FERC Order Affirms AEP and PJM October Integration

VALLEY FORGE -- - The Federal Energy Regulatory Commission (FERC) unanimously affirmed American Electric Power (AEP) and PJM Interconnection's planned October 1, 2004 integration date during the Commission's meeting in mid June. At this same meeting, the FERC also approved the settlement reached among PJM, AEP, the Kentucky Attorney General's office and Kentucky industrial customers as agreed upon by the Kentucky Public Service Commission.

In this action the FERC confirmed that under a federal law, the Commission may allow AEP to transfer its transmission facilities to PJM. Additionally, the FERC order aligns with action pending before the Commonwealth of Virginia State Corporation Commission, which is currently reviewing AEP's application to integrate into PJM.

"Through FERC's action, reliability will be strengthened and customers will gain from the benefits of competitive electricity markets," said Karl Pfirrmann, president - PJM Western Region. "We are also very appreciative of the Commission's approval of the stipulation submitted by the Kentucky PSC. PJM looks forward to continuing to work with the Commonwealth of Virginia and other states as RTOs continue to develop in those areas."

Through the integration, PJM will assume functional control of AEP and Dayton Power and Light's transmission system on October 1, 2004. The changeover will bring transmission and generation in AEP and Dayton's territory in Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West Virginia into PJM's integrated energy market and congestion management system.

"This planned integration, along with the recent successful addition of ComEd (Commonwealth Edison), will further demonstrate the benefits from large regional transmission organizations and the important relationship between reliability and markets," said Pfirrmann.

PJM Interconnection ensures the reliability of the high-voltage electric power system serving 35 million people in all or parts of Delaware, Illinois, Maryland, New Jersey, Ohio, Pennsylvania, Virginia, West Virginia and the District of Columbia. PJM coordinates and directs the operation of the region's transmission grid; administers a competitive wholesale electricity market, the world's largest; and plans regional transmission expansion improvements to maintain grid reliability and relieve congestion. The expected addition of several utilities to PJM will double its size and scope.