AEP completes sale of customer care operation serving Texas retail customers

COLUMBUS, Ohio, March 11, 2003 — American Electric Power (AEP) has completed the sale of Mutual Energy Service Company, LLC (MESC), the customer care operation created to manage retail customer accounts in Texas, to Alliance Data Systems, a provider of transaction, marketing and credit services.

In the transaction, which has a cash value of $30 million, ADS purchased the customer relationship and bill management operations that AEP established in 2001 to serve retail customers in Texas as well as the remainder of a contract that AEP has to provide back-office customer service for 810,000 retail customer accounts Centrica purchased from AEP in late December 2002. AEP will realize a gain of approximately $9 million from the sale.

“Sale of the customer care operation created to serve retail customers in the deregulated Texas market continues our exit of the retail energy business in Texas and refocuses our resources on our areas of strength — maximizing the value of our generation assets and efficiently operating our electricity transmission and distribution systems,” said Holly Koeppel, executive vice president – Energy Services.

The ADS transaction does not affect AEP’s ownership of its power plants in Texas or its transmission and distribution network that delivers electricity to customers. AEP also will continue to serve Texas customers with electric demand greater than one megawatt.

“The transaction will be seamless for customers since nothing will change from their perspective. The wires carrying electricity to the customers will still be owned and maintained by AEP. We will continue to be responsive to our customers’ needs for service connections and restoration after outages. The electricity supplier, price-to-beat rates and responsibilities also remain the same,” Koeppel said.

Additionally, MESC will continue to use Peace Energy(TM) software as its customer information system.
As part of the transaction, AEP has contracted with ADS to continue providing customer care services for approximately 20,000 AEP residential customer accounts in Texas. These accounts were previously served by MESC.

American Electric Power owns and operates more than 42,000 megawatts of generating capacity in the United States and select international markets and is the largest electricity generator in the U.S. AEP is also one of the largest electric utilities in the United States, with almost 5 million customers linked to AEP’s 11-state electricity transmission and distribution grid. The company is based in Columbus, Ohio.

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