in Virginia in 1926) is engaged in the generation, transmission and distribution of electric power to approximately 959,000 retail customers in the southwestern portion of Virginia and southern West Virginia, and in supplying and marketing electric power at wholesale to other electric utility companies, municipalities and other market participants. At December 31, 2009, APCo and its wholly owned subsidiaries had 2,577 employees. Among the principal industries served by APCo are paper and rubber products, coal mining, primary metals, textile mill products, and stone, clay and glass products. In addition to its AEP System interconnections, APCo also is Total Customers at 12/31/09: interconnected with the following unaffiliated utility companies: Carolina Power & Light Company, Duke Carolina and Virginia Electric Residential 818,000 and Power Company. APCo has several points of interconnection with TVA and has entered into agreements with TVA under which APCo Commercial 130,000 and TVA interchange and transfer electric power over portions of their Industrial 4,000 respective systems. APCo is a member of PJM. Other 7,000 Total 959,000 PRINCIPAL INDUSTRIES SERVED: Generating Capacity 6,287 MW Primary Metals Coal Mining Generating Capacity by Fuel Mix: Chemical • Coal: 81.0% Paper Products • Hydro/Pump: 10.8% • Nat Gas: 8.2% Transmission Miles 6,807 Distribution Miles 50,46015
  21. 21. Appalachian Power CAPITAL STRUCTURE (in thousands) 2008 2009 9/30/2010 CAPITAL STRUCTURE Debt Equity Total Debt Equity Total Debt Equity Total Capitalization Per Balance Sheet 3,369,400 2,394,343 5,763,743 3,706,852 2,789,329 6,496,181 3,616,072 2,800,963 6,417,035 % of Capitalization Per Balance Sheet 58.5% 41.5% 100.0% 57.1% 42.9% 100.0% 56.4% 43.6% 100.0% FFO Interest Coverage 1.7 3.02 3.39* FFO Total Debt 4.6% 11.4% 13.8%* * - calculated on rolling 12-month avg. 2009 Financial Data * (in thousands) 2010 Asset Data ** (in thousands) Revenue $ 2,182,000 As of 9/30/10 % of AEP Retail 21% Total Assets $ 9,583,474 Net Income $ 156,000 Net Plant Assets $ 7,221,927 Capital Expenditures $ 544,000 Cash $ 2,201 Operating Information*** 2009 retail electric sales in megawatt-hours 30,414,469 2009 firm wholesale sales in megawatt-hours 3,420,505 2009 average cost per kilowatt-hour (residential) 8.37 cents 2009 System Peak – (date) January 16 8,308 MW Sources: * 2009 Form 10-K ** 3Q10 Form 10-Q (unaudited) *** 2009 FERC Form 116
  22. 22. Appalachian Power APPALACHIAN AREA TYPICAL BILL COMPARISON ** INVESTOR OWNED UTILITIES * West Virginia $/month Virginia $/month West Virginia Customers APCo 80.47 Old Dominion Power 91.64 APCo 439,831 AEP – Wheeling 80.47 Potomac Edison 95.75 Monongahela Power 381,193 Potomac Edison 91.78 Dominion Virginia 106.32 Potomac Edison 130,304 Monongahela Power 91.78 APCo 114.03 AEP – Wheeling 41,334 Tennessee $/Month Virginia Customers AEP – Kingsport 82.92 APCo 518,043 Dominion Virginia 2,268,601 ** Typical bills are displayed in $/month, based on 1,000 kWh of residential usage. Old Dominion Power 30,017 Billing amounts sourced from the EEI Typical Bills and Average Rates Report as of January 1, 2010. Potomac Edison 101,722 MAJOR CUSTOMERS: CNX Gas Company (VA) Tennessee Customers Greif Brothers Corporation (VA) AEP - Kingsport 46,961 Century Aluminum of West Virginia (WV) WVA Manufacturing (WV) Roanoke Electric Steel Corporation (VA) Georgia-Pacific Corporation (VA) Eastern Associated Coal Corp (WV) * Customer counts are as of December 31, 2008 and were sourced from table 10 Felman Production (WV) at http://www.eia.doe.gov/cneaf/electricity/esr/esr_sum.html Alcan Rolled Products (WV) Consolidation Coal Company (VA) Top 10 Customers = 40% of industrial sales (data for year ended December 2009) Metropolitan areas account for 37% of ultimate sales 110 persons per square mile (U.S. = 87) (data for 12 months ended December 2009)17
  23. 23. AEP Ohio - Columbus Southern Power President and Chief Operating Officer: Joe Hamrock AEP Ohio-Columbus Southern Power Company (CSPCo) (organized in Ohio in 1937, the earliest direct predecessor company having been organized in 1883) is engaged in the generation, transmission and distribution of electric power to approximately 749,000 retail customers in Ohio, and in supplying and marketing electric power at wholesale to other electric utilities, municipalities and other market participants. At December 31, 2009, CSPCo had 1,283 employees. CSPCo’s service area is comprised of two areas in Ohio, which include portions of Total Customers at 12/31/09: twenty-five counties. One area includes the City of Columbus and the other is a Residential 667,000 predominantly rural area in south central Ohio. Among the principal industries services are primary metals, chemical and allied products, health services and Commercial 78,000 electronic machinery. In addition to its AEP System interconnections, CSPCo also is interconnected with the following unaffiliated utility companies: Duke Energy Industrial 3,500 Ohio, DP&L and Ohio Edison Company. CSPCo is a member of PJM. Other 500 Total 749,000 PRINCIPAL INDUSTRIES SERVED: Primary Metals Generating Capacity 3,738 MW Chemicals Generating Capacity by Fuel Mix: Food Products • Coal 63.9% Rubber & Plastic Products • Natural Gas 36.1% Fabricated Metals Transmission Miles 2,435 Distribution Miles 18,87618
  24. 24. AEP Ohio - Columbus Southern PowerCAPITAL STRUCTURE (in thousands) 2008 2009 9/30/2010 CAPITAL STRUCTURE Debt Equity Total Debt Equity Total Debt Equity Total Capitalization Per Balance Sheet 1,518,459 1,245,265 2,763,724 1,560,595 1,359,835 2,920,430 1,588,753 1,494,158 3,082,911 % of Capitalization Per Balance Sheet 54.9% 45.1% 100.0% 53.4% 46.6% 100.0% 51.5% 48.5% 100.0% FFO Interest Coverage 5.24 5.31 5.17* FFO Total Debt 26.3% 25.9% 24.0%* * - calculated on rolling 12-month avg. 2009 Financial Data * (in thousands) 2010 Asset Data ** (in thousands) As of 9/30/10 Revenue $ 1,735,000 % of AEP Retail 17% Total Assets $ 4,414,230 Net Income $ 272,000 Net Plant Assets $ 3,544,007 Capital Expenditures $ 303,000 Cash $ 1,679 Operating Information*** 2009 retail sales in megawatt-hours 20,673,469 2009 firm wholesale sales in megawatt-hours 498,182 2009 average cost per kilowatt-hour (residential) 10.26 cents 2009 System Peak – June 25 4,209 MW Sources: * 2009 Form 10-K ** 3Q10 Form 10-Q (unaudited) *** 2009 FERC Form 1 19
  25. 25. AEP Ohio - Columbus Southern Power OHIO INVESTOR OWNED UTILITIES * TYPICAL BILL COMPARISON **** Ohio Customers Ohio $/month AEP (OPCo) 91.03 AEP Ohio ** 1,458,111 AEP (CSP) 106.09 First Energy *** 1,844,202 FE (Toledo Edison) 110.55 DP&L 112.25 Duke Energy Ohio 677,178 FE (Ohio Edison) 112.78 DP&L 514,094 FE (CEI) 127.88 ** AEP Ohio - CSPCo = 746,664 *** First Energy - Toledo Edison = 270,430 Duke Energy Ohio 135.69 OPCo = 711,447 CEI = 701,554 Ohio Edison = 872,218 **** Typical bills are displayed in $/month, based on 1,000 kWh of residential usage. Billing amounts sourced * Customer counts are as of December 31, 2008 and were sourced from table 10 from the EEI Typical Bills and Average Rates Report at http://www.eia.doe.gov/cneaf/electricity/esr/esr_sum.html as of January 1, 2010. Ohio rates represent POLR bundled residential rates. MAJOR CUSTOMERS: Ormet Aluminum Eramet Marietta, Inc. Top 10 customers = 60% of industrial sales E I duPont de Nemours HQ Kraton Polymers Metropolitan areas account for 86% of ultimate sales Glatfelter Company 241 persons per square mile (U.S. = 87) Anheuser-Busch, Inc. Griffin Wheel Company, Inc. (data for 12 months ended December 2009) Ross Products (data for year ended December 2009)20
  26. 26. Indiana Michigan Power President and Chief Operating Officer: Paul Chodak Indiana Michigan Power Company (I&M) (organized in Indiana in 1925) is engaged in the generation, transmission and distribution of electric power to approximately 583,000 retail customers in northern and eastern Indiana and southwestern Michigan, and in supplying and marketing electric power at wholesale to other electric utility companies, rural electric cooperatives, municipalities and other market participants. At December 31, 2009, I&M had 3,008 employees. Since 1975, I&M has Total Customers at 12/31/09: leased and operated the assets of the municipal system of the City of Residential 507,000 Fort Wayne, Indiana. This lease extends through February 2010 and its termination is currently being litigated. In addition to its AEP Commercial 69,000 System interconnections, I&M is interconnected with the following unaffiliated utility companies: Central Illinois Public Service Company, Industrial 5,000 Duke Ohio, Commonwealth Edison Company, Consumers Energy Other 2,000 Company, Illinois Power Company, Indianapolis Power & Light Company, Louisville Gas and Electric Company, Northern Indiana Total 583,000 Public Service Company, Duke Indiana and Richmond Power & Light Company. I&M is a member of PJM. Generating Capacity 5,821 MW* PRINCIPAL INDUSTRIES SERVED: Generating Capacity by Fuel Mix: • Coal: 68.6% Primary Metals Chemicals and Allied Products • Nuclear: 31.1% Transportation Equipment • Hydro: 0.3% Rubber and Miscellaneous Plastic Products Fabricated Metals Products Transmission Miles 5,347 Distribution Miles 20,218 * Includes AEGCo’s share of Rockport of 1, 310MW21
  27. 27. Indiana Michigan PowerCAPITAL STRUCTURE (in thousands) 2008 2009 9/30/2010 CAPITAL STRUCTURE Debt Equity Total Debt Equity Total Debt Equity Total Capitalization Per Balance Sheet 1,853,950 1,442,898 3,296,848 2,077,906 1,680,860 3,758,766 2,118,911 1,724,825 3,843,736 % of Capitalization Per Balance Sheet 56.2% 43.8% 100.0% 55.3% 44.7% 100.0% 55.1% 44.9% 100.0% FFO Interest Coverage 4.4 5.91 5.22* FFO Total Debt 22.0% 28.9% 25.5%* * - calculated on rolling 12-month avg. 2009 Financial Data * (in thousands) 2010 Asset Data ** (in thousands) As of 9/30/10 Revenue $ 991,000 % of AEP Retail 10% Total Assets $ 7,101,587 Net Income $ 216,000 Net Plant Assets $ 4,226,830 Capital Expenditures $ 333,000 Cash $ 789 Operating Information*** 2009 retail electric sales in megawatt-hours 17,642,645 2009 firm wholesale sales in megawatt-hours 4,513,856 2009 average cost per kilowatt-hour (residential) 7.67 cents 2009 System Peak – June 25 4,262MW Sources: * 2009 Form 10-K ** 3Q10 Form 10-Q (unaudited) *** 2009 FERC Form 1 22
  28. 28. Indiana Michigan Power INDIANA & MICHIGAN INVESTOR OWNED UTILITIES * TYPICAL BILL COMPARISON ** Indiana Customers Indiana $/month Michigan $/month I&M 455,120 IP & L 80.07 I&M 73.15 IP & L 468,203 I&M 85.49 Consumers Energy 108.80 NIPSCO 456,302 Duke Energy Indiana 97.16 Detroit Edison 129.05 Duke Energy Indiana 776,647 NIPSCO 110.80 SIGECo 146,339 SIGECo 142.11 ** Typical bills are displayed in $/month, based on 1,000 kWh of residential usage. Michigan Customers Billing amounts sourced from the EEI Typical Bills and Average Rates Report as of January 1, 2010. I&M 127,648 Consumers Energy 1,779,1841,804,232 MAJOR CUSTOMERS: Detroit Edison 2,156,2142,148,520 Steel Dynamics Inc. (IN) Dock Foundry (MI)* Customer counts are as of December 31, 2008 and were sourced from table 10 American Axle and Mfg. Co, Inc. (MI) at http://www.eia.doe.gov/cneaf/electricity/esr/esr_sum.html IN TEK (IN) Whirlpool Corporation (MI) Saint Gobain Corporation USA (IN) White Pigeon Paper Company (MI) Top 10 Customers = 49% of industrial sales Uniroyal Goodrich Tire Co. (IN) Metropolitan areas account for 68% of ultimate sales The Minute Maid Company (MI) New Energy Corp (IN) 205 persons per square mile (U.S. = 87) Rexam Closure Systems, Inc. (MI) (data for 12 months ended December 2009) (data for year ended December 2009)23
  29. 29. Kentucky Power President and Chief Operating Officer: Greg Pauley Kentucky Power Company (KPCo) (organized in Kentucky in 1919) is engaged in the generation, transmission and distribution of electric power to approximately 175,000 retail customers in an area in eastern Kentucky, and in supplying and marketing electric power at wholesale to other electric utility companies, municipalities and other market Total Customers at 12/31/09: participants. At December 31, 2009, KPCo had 478 employees. In Residential 143,500 addition to its AEP System interconnections, KPCo is interconnected with the following unaffiliated utility companies: Commercial 29,500 Kentucky Utilities Company and East Kentucky Power Industrial 1,500 Cooperative Inc. KPCo is also interconnected with TVA. KPCo is a member of PJM. Other 500 Total 175,000 Generating Capacity 1,078 MW Generating Capacity by Fuel Mix: PRINCIPAL INDUSTRIES SERVED: Petroleum Refining • Coal: 100% Coal Mining Primary Metals Transmission Miles 1,249 Chemical & Allied Products Distribution Miles 9,926 Electric/Gas/Sanitary Services24
  30. 30. Kentucky PowerCAPITAL STRUCTURE (in thousands) 2008 2009 9/30/2010 CAPITAL STRUCTURE Debt Equity Total Debt Equity Total Debt Equity Total Capitalization Per Balance Sheet 549,954 398,008 947,962 549,207 431,784 980,991 548,847 434,919 983,766 % of Capitalization Per Balance Sheet 58.0% 42.0% 100.0% 56.0% 44.0% 100.0% 55.8% 44.2% 100.0% FFO Interest Coverage 2.51 4.20 3.17* FFO Total Debt 9.9% 19.9% 14.9%* * - calculated on rolling 12-month avg. 2009 Financial Data * (in thousands) 2010 Asset Data ** (in thousands) As of 9/30/10 Revenue $ 487,000 % of AEP Retail 5% Total Assets $ 1,502,188 Net Income $ 24,000 Net Plant Assets $ 1,135,618 Capital Expenditures $ 64,000 Cash $ 621 Operating Information*** 2009 retail electric sales in megawatt-hours 7,068,456 2009 firm wholesale sales in megawatt-hours 93,766 2009 average cost per kilowatt-hour (residential) 7.93cents 2009 System Peak – January 16 1,674 MW Sources: * 2009 Annual Report ** 3Q10 Financial Statements (unaudited) *** 2009 FERC Form 1 25
  31. 31. Kentucky Power KENTUCKY INVESTOR OWNED UTILITIES * TYPICAL BILL COMPARISON ** Kentucky Customers Kentucky $/month KPCo 175,646 Kentucky Utilities 73.57 Duke Energy Kentucky 134,703 LG&E 75.26 Kentucky Utilities 506,419 LG & E 400,699 KPCo 76.57 Duke Energy Kentucky 80.02* Customer counts are as of December 31, 2008 and were sourced from table 10 at http://www.eia.doe.gov/cneaf/electricity/esr/esr_sum.html ** Typical bills are displayed in $/month, based on 1,000 kWh of residential usage. Billing amounts sourced from the EEI Typical Bills and Average Rates Report as of January 1, 2010. MAJOR CUSTOMERS: Catlettsburg Refining LLC AK Steel Holding Corporation Sidney Coal Company, Inc. Top 10 customers = 65% of industrial sales KES Acquisition Company LLC Metropolitan areas account for 40% of ultimate sales Air Products & Chemicals, Inc. Perry County Coal Corporation 68 persons per square mile (U.S. = 87) Blue Diamond Coal Company (data for 12 months ended December 2009) McCoy Elkhorn Coal Corporation Kentucky West Virginia Gas Co. Czar Coal Corporation (data for year ended December 2009)26
  32. 32. AEP Ohio - Ohio Power President and Chief Operating Officer: Joe Hamrock AEP Ohio- Ohio Power Company (OPCo) (organized in Ohio in 1907 and re-incorporated in 1924) is engaged in the generation, transmission and distribution of electric power to approximately 710,000 retail customers in the northwestern, east central, eastern and southern sections of Ohio, and in supplying and marketing electric power at wholesale to other electric utility companies, municipalities and other market participants. At December 31, 2009, OPCo had 2,391 employees. In addition to its AEP System interconnections, OPCo is interconnected with the following unaffiliated utility companies: Duke Total Customers at 12/31/09: Ohio, The Cleveland Electric Illuminating Company, DP&L, Residential 608,000 Duquesne Light Company, Kentucky Utilities Company, Monongahela Power Company, Ohio Edison Company, The Toledo Commercial 92,500 Edison Company and West Penn Power Company. OPCo is a Industrial 7,000 member of PJM. Other 2,500 Total 710,000 PRINCIPAL INDUSTRIES SERVED: Generating Capacity 8,508 MW Primary Metals Generating Capacity by Fuel Mix: Petroleum Refining • Coal: 99.7% Rubber & Plastic Products Chemicals & Allied Products • Hydro: 0.3% Stone, Clay Glass and Concrete Products Transmission Miles 6,523 Distribution Miles 26.47227
  33. 33. AEP Ohio - Ohio PowerCAPITAL STRUCTURE (in thousands) 2008 2009 9/30/2010 CAPITAL STRUCTURE Debt Equity Total Debt Equity Total Debt Equity Total Capitalization Per Balance Sheet 3,173,263 2,455,371 5,628,634 3,242,505 3,251,322 6,493,827 2,929,386 3,237,649 6,167,035 % of Capitalization Per Balance Shee 56.4% 43.6% 100.0% 49.9% 50.1% 100.0% 47.5% 52.5% 100.0% FFO Interest Coverage 3.1 5.34 5.40* FFO Total Debt 13.3% 22.1% 24.0%* * - calculated on 12-month rolling avg. 2009 Financial Data * (in thousands) 2010 Asset Data ** (in thousands) Revenue $ 1,679,000 As of 9/30/10 % of AEP Retail 16% Total Assets $ 8,684,457 Net Income $ 306,000 Net Plant Assets $ 6,647,889 Capital Expenditures $ 418,000 Cash $ 1,354 Operating Information 2009 retail sales in megawatt-hours 24,936,379 2009 firm wholesale sales in megawatt-hours 2,149,774 2009 average cost per kilowatt-hour (residential) 8.69 cents 2009 System Peak – January 20 4,972 MW Sources: * 2009 Form 10-K ** 3Q10 Form 10-Q (unaudited) *** 2009 FERC Form 1 28
  34. 34. AEP Ohio - Ohio Power OHIO INVESTOR OWNED UTILITIES * TYPICAL BILL COMPARISON **** Ohio Customers Ohio $/month AEP (OPCo) 91.03 AEP Ohio ** 1,458,111 AEP (CSP) 106.09 First Energy *** 1,844,202 FE (Toledo Edison) 110.55 Duke Energy Ohio 677,178 DP&L 112.25 FE (Ohio Edison) 112.78 DP&L 514,094 FE (CEI) 127.88 ** AEP Ohio - CSPCo = 746,664 *** First Energy - Toledo Edison = 270,430 Duke Energy Ohio 135.69 OPCo = 711,447 CEI = 701,554 Ohio Edison = 872,218 **** Typical bills are displayed in $/month, based on 1,000* Customer counts are as of December 31, 2008 and were sourced from table 10 kWh of residential usage. Billing amounts sourced from the EEI Typical Bills and Average Rates Report at http://www.eia.doe.gov/cneaf/electricity/esr/esr_sum.html as of January 1, 2010. Ohio rates represent POLR bundled residential rates. MAJOR CUSTOMERS: Ormet Primary Aluminum Corp. The Premcor Refining Group, Inc. The Timken Company Top 10 customers = 47% of industrial sales Republic Engineered Products, LLC Wheeling-Pittsburgh Steel Corp. Metropolitan areas account for 59% of ultimate sales Globe Metallurgical, Inc. 137 persons per square mile (U.S. = 87) Linde Gases, LLC Marathon Ashland Petroleum, LLC (data for 12 months ended December 2009) Owens Corning Sales, LLC. (data for year ended December 2009)29
  35. 35. AEP West Regional Utilities30
  36. 36. Public Service Company of Oklahoma President and Chief Operating Officer: Stuart Solomon Public Service Company of Oklahoma (PSO) (organized in Oklahoma in 1913) is engaged in the generation, transmission and distribution of electric power to approximately 531,000 retail customers in eastern and southwestern Oklahoma, and in supplying and marketing electric power at wholesale to other electric utility companies, municipalities, rural electric cooperatives and other market participants. At December 31, 2009, PSO had 1,281 employees. In addition to its AEP System interconnections, PSO is interconnected with Empire District Electric Co., Oklahoma Gas & Electric Co., Southwestern Public Service Co. and Westar Energy, Inc. PSO is a member of SPP. Total Customers at 12/31/09: Residential 457,000 Commercial 60,000 Industrial 7,000 PRINCIPAL INDUSTRIES SERVED: Other 7,000 Paper Products Total 531,000 Oil & Gas Extraction Transportation Equipment Stone, Clay and Glass Products Generating Capacity 4,465 MW Petroleum Refining Generating Capacity by Fuel Mix: • Coal: 23.1% • Natural Gas: 76.3% • Oil: 0.6% Transmission Miles 3,619 Distribution Miles 21,95131
  37. 37. Public Service Company of OklahomaCAPITAL STRUCTURE (thousands) 2008 2009 9/30/2010 CAPITAL STRUCTURE Debt Equity Total Debt Equity Total Debt Equity Total Capitalization Per Balance Sheet 955,167 753,508 1,708,675 968,121 817,000 1,785,121 993,667 853,764 1,847,431 % of Capitalization Per Balance Sheet 55.9% 44.1% 100.0% 54.2% 45.8% 100.0% 53.8% 46.2% 100.0% FFO Interest Coverage 4.3 4.01 2.80* FFO Total Debt 27.2% 18.7% 11.6%* * - calculated on rolling 12-month avg 2009 Financial Data * (in thousands) 2010 Asset Data ** (in thousands) As of 9/30/10 Revenue $ 998,000 % of AEP Retail 10% Total Assets $ 3,227,713 Net Income $ 75,000 Net Plant Assets $ 2,689,348 Capital Expenditures $ 175,000 Cash $ 1,587 Operating Information*** 2009 retail electric sales in megawatt-hours 16,955,308 2009 firm wholesale sales in megawatt-hours 6,623 2009 average cost per kilowatt-hour (residential) 7.36 cents 2009 System Peak – July 13 3,994 MW Sources: * 2009 Form 10-K ** 3Q10 Form 10-Q (unaudited) *** 2009 FERC Form 1 32
  38. 38. Public Service Company of Oklahoma OKLAHOMA INVESTOR OWNED UTILITIES * TYPICAL BILL COMPARISON ** Oklahoma Customers Oklahoma $/month PSO 525,801 PSO 62.02 OG&E 702,603 Empire District 78.65 OG&E 86.89 * Customer counts are as of December 31, 2008 and were sourced from table 10 at ** Typical bills are displayed in $/month, based http://www.eia.doe.gov/cneaf/electricity/esr/esr_sum.ht on 1,000 kWh of residential usage. Billing ml amounts sourced from the EEI Typical Bills and Average Rates Report as of January 1, 2010. MAJOR CUSTOMERS: Sheffield Steel Weyerhaeuser Valliant Company Top 10 customers = 45% of industrial sales Elkem Metals Metropolitan areas account for 76% of ultimate sales Kimberly Clark Corp. Goodyear Tire & Rubber Company 48 persons per square mile (U.S. = 87) American Airlines (data for 12 months ended December 2009) Sinclair Sun Refining Marmac Resources Terra Nitrogen (data for year ended December 2009)33
  39. 39. Southwestern Electric PowerPresident and Chief OperatingOfficer: Venita McCellon-AllenSouthwestern Electric Power Company (SWEPCO)(organized in Delaware in 1912) is engaged in the generation, transmission anddistribution of electric power to approximately 474,000 retail customers in northeasternTexas, northwestern Louisiana and western Arkansas, and in supplying and marketingelectric power at wholesale to other electric utility companies, municipalities, rural electriccooperatives and other market participants. At December 31, 2009, SWEPCo had 1,671employees. The territory served by SWEPCo also includes several military installations,colleges, and universities. SWEPCO also owns and operates a lignite coal miningoperation. In addition to its AEP System interconnections, SWEPCo is also interconnectedwith CLECO Corp., Empire District Electric Co., Entergy Corp. and Oklahoma Gas &Electric Co. SWEPCo is a member of SPP.In November 2009, SWEPCo signed a letter of intent to purchase the transmission anddistribution assets and to assume certain liabilities of Valley Electric Membership Total Customers at 12/31/09:Corporation (VEMCO) for approximately $96 million, subject to regulatory approval by the Residential 400,000LPSC and the APSC. VEMCO services approximately 30,000 member customers in eightparishes south of Shreveport, Louisiana. SWEPCo expects to complete the transaction in Commercial 66,500the second quarter of 2010. Industrial 7,000 Other 500 Total 474,000 PRINCIPAL INDUSTRIES SERVED: Food Processing Generating Capacity 5,307 MW Pulp and Paper Manufacturing Generating Capacity by Fuel Mix: Oil and Gas Extraction • Coal: 38.5% Chemicals and Allied Products • Natural Gas: 44.0% Petroleum Refining • Lignite: 17.5% Transmission Miles 3,784 Distribution Miles 20,63734
  40. 40. Southwestern Electric PowerCAPITAL STRUCTURE (in thousands) 2008 2009 9/30/2010 CAPITAL STRUCTURE Debt Equity Total Debt Equity Total Debt Equity Total Capitalization Per Balance Sheet 1,487,847 1,253,626 2,741,473 1,481,043 1,528,854 3,009,897 1,772,627 1,666,353 3,438,980 % of Capitalization Per Balance Sheet 54.3% 45.7% 100.0% 49.2% 50.8% 100.0% 51.5% 48.5% 100.0% FFO Interest Coverage 3.26 4.14 3.34* FFO Total Debt 16.0% 19.3% 14.3%* * - calculated on rolling 12-month avg 2009 Financial Data * (in thousands) 2010 Asset Data ** (in thousands) As of 9/30/10 Revenue $ 1,039,000 % of AEP Retail 10% Total Assets $ 5,079,134 Net Income $ 114,000 Net Plant Assets $ 4,215,158 Capital Expenditures $ 597,000 Cash $ 1,882 Operating Information 2009 retail electric sales in megawatt-hours 16,086,255 2009 firm wholesale sales in megawatt-hours 5,897,295 2009 average cost per kilowatt-hour (residential) 7.35 cents 2009 System Peak – July 13 4,750 MW Sources: * 2009 Form 10-K ** 3Q10 Form 10-Q (unaudited) *** 2009 FERC Form 1 35
  41. 41. Southwestern Electric Power SOUTHWESTERN INVESTOR OWNED UTILITIES * TYPICAL BILL COMPARISON ** Arkansas Customers Arkansas $/month Louisiana $/month Texas $/month SWEPCo 112,843 OG&E 57.37 SWEPCo 69.13 SWEPCo 63.07 SWEPCo 73.20 Entergy Gulf St 83.97 SPSCo 80.48 Entergy AR 688,951 Empire District 87.44 Entergy NO 95.65 Entergy TX 81.70 OG&E 64,284 Entergy AR 106.74 Entergy LA 100.21 El Paso 113.16 Louisiana Customers CLECO 104.29 SWEPCo 178,634 ** Typical bills are displayed in $/month, based on 1,000 kWh of residential usage. Billing amounts sourced from the EEI Typical Bills and Average Rates Report as of January 1, 2010. CLECO 271,663 Entergy 1,171,895 MAJOR CUSTOMERS: Texas Customers SWEPCo 177,786 Lone Star Steel Company (TX) International Paper Company (TX) El Paso 273,185 General Motors Corporation (LA) SPSCo 279,551 Calumet Lubricants (LA) Libbey Glass Inc. (LA) Entergy TX 396,885 Domtar, Inc (AR)* Customer counts are as of December 31, 2008 and were sourced from table 10 Pilgrim Pride Corporation (TX) at http://www.eia.doe.gov/cneaf/electricity/esr/esr_sum.html Cooper Tire & Rubber Company (AR) Letourneau Inc.(TX) Big Three Industrial Gas (TX) Tyson Foods AR) Top 10 customers = 50% of industrial sales Glad Manufacturing (AR) Metropolitan areas account for 76% of ultimate sales 82 persons per square mile (U.S. = 87) (data for year ended December 2009) (data for 12 months ended December 2009)36
  42. 42. AEP Texas Central Company President and Chief Operating Officer: Wade Smith AEP Texas - Texas Central Company (TCC) (organized in Texas in 1945) is engaged in the transmission and distribution of electric power to approximately 766,000 retail customers through REPs in southern Texas. Under the Texas Act, TCC has completed the final stage of exiting the generation business and has sold of all of its generation assets. At December 31, 2009, TCC had 1,174 employees. In addition to its AEP System interconnections, TCC is a member of ERCOT. PRINCIPAL INDUSTRIES SERVED: Total Customers at 12/31/09: Petroleum Refining (Based on electric meters) MAJOR CUSTOMERS: Chemicals & Allied Products Residential 654,000 Valero Energy Corporation Oil and Gas Extraction Commercial 105,000 Javelina Refinery Food Processing Formosa Industrial 5,000 Koch Refinery West Top 10 customers = 49% of industrial sales* ($) Other 2,000 Equistar Bay City Metropolitan areas account for 78% ultimate Total 766,000 (data for year ended December 2009) sales 58 persons per square mile (U.S. = 87) Transmission Miles 4,629 * Industrial % is in terms of wires revenues Distribution Miles 29,491 (data for 12 months ended December 2009)37
  43. 43. AEP Texas Central CompanyCAPITAL STRUCTURE (in thousands) 2008 2009 9/30/2010 CAPITAL STRUCTURE Debt Equity Total Debt Equity Total Debt Equity Total Capitalization Per Balance Sheet 2,901,590 519,964 3,421,554 2,757,966 600,749 3,358,715 2,610,238 624,527 3,234,765 % of Capitalization Per Balance Sheet 84.8% 15.2% 100.0% 82.1% 17.9% 100.0% 80.7% 19.3% 100.0% FFO Interest Coverage 3.5 3.52 3.67* FFO to Total Debt 19.9% 17.2% 18.9%* * - calculated on rolling 12-month avg 2009 Financial Data * (in thousands) 2010 Asset Data ** (in thousands) Revenue $ 721,000 As of 9/30/10 % of AEP Retail 7% Total Assets $ 5,099,978 Net Income $ 82,000 Net Plant Assets $ 2,566,203 Capital Expenditures $ 176,000 Cash $ 200 Sources: * 2009 Annual Report ** 3Q10 Financial Statements (unaudited)38
  44. 44. AEP Texas North Company President and Chief Operating Officer: Wade Smith AEP Texas - Texas North Company (TNC) (organized in Texas in 1927) is engaged in the transmission and distribution of electric power to approximately 185,000 retail customers through REPs in west and central Texas. TNC’s remaining generating capacity that is not deactivated has been transferred to an affiliate at TNC’s cost pursuant to an agreement effective through 2027. At December 31, 2009, TNC had 368 employees. The territory served by TNC also includes several military installations and correctional facilities. In addition to its AEP System interconnections, TNC is a member of ERCOT. Total Customers at 12/31/09: (Based on electric meters) Residential 145,000 PRINCIPAL INDUSTRIES SERVED: Commercial 30,000 MAJOR CUSTOMERS: Oil and Gas Extraction Food Processing Industrial 5,000 Zoltec Corporation Pipelines, except Natural Gas Other 5,000 Sheridan Production Co. Stone, Clay and Glass Production Kinder Morgan Total 185,000 Electric Equipment Tyson Foods, Inc. EBAA Iron Bandag, LLC. Generating Capacity 377 MW Oklaunion Plant – Vernon, TX Top 10 customers = 40% industrial sales* (excludes 270 MW of decommissioned plants) ($) (data for year ended December 2009) Generating Capacity by Fuel Mix: Metropolitan areas account for 57% ultimate sales • Coal: 58.3% 8 persons per square mile (U.S. = 87) • Gas: 40.5% *Industrial % is in terms of wires revenues • Oil: 1.2% (data for 12 months ended December 2009) Transmission Miles 4,319 Distribution Miles 13,81539
  45. 45. AEP Texas North CompanyCAPITAL STRUCTURE (in thousands) 2008 2009 9/30/2010 CAPITAL STRUCTURE Debt Equity Total Debt Equity Total Debt Equity Total Capitalization Per Balance Sheet 397,651 325,825 723,476 446,256 312,260 758,516 400,155 307,412 707,567 % of Capitalization Per Balance Sheet 55.0% 45.0% 100.0% 58.8% 41.2% 100.0% 56.6% 43.4% 100.0% FFO Interest Coverage 4.7 3.41 3.75* FFO Total Debt 21.9% 12.8% 15.7%* * - calculated on rolling 12-month avg. 2009 Financial Data * (in thousands) 2010 Asset Data ** (in thousands) As of 9/30/10 Revenue $ 115,000 % of AEP Retail 1% Total Assets $ 1,150,479 Net Income $ 18,000 Net Plant Assets $ 992,014 Capital Expenditures $ 94,000 Cash $ 200 Sources: * 2009 Annual Report ** 3Q10 Financial Statements (unaudited)40
  46. 46.  
  47. 47. Coal Generation & Regulation Operating Company Company Overview Environmental Overview
  48. 48. Regulation • Regulatory Strategy • Rate Case Filing Requirements • Regulatory Activity Underway • Commission Overviews • Approved Rate Base and ROE by Operating Company41
  49. 49.  
  50. 50. Regulatory Strategy: Reduce Lag  Maximize frequency of filings  Seek ability to pro-forma both capital and O&M through date which rates are effective  Single-issue cost recovery  Reliability  Vegetation  Environmental  Trackers/Riders/Regulatory Adjustment Clauses  Federally-approved transmission costs  Fuel and emissions  Energy efficiency programs  Formula rates  Including periodic true-ups and approved earnings bands  Future test years  Accelerated cost recovery/depreciation/replacement cost accounting  Pre-Approvals  Securitization  Return on CWIP The strategy: reduce the time between in-service dates and rate recovery42
  51. 51. Summary of Rate Case Filing Requirements Arkansas Indiana Kentucky Louisiana Michigan Ohio Oklahoma Texas Virginia West Virginia FERC General Time Limitations Between Cases No Yes No No No No No No Yes No No Period of Limitation (months) -- 15 -- -- -- -- -- -- See note 1 -- -- Pancaking Permitted? No No No No No Limited No No No No Yes Semi- Fuel Clause Renewal Frequency Annually Monthly Monthly Annually Quarterly Annually Tri-Annually Annually Annually -- Annually Notice of Intent Prior PSC Notice Required? Yes Yes Yes No Optional Yes Yes Yes Yes Yes No Notice Period (days) 60 Varies 28 N/A 45 30 45 30 60 30 N/A Case Components Partially Forecast Forecast Partially Forecast Test Year Historical Historical Historical Historical Historical Historical Projected Optional Optional Projected Optional Other Rates Effective Subject to Refund Yes No Yes Yes Yes Yes Yes Yes No No Yes Approx # of Months after Filing to 10 -- 6 8 Varies 9 6 6 5 9 2 or 7 implement rates subject to refund Note 1: No interim rates provided and rate cases must be filed no less than biennially; historical test year used. Regulatory framework inherently produces recovery and return lag.43

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