FORT WAYNE, June 2, 1999 — American Electric Power (NYSE: AEP) has reached a settlement agreement with the staff of the Michigan Public Service Commission (MPSC) in its Michigan power supply cost recovery (PSCR) cases. The agreement was submitted today to the MPSC for review and approval. “This is a fair compromise and a positive solution for our customers and AEP,” said John Sampson, AEP president for Michigan and Indiana. For customers, the agreement will: -- Reduce bills for all AEP customers. A typical residential customer in St. Joseph using 750 kwh per month will save 46 cents per month; in Three Rivers, 37 cents per month. -- Pass on additional rate reductions annually in an ongoing effort to synchronize rates for AEP’s Michigan customers. -- Virtually freeze rates for five years by limiting AEP’s ability to file for a rate adjustment, except in dire emergencies. -- Freeze power supply costs for five years at a level expected to occur when the Cook Plant returns to service. In the meantime, AEP will be allowed to: -- Amortize over the next five years any unrecovered power recover cost revenue deferred in 1997, 1998 and 1999. -- Defer and amortize non-fuel nuclear expenses over the next five years. -- Resolve all issues relating to the Cook Plant outage. “We’re pleased to bring this matter to a close” said Sampson. “The settlement allows us to avoid the time, expense and uncertainty of further litigation, and to focus our attention on safely returning the Cook Nuclear Plant to service as soon as reasonably possible.” AEP, a global energy company, is one of the United States' largest investor-owned utilities, providing energy to 3 million customers in Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West Virginia. AEP has holdings in the United States, the United Kingdom, China and Australia. Wholly owned subsidiaries provide power engineering, energy consulting and energy management services around the world. The company is based in Columbus, Ohio.