COLUMBUS, Ohio, Jan. 21, 1998 -- "Out of context" and "a misrepresentation of isolated numbers" characterize the recent report by the Northeast States for Coordinated Air Use Management (NESCAUM), said a spokesman for American Electric Power (NYSE: AEP).

The study linked wholesale electric competition with increased emissions from power plants by analyzing wholesale sales increases for only four companies. AEP was one of the companies.

AEP´s Manager of Environmental Strategy and Planning John McManus said, "The NESCAUM study provides a disservice to the public -- and to the industry -- by looking at generation and emission numbers out of context and suggesting trends when none may exist. Total electricity generation doesn´t increase just because one company may be selling and generating more. The energy needs of the public ultimately determine how much electricity is generated in a given year, so sales and generation increases by one company must be matched by decreased sales and generation by others."

McManus pointed out the importance of looking at the universe of power generation, as did the Federal Energy Regulatory Commission Environmental Impact Statement on its open access rule, released in 1996. The environmental impact statement concluded that wholesale electric competition may cause emissions to go up or to go down, but in either case in insignificant amounts, depending on how the market develops.

The NESCAUM report places too much emphasis on changes in generation and power markets over the course of two years without adequately looking at the underlying reasons for those changes, according to McManus. While the report does acknowledge the limitations of the analysis, those limitations are so great that the resulting conclusions have little, if any, value.

"The report, which looked at only a few companies, is a misrepresentation of isolated numbers, selected for their shock value and taken entirely out of context."

McManus also noted that the study ignores the fact that a significant number of power generating plants will be subject to increased emissions controls by the year 2000, in accordance with the Clean Air Act Amendments of 1990.

"Utility sulfur dioxide and nitrogen oxide emissions as a whole are down and will continue to trend downward," said McManus.

McManus indicated that restructuring efforts should continue unimpeded. "This report does not show that deregulation will increase emissions. Electric restructuring bills at the state or federal levels should not be linked with environmental legislation. Utilities are already stringently regulated in the environmental arena, and there´s no need to complicate restructuring efforts with the contentious task of drafting environmental legislation as well."

AEP, a global energy company, is one of the United States´ largest investor-owned utilities, providing energy to 2.9 million customers in Ohio, Indiana, Michigan, West Virginia, Virginia, Tennessee and Kentucky. AEP has holdings in the United States, the United Kingdom and China. Wholly owned subsidiaries provide power engineering, consulting and management services around the world. The company is based in Columbus, Ohio.