AEP acquires majority of land near Gavin Plant

COLUMBUS, Ohio, Sept. 24, 2002 — American Electric Power is acquiring the majority of the parcels of land in the southern Ohio village of Cheshire, the community adjacent to AEP’s Gen. James M. Gavin Power Plant.

The property acquisition does not affect the village of Cheshire’s status as a legal entity. Residents will include the occupants of the residential properties that owners elected not to sell to AEP and others who rent or lease houses to be owned by AEP. Most businesses located in the village are expected to remain. Other parcels not acquired by AEP include those owned by the village of Cheshire.

Attorneys representing many of the 221 residents of Cheshire approached AEP with an offer to acquire the majority of parcels within the village and a preliminary agreement was reached in April. AEP accepted agreements from the majority of residents. The agreements provide AEP with land that may be used for potential expansion of plant operations. Some of the residences acquired by the company may be used to house employees or contractors on temporary assignment at the plant.

“In the time since the April announcement, it became evident that we could preserve the community while still addressing both the plant’s need for land and the concerns of some of the residents,” said Bill Sigmon, AEP senior vice president – unregulated power generation. “We were able to identify specific parcels in Cheshire of immediate importance for plant operations, but other parcels that would only be utilized at a future date or don’t fit our plans will be evaluated for continued residential use.

“We recognized that some residents might desire to stay. We wanted to resolve this issue in the best interests of all involved.”

Discussions began after neighbors of the Gavin plant expressed concerns during operation of the new selective catalytic reduction (SCR) emissions control system in 2001. The SCR significantly reduces nitrogen oxide emissions from the plant to meet requirements of new environmental regulations. Operation of the SCR also brought a small increase of sulfur trioxide (SO3), which — in certain weather conditions — created a bluish haze at ground level. At no time during the plant’s operation did emissions in the plume exceed any health-based ambient air quality standards or permissible exposure limits established by federal or state regulations.

The SCR on the Gavin plant’s Unit 2 was operated this summer with approximately $7 million of additional equipment to mitigate the increased SO3 emissions.

“The Gavin plant operates with emission levels well within all health- based air quality standards and the facts show no long-term health effects related to the plant, but we understand the concerns of our neighbors and care about the welfare of the community,” Sigmon said. “We’re pleased that we could structure this agreement in a way to address the concerns while preserving the community and still acquiring land to meet our company’s needs.

“Once we were assured of receiving sufficient land for plant use and addressing the concerns of those who wanted to relocate, the fact that some individuals chose not to sell didn’t affect the importance of the deal to us,” Sigmon said.

Transfer of parcels sold to AEP will occur on a staggered basis because residents are scheduling closings at their convenience. Individual payments are based on an allocation agreement developed by the residents and their counsel. AEP did not negotiate with individual property owners.

American Electric Power is a multinational energy company with a balanced portfolio of energy assets. AEP, the United States’ largest electricity generator, owns and operates more than 42,000 megawatts of generating capacity in the U.S. and select international markets.

AEP is a wholesale energy marketer, ranking among North America’s top providers of wholesale power and natural gas with a growing wholesale presence in European markets. In addition to electricity generation, AEP owns and operates natural gas pipeline systems, natural gas storage, coal mines, and the fourth-largest inland barge company 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 wires. The company is based in Columbus, Ohio.

News releases and other information about AEP can be found on the World Wide Web at .

Source: American Electric Power

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