Chuck Zebula – SVP and Treasurer Mike Morris – Chairman, President and CEO Brian Tierney – EVP & CFO

Paul Patterson – Glenrock Associates Daniel Eggers – Credit Suisse Leslie Rich – Columbia Management Paul Ridzon – Keybanc Jonathan Arnold – Deutsche Bank Ali Agha – SunTrust Robinson Michael Lapides – Goldman Sachs Anna Stromberg – National Australia Daniele Seitz – Dudack Research Phyllis Gray – Dwight Asset Management David Frank – Catapult Anthony Crowdell – Jefferies

Ladies and gentlemen, thank you for standing by and welcome to the fourth quarter 2009 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded. I'd now like to turn the conference over to our host, Mr. Chuck Zebula. Please go ahead.

Thank you, Lola. Good morning and welcome to the 2009 fourth quarter earnings webcast of American Electric Power. Our earnings release and related financial information are available on our website aep.com. The presentation slides are also available on our website. Today, we will be making forward-looking statements during the call. There are many factors that may cause future results to differ materially from these statements. Please refer to the SEC filings for a discussion of the factors that may cause results to differ from management's forecasts. Joining me this morning are Mike Morris, our Chairman, President, and Chief Executive Officer; and Brian Tierney, our Chief Financial Officer. We will take your questions following their remarks. I will now turn the call over to Mike.

Thanks, Chuck and welcome to everyone on our fourth quarter 2009 call and a bit of a forecast on 2010. I know that you've already had a chance to read our press release and you've also of course had a chance to look at the slide presentation that Brian and I will go through. Let me try to add some color to a few of the bullet points that are on the very first slide in the package. It’s clear from our advantage point anyways that 009 was a very successful year, particularly when you think about the facilities that we looked at in the beginning of the year with Cook offline and an uncertain economic downturn and the potential impact that that could have on us as we looked at a very long 12-month cycle. As things unfolded during the year, however, we did see over quarter-to-quarter ongoing at least first dipping and then stabilizing and in fact toward the latter part of the year, tipping up and we were quite encouraged by that. So as you know, we have reported $2.97 a share, obviously in the upper end of the – upper end of the program that we put together last time we talked about moving our guidance in 2009 up from its original forecast number. So we are really pleased with that performance and I think the 20,148 people who work at American Electric Power Company did a great job in that regard. More important, I guess, looking at what we were faced coming out of 2008 and into 2009 with the incredible capital expenditures we had made over the last handful of years to see to it that we had adequate additions to our plants to continue to provide cost-effective electricity for our customers, but we realized the financial condition of the company, raising on average about $1.8 billion worth of equity, $1.6 billion [ph] in the equity issuance of course and almost $200 million by the drip as the year unfolded as well. But equally important was we really steadied the overall financial ratings and we continue to see at least that particular approach from most of the rating agencies and we hope to see an uptick in that regard early in 2010 so that we will be equally rated by all three of the principal agencies. Debt ratios in the low-50s, FFOs covering the investment-grade ratings that we think are well deserved. And I would argue that at least during my tenure and some of the longer-term members of our executive council telling during their terms as well, that we are in the strongest financial shape coming out of 2009 than we've ever been. The regulatory success continues. I know that Brian has talked to many of you about the diversification of our regulatory asset base. We have tried over a number of years to convince you that we understand the process and are relatively successful at it. Now, when we see some of the single jurisdiction utilities falling into unfortunate situations, it really does add comfort to know that we have a very diversified base from which to get rate – for a relief. A total of $725 million in calendar year 2009 added substantially to the earnings strength of the company and, I would argue, continue to serve our customers well as in most jurisdictions we continue to be, if not, the lowest among the lowest cost providers of electric service to those customers. As you know, over the last handful of years, we continued to move forward with fuel recovery applications and approvals in jurisdictions and coming out of 2009, particularly with the ESP that was approved here in Ohio, we are now active in each of our jurisdictions with year-to-year recovery of our fuel expenses. And that really will go to the benefit of our customers as it has to our shareholders over the last couple of years as prices continue to escalate because as we look at 2010, we think there will be a 10% or so reduction in the cost of coal as we continue to use that as a principal source of generation for us. I want to spend just a moment or two on the tracker line that we've got here. As you know, in the utility business particularly as costs continue to increase and capital continues to be deployed and refurbishment and upgrades and other activities go forward, it's important that you reduce regulatory lag. We have had that over the last two or three years as one of our goals and in each of the seven principal operating organizations, we have implemented something north of 100 trackers, automatic adjusters for increases in fees being charged by RTOs, automatic increases for energy efficiency, for demand-site reductions, for green energy additions, some for vegetation management, all of those continue to reduce the regulatory lag impact that a more classic regulated utility like American Electric Power would feel, but for the implementation of these. Typically, what it does for our customer is it smoothes out the impact of rate activity as you go forward. One of the great benefits of that in a handful of jurisdictions when you think of December of 2009 when we had a significant storm come through our eastern footprint in any of our jurisdictions, we have the ability to set those funds aside and collect them on a relatively current basis as we go. So again, something that we set out to do a handful of years ago and we have been extremely successful in getting those things done. I think it works well for the regulator. We know that it worked very well for the investor. And we believe that at the end of the day, rather than spiky electric rates, it works well for our customers. American Electric Power, for its now 104 years of existence, has been the technology leader in utility business and I would argue, in 2009 we continued to shine that reputation. The carbon capture and storage activities that we began a handful of years ago as a dedication to realizing to keep our coal fleet active, we would have to take those steps, nothing short of phenomenal. The performance of our team at the Mountaineer station, the dedication of our partners from around the world and others who had witnessed the activity of the first integrated carbon capture and storage project at an electric plant anywhere in the world were deeply and I would argue duly impressed with the performance that we saw. We are capturing and storing and as you know, we've been granted $338 million by the Department of Energy to continue moving forward with what we call taking that project to scale. We will continue to attract partners, we would hope, from around the world and we will be pleased with the ultimate activity that continues to go forward there. The next bullet is probably something that I am as proud of anything that's ever happened in my career. As you know, in September of 2008, we had an absolutely unexpected, uncontrolled and total mishap at our Cook Unit 1 as turbine vibrations shook that plant to its basic foundation. There were many who thought that the Unit 1 would never come back to service and we would be less of a nuclear player than we are today. The men and women at Cook didn’t believe it and the men and women who manage this company didn’t believe it either. And as we said and as we promised, during calendar year 2009, although it took us until December, we brought Unit 1 back to life and today, we are finding that although we forecasted about a $70 megawatt de-rate based on not having the last two rows of blade in the repaired turbines, we are finding that it's only about a 30 megawatt de-rate with the facility. And I think that most of you know that our plants are doing refuelage [ph] in 2011. We will install brand-new rotors in all the – both of the turbine and both of the generators, high and low pressures. So we feel comfortable about that. Ultra-supercritical technology deployed only at the Turk station in Arkansas. The Turk station construction continues at pace. We, last week or two, received a final approval from the Arkansas Department of Air Quality. We as instituting their – their belief that the air permit issued should be reaffirmed and they did that and we are pleased with that. That's not to say that those would not like to see the Turk plant go forward might appeal again. But we feel comfortable with where we are. So all in all, when we look at 2009, we followed a very successful year based on the headwinds that we faced. For 2010, we would argue that a steady pace going forward will be the key word for American Electric Power. You know that our earnings guidance has been reaffirmed by the press release that was already issued, $2.80 to $3.20. We would hope that we are able to perform in the middle of that range and we feel comfortable that we have every chance to do that. I would argue that the team has done an excellent job in managing year-over-year O&M expenses at a company as diverse and as large and intricate as American Electric Power, it’s difficult to manage an O&M account anything short of about $4 billion a year, but we feel comfortable that we have done a good job at scrubbing down every one of those dollars to ensure that they are in fact invested on behalf of our customers and obviously, our shareholders. Rate cases this year looks like a very small stack when compared to our history over the last handful of years. A total of about $320 million to be recovered over a series of jurisdictions; about $160 million of that already in hand by rates that were approved some years ago that we will implement as well through 2010. To say that we will have 100 years of dividend with the dividend that was approved by the Board of Directors yesterday at our Strategic Planning Meeting is nothing short of phenomenal. We will be joining some of you, I would hope, in New Year sometime in the early summer to have a chance to ring the bell, recognizing 400 quarters of successful dividends granted to our shareholders. When you look back at our 2009 performance, those shareholders saw a robust 9.4% return on their overall investment when you consider the share price escalation as well as the dividends granted in 2009. And if they are smart enough to continue to reinvest those dividends, that number ticks up into the double digits. And when you look at 2009 financial performance, that surely tells me that our retail base ought to be larger than it is and I know that our Investor Relations organization is working diligently on that as well. Issues galore from our friends in Washington, the climate change discussions continue. I think with a truly open eye, there is only one way to characterize Copenhagen. It was a massive failure. That doesn't mean to say that the United States ought to not go forward. As you know, we are strong proponents of Waxman-Markey. We believe that it can and should be enhanced in the Senate. Many would argue after the Massachusetts election, that the opportunity for a climate change legislation in 2010 is dead. It's difficult to foresee that it might not be, but last night, of course, the President put his shoulder back to the wheel. Senators Graham and Kerry and Lieberman continue to work diligently toward the potential of a program that would work to everyone's advantage and we will continue to be deeply involved in those activities. For our customers and for our investors, what critically – what is critically important is that there is an allocation of credits, not unlike the occurrence that we all experienced during the Clean Air Act implementation. The notion of allocating or auctioning and then dividending [ph] back revenues to customers across the horizon has some political appeal to it, but it also has some political challenge associated with it. I can't imagine refunding to some of the billionaires along the way, monies that were collected from the people of Appalachian Power. I don't imagine that politically that ultimately has much of a chance for survival, but there are those who are championing that point. We would rather see the continuation of a cap-and-trade program that's predicated on the basis of the Edison Electric Institute formula. We think that's the way to go. There are some clamoring of late for a utility-only undertaking. I can't think of anything that would be more illogical than that. The utility impact on the overall U.S. carbon footprint is significant, but not dominant and the utility impact on the world global warming impact is insignificant in any calculation. And saddling up all of our customers in the U.S. economy where the utility-only bill has almost no positive effect on the climate, yet a negative effect on an ever-sensitive economy as we go forward. There is energy policy afoot though for renewable standards, for transmission standards. We think one could easily couple with that the deployment of the technology that we are doing at our Mountaineer station on a much wider basis would be a great place for the United States to go. It will give President Obama a voice in the international dialog that will continue and culminate with the meeting in Mexico in 2010 and would allow the United States to find its way back to the manufacturing base for the production of that technology and hard equipment that goes with it. When we talk about energy jobs, just think in terms of the full-scale build-out of Mountaineer station, it would employ about 1,000 men and women for over 48 months, every one of those people making somewhere between $50,000 to $125,000 a year depending on overtime hours and their skill sets going into it. So although there are jobs associated with green energy, there are many more high-paying jobs for the base worker in the United States associated with retrofitting the coal fleet and we will continue to push for those issues as we go forward. Our growth opportunities are kind of interesting. As you know, we continually believe and we will continue to advocate for the transmission assets to be build out more robustly throughout the entire United States. Rationalizing the number of base load generation stations that need to be built going forward can be handled by more a robust transmission grid, allowing the renewable standards that everyone was so eager to bring to the floor to truly get to market would also be enhanced by a more strong-based federal transmission program. You are well aware of our joint ventures, you are well aware of our intent to form the TransCo, some of them moving apace, some of them slower than we would like. The TransCo applications have been filed, interventions have been logged. It's probably right for a discussion and settlement and we feel comfortable about the way that that's going as well. Rate base opportunities, I've already spoken to the rate cases that will be filed or many other rate base opportunities. I would argue that American Electric Power, because of the diverse nature and the scale of the footprint, if Brian had more capital available and the tolerance of our capital structure would be there, we could continue to invest capital not only for the benefit of our customers, but our shareholders as well. We look at 2010 with a bit of a upbeat tick as I said. At the end of the fourth quarter, our industrial sales showed some strength. Brian will take you through a slide that very much points out the major impact in the industrial downtick 2009 versus 2008, had everything to do with our metal melting customers. We are comfortable when we read about steel demand growing across the world. It's clear that the China steel manufacturing base isn’t large enough to handle the demand that they demand. As you know, many of our customers are principal exporters in the metal business in particular and we think that that all bodes well for us. So we are comfortable with our guidance, we are happy about our success in '09 and Brian will give you much more detail on the performance that we had during that year. Brian?

Thank you, Mike and good morning, everybody. What I'm going to do is take us through quarter-on-quarter and annual reconciliations. We will look at some trends and key earning drivers for the quarter and the year and we'll take a review of some of the key assumptions in our 2010 earnings guidance. If you look at page four, you will notice that for the fourth quarter of 2009, the company made $238 million versus $237 million in the fourth quarter of 2008. I'll take you through the earnings per share reconciliations from '08 to '09. In '08, the company made $0.59 a share. Impacting that positively for the fourth quarter of 2009 was rate relief which accounted for $178 million or $0.28 a share. That reflects the diversity of our jurisdictions where that – those rate increases came from and it's a tribute to the men and women who are working at our operating companies. Enhancing those relationships and working with the regulators and the interveners to make sure that we are putting that capital to work and getting timely recovery of our O&M. Load contraction accounted for $70 million for the quarter or $0.11 a share. As Mike said that was mostly associated with the eastern industrials and principally, some of the primary metal smelters. On the O&M side, 2009 was a difference of $73 million or $0.12 versus the year prior. And you remember that we had those storms principally in the Appalachian Power service territory that were a significant expense in the fourth quarter in addition to some plant outages that we had. The share count effect resulted in $0.09 difference for the quarter, reflecting 478 million shares outstanding versus 404 million in the fourth quarter of 2008. Other was $0.02 and that brings the reconciliation down to $0.50 per share for the $238 million for the fourth quarter of 2009. It's too important to note, and we'll talk about this in a moment, and of off-system sales for the quarter was essentially flat to the prior-year quarter and that's the first time that off-system sales have approached flat to positive. They've been significantly negative throughout the year as we went through and we think that trend was positive for the fourth quarter. Let's turn to slide five and go to the year-to-date reconciliations. It's important to note that for the year, the company made $1.362 billion in 2009 versus $1.301 billion in 2008. Again, we'll go through some of the major reconciling items on an earnings per share basis. Year-to-date 2008 was actually $3.24 a share. Rate relief to the year for $725 million as Mike mentioned or fully $1.17 per share, again coming from the breadth of our operating companies. Load contraction was a result of $213 million difference or $0.34 a share, again, primarily associated with the east industrial customers and we'll talk more about that in detail a little bit later. Off-system sales net of sharing was negative $333 million or $0.54 a share and that reflected decreased demand and pricing in the wholesale electricity markets, also associated with the downturn in the economy. O&M for the year was a $44 million difference or $0.07 a share and most of that was due to the storm damage that we mentioned earlier. For the year, the share count effect was $0.42 a share, reflecting 459 million shares outstanding 402 million shares outstanding for the prior year. That brings our year-to-date earnings, as Mike identified earlier in the call, to $2.97 per share. The fact that the company invested its 2008 gross earnings level in a year with the economic price and weather headwinds is a remarkable result. We'll move to page six and start looking at some of the key earnings drivers for the quarter, year, and forecasted year by looking at retail load as it's broken down by segment. If you look in the top left-hand part of slide six, you will see that residential load for the quarter was down 1.4%, bringing the year-to-date down seven-tenths of a percent for the year. It's important to note that in the fourth quarter of 2008, our residential load was actually up 4.4%. So that negative 1.4% on the fourth quarter of '09 was off a pretty strong base the year prior. When – as we look forward to 2010, we are anticipating that residential load will rebound from its '09 level by about 1%. The top right-hand part of the column, we'll take a look at the slide – we will take a look at the commercial loads, which were down only five-tenths of a percent versus the prior year in the fourth quarter of '09, bringing the year-to-date number down eight-tenths of a percent. For 2010, we are looking for a recovery of 2.4% versus the '09 numbers. The bottom left-hand part of the slide shows what happened to industrial load throughout the year and that's really where we had our volume fall-offs versus the other segments of retail load. Industrial load for the fourth quarter was down 11.1% versus the year prior, bringing its year-to-date number to down 15.6%. It's important to note that we saw some slight improvement in the fourth quarter of 2009 versus the third quarter of 2009. It’s in this load category that we expect to see our largest recovery because it's where we saw our largest fall-off for the year, anticipated to improve 5.3% versus 2009. We bring it all together in the bottom right-hand part of the slide where we show total retail loads for the fourth quarter down 4.6%, bringing the year-to-date number down to negative 6.2%. For 2010 in aggregate, we are anticipating that these loads will recover just a modest 1.6% as we go through the year. So we think that our retail load forecasts aren’t overly optimistic or overly pessimistic as we go into 2010, but really marks something that we believe shoots the mark right down the middle of the fairway. If we move to page seven, we'll take a look at industrial sales volumes and what you are looking at in this slide is the five major industrial sectors that accounted for 59% of the industrial load in the fourth quarter. The top line in the graph, as Mike talked about, is primary metals and you will see a significant decline between the third quarter of 2008 and the second quarter of 2009. That was primarily a result of two large primary metals companies in the east part of our system. One of those is in a temporary shutdown and the other has curtailed load and they are obviously looking for improved metals pricing to bring those loads in those factories back on line. The remaining four large industrial sectors that are on the slide were not as nearly as severely impacted by the recession, most ending the year on an uptick. As we talked to the folks that we have in the field, we've heard from a number of them that the retail industrial customers are having their order books fill up. One of them, a significant load for us, saying that their order book was full throughout the next two months. We are encouraged by some those signs. If you turn to page eight, we'll take a look at east off-system sales, which account for the preponderance of our off-system sales, another key earnings driver for us. On the left-hand side of the slide you will see some fourth quarter comparisons that show that both the fourth quarter of 2008 and '09 were down significantly versus the pre-recession 2007 levels. Those are reflective of the downturn in prices and demand for wholesale electricity during that period. What I think many of you will be more interested in is on the right-hand side of page eight in terms of what do we think it means for 2010. You will see that the full year 2009 volumes and prices were down significantly versus 2008, but as we look at forward prices, we think that there will be a – we are seeing forward prices, a modest uptick in prices being about a 17% increase and given how stat falls in the eastern interconnect, that modest increase in prices can result in a dramatic increase in volumes for AEP and we are forecasting volumes to increase about 65%. AEP stack really is in an inflection point in the mid-30s to mid-40s in terms of pricing and once we reach that inflection point, so much more of our fleet becomes in the money. So we are also modestly encouraged by what we see in the wholesale markets. If you turn to page nine, we will look at some additional earnings drivers for 2010. On the left, Mike alluded to where we were in terms of O&M assumptions. It’s important to note that for 2010, we are anticipating only a $23 million increase over 2009 O&M levels. That includes $80 million of increase on employees' salaries and benefits, as well as some operating expenses due to some additional equipment that we brought online during the year 2009 and it will be fully reflected in our 2010 numbers. A net $23 million increase, over a $3.5 billion to $3.6 billion O&M budget shows that as a company we are being very disciplined in terms of our O&M expenditures. The last point that Mike referred to was the rate relief assumptions. Remembering that we had a $725 million increase in rates in 2009, we are only looking and only reflecting in our forecast for 2010 this $320 million of increase net of trackers. A $167 million of that or about 50% has been secured to date and the amount that's been secured and the amount that we are still to bring in throughout the year once again are spread across the breadth of our system, reflecting that diversity of rate experience that we have so that we are not depending on just one rate case to bring in the remaining amount that's out there. So to summarize, we think our load trends are encouraging. We know that wholesale prices are improving and we look to take advantage of that in 2010, the company is being disciplined about out capital and O&M spending, and our rate relief efforts are on track. As a company, we are prepared to take advantage of a recovering economy. With that, I’ll turn it over to Chuck Zebula.

Thank you, Brian. This concludes our formal remarks. And Lola, we are ready to take questions.

Certainly. (Operator Instructions). And first, we'll go to the line of Paul Patterson with Glenrock Associates. Please go ahead. Paul Patterson – Glenrock Associates: Good morning. Can you hear me?

Yes, sure, Paul. Go ahead. Paul Patterson – Glenrock Associates: The tax rate seems a little bit lower to utilities for the fourth quarter. Could you elaborate a little bit on that and what your expectation for 2010 is?

Yes, Paul. This is Brian, I'll take that. Our lower tax rate in the fourth quarter of 2009 was reflective of a couple of things. One was bonus tax depreciation, as well as some federal and state income tax true-ups that we realized in the fourth quarter of 2009 of the year. We are anticipating that our effective tax rate will be much closer to the statutory rate in 2010 and we've put a number in the guidance that's in 32% to 34% range. Paul Patterson – Glenrock Associates: Okay. And then there seems to be some talk of a potential for a – for legislation in Virginia that seems to be associated with Appalachian Power. Could you give us an idea about what might be going on there and what your expectation is or what you are feeling in terms of what might be the – what might be happening there I guess?

Yes, Paul. I think that there is an obvious pushback from the implementation of the rate filings that were made at Appalachia in Virginia. We are in dialog with the legislature and we will continue to do that. There is potential for some kind of a resolution of this matter I think. Again, a legislation earmarked at a single utility when we are among the middle of the pack and cost of electricity in Virginia would be ill-advised, but I surely am not going to run from the notion that there is potential for that. Our team has been in conversation, we will continue to be in conversations with the principal committees inside of the Virginia legislature to see to it that we have an opportunity to understand the concern. The Virginia restructuring law of a couple of years past allowed for certain things to go forward. I would – it's clear that we've done nothing outside of the box in that sense. But having said that, I appreciate that there has been an ever-escalating impact on the cost of electricity for our financially challenged customers in the Appalachian region of Virginia that we serve, not unlike the rest of the country. To preach to you all would be a bit of an overkill, but everyone who wants green power or everyone who wants clean air, or everyone who want smart meters, everyone who wants everything needs to realize that the cost of basic electricity service will continue to increase. Obviously, I would argue way below the value of the product, but nonetheless I appreciate the pressure. And we will be constantly in the dialogs. All the – the commission has the authority to hear the case on a timeline that's predetermined; they will do that and implement whatever rate increases they find to be totally justified. And that will lead to refunds to the customers if that number is below the implemented rate increase that was taken in full compliance with the law toward the latter part of December in 2009. Paul Patterson – Glenrock Associates: Okay. Thanks a lot.

Sure.

Thank you. And next, we'll go to the line of Daniel Eggers with Credit Suisse. Please go ahead. Daniel Eggers – Credit Suisse: Hi, good morning.

Good morning, Dan. Daniel Eggers – Credit Suisse: Mike, can you just talk a little bit more about the rate of expectation for economic recovery in your service territories? Your comments in the release said December showed a little uptick, the full-year numbers are not all that ambitious as far as recovery is concerned. Is it kind of a flat recovery or is it back-end loaded from your perspective and what do you think you need to see the tick-up and get more enthusiastic about recovery at this point?

Well, I think there are two things as you know, Dan, that really, really drives the overall impact of economic activity at American Electric Power. If you look at 2010, the residential load was really only off 1%, commercial load was only off 1% and when you think about the number of people that went out of business, our commercial account actually went up year-over-year in 2009 versus 2008. So we stay relatively encouraged by where those two numbers are and we would expect that as people hopefully pursuant to the President's state of the union last night, begin to be more comfortable that their job is either a bit more secure or that they may well be able to land a job in the not-too-distant future. We think residential sales will grow a little bit as Brian suggested in his granular approach to the overall retail sales. The two things that matter even more so, however, for economic recovery for us have to do with the industrials that Brian spoke to, but also the off-system sales, which have ticked up substantially, particularly with gas cost up. As you know, we had a double-barrel hit in 2009 for off-system sales, not only the economic downturn throughout the footprint that our power plants can reach economically, but with natural gas trending at $3.99 for the calendar year, a lot of our coal facilities that would most typically run at $0.028 a kilowatt hour for gas, some of them were on – not need to, did not run. At $5.50 gas, which is what the 2010 script looks like, we feel pretty good about that. So for the basic question about retail load, we feel comfortable that we are in a reasonable zone. If we continue to see the economy pick up to Brian's closing comment, we clearly are situated very, very well to take full advantage of that. And we just haven't seen anything beyond the order books that Brian spoke to about some of our large industrials. LMEs would have to go up for some of the other metals before the aluminum guys get back into serious production, but you probably saw the reports that couple of the Russian steel manufacturers and Indian steel manufacturers' facilities here in the country are forecasting uptick production. So we are encouraged for that. Ford Motors report this morning of their activity quarter-to-quarter and well, their forecast for 2010 is encouraging, not that we are a big Ford supplier, but the raw materials that go into the car production are always inside our service territory one way, shape or form. So we feel comfortable about our forecast, but it surely has upside potential. I would argue much more upside potential than downside. Daniel Eggers – Credit Suisse: And then Mike, I guess, thinking about the outlook for CapEx right now, you are holding pretty well to the lower expectations you set last spring. What would cause the run rate to change from $2 billion maybe towards that $3.5 billion to $4 billion we were seeing a couple of years ago and how do you see yourself factoring in more capital as we look forward?

Well, I think we've got a pretty good plan for 2010 and we will stay with that discipline for this year. We think that that's exactly the right amount of money to put to work. And if we look at 2011, it’s on pretty much the same plane, although it could step up. And again, what you have to see is the sales volumes and cash flow improve so that we could continue to strive toward a more balanced end of cash – free cash flow if you will. I – again, the plan that we have put together for 2010 shows us being positive cash flow for the first time in memory and maybe for the first time ever. But nonetheless, we are kind of tickled by that whole approach. But the beauty of the AEP system is that we can react in a very constructive way throughout, particularly in those jurisdictions that have trackers. As you know, we have – in the TransCo formation and ETT and the partnerships, we have taken a great deal of capital requirements off of the more normal capital raising requirements of the parent. We just had a very, very solid financing opportunity in the debt markets for our transmission activities and we are encouraged by the availability of capital. But there still requires a serious discipline on the balance sheet and we will continue to keep a sharp eye on that. Low-50s is not where we ought to be as far as debt equity, but mid-to-higher 50s is still a comfortable place for us to be. Daniel Eggers – Credit Suisse: Okay. Thank you very much.

Yes, you bet.

Thank you. And next, we'll go to the line of Leslie Rich of Columbia Management. Please go ahead.

Hi, Leslie. Leslie Rich – Columbia Management: Hi, Mike. I wondered if you could talk a bit about transmission and the delay of path [ph] and sort of your longer-term expectations there and then also, if you could clarify one of your comments in the prepared remarks about some of the filings that you said were right for settlement and I just wasn't sure which project you were referring to?

Yes, sure. So transmission is clearly an Achilles' heel to everybody's plan for rationalizing the generation fleet for reducing the carbon footprint and for enhancing the green jobs that are associated with sun and wind as we go forward. So eventually, we'll get around to the kind of legislation enabling – out of Washington that will allow for all of that to happen. As to our projects, the SPP projects are moving along nicely. The CREZ project in Texas with ETT are moving along rapidly. The PJM project in particular path is moving along much more slowly than it ought to be. There are many people who just simply don't want the project to be built and they continue to intervene in any one of a number of jurisdictions, not with an eye toward, "Is this a good idea or bad idea," just simply that they don't want to see it built. The PJM continues to follow their own equations and their demand line has gone from 2012 to 2014, maybe even beyond that. We continue to move forward with our planning, with our dialog with folks along the way rights of way with our investments and the engineering design and rights of way acquisition and many of the things that as you know are already recoverable through the formula. So we are discouraged by the timeline, but we surely are not discouraged by the need nor are we discouraged that at the end of the day these kinds of facilities will be built and that the American Electric Power will continue to have an opportunity to make some of those significant investments that we talked to you all about over a period of years. It’s unfortunate that has been a period of years. I started out with the hope that we could begin and finish a project inside of a four or five-year timeline compared to our 18-year timeline for the Jacksons Ferry project. I still believe that we will be inside of a reasonable period of time, but clearly longer than I would like. On the filing settlement, it really had to do with the application that we made to create the TransCo. Many people have intervened. Only a handful of them have intervened in a negative way and we think that that's going to allow for an opportunity as most FERC filings do for meeting and discussing the issue and maybe coming to a reason, resolution so that we can move forward and build the requirements that need to be build inside of our traditional footprint, but do them in a more rapid way and allow for better balance sheet opportunities at the operating companies by taking those financing and capital requirements to the TransCo rather than to the operating distribution utility. Leslie Rich – Columbia Management: Okay, great. Thank you.

Yes, you bet. Thanks, Leslie.

And next, we'll go to the line of Paul Ridzon with Keybanc. Please go ahead. Paul Ridzon – Keybanc: Good morning. Can you hear me?

We can hear you fine, Paul. Paul Ridzon – Keybanc: I missed the first part of the call. So I apologize, but is there anything – ?

Everything is going really, really well, if you missed it. Paul Ridzon – Keybanc: It sounds like it from what I heard. But any chance that some of the storm costs could get deferral treatment or has that been resolved in all of the jurisdictions?

It's – Paul, this is Brian. It's – we deferred a portion of those costs and we've had to set aside and expense another portion of those costs, but we fully expect overall to be able to get recovery of those storm expenses, whether it's the normal rate cases. We are going back to the jurisdictions and trying to see if we can make applications and get deferrals for those costs before the next rate case.

And I would only add to that, Paul, that the regulatory compact that you have all heard me speak to many, many times before remains very strong in the realization that there is nothing more important to the politicals or the regulators or quite honestly, us and the men and women in the field than getting the lights back on as rapidly as possible. When we bring crews in from all over the country, ultimately they have to be compensated for the travel time and the time that they spend putting the lights back on and what we have found and what most utilities have found across the country is a very solid opportunity at the regulatory arena to recover those dollars, either as you go or as Brian suggest, after the effect in the base rate case or some other recovery filing. You might remember that Kentucky was particularly hard-hit in very early 2009. All of the Kentucky utilities had an opportunity to recover their costs including ours and we think that's a healthy way to go about it because what we really need to do for safety and for security and many other reasons is get the lights back on as fast as we can, and we'll take care of the recovery of the costs of that as we go forward. Our 11 jurisdictions have all been very good about that and quite honestly, in the Conterminous 48 anyways, almost all jurisdictions have been good about that. Paul Ridzon – Keybanc: Can you give an update on the latest developments at seat [ph], if any?

Yes, the – we continue to be in dialog with folks here in Ohio about that activity. The Commission has put out a notice that they are going to address that in one of their early February meetings. We expect that it may be comments on the staff recommendations, but more importantly, I think it will mostly procedural on the schedule, what needs to be filed, what timelines they need to be filed. We feel, as I think all of the analytical community did, that the staff positions were interesting. They were complex, but at the end of the day, as we've read them, they intended to fully implement the law and be respectful of the idea that earnings needed to be substantially in excess before you would go to a redeployment of those dollars collected in some other time zone for those dollars being actually put to work on behalf of the customers in the adjusted time zone. So we will watch, we will wait, we will file all the needs to be filed. But again, that's one that may lend itself to the opportunity to settle. We are not much of a settling party here in Ohio because there are some members of the Ohio rate process that typically would rather take it to litigation than the settlement. This is one that maybe right for that approach and we are always willing to do that. Paul Ridzon – Keybanc: Thank you. And then just lastly, what you are seeing as far as gaining load in other peoples' footprints and kind of net it against what you might be losing?

The losing is de minimis. It’s maybe 300,000 or 400,000 here and there, nothing particularly worrisome to us. Customers leave for all kinds of reasons. Frequently, the margins are very, very slight. But I would imagine, over the years we have probably angered enough folks that they would just soon be served by almost anyone other than us. And as you know, we have put in an application here in Ohio to gain our own hunting license and once granted, we will get to safari out on the highway and see what happens. Paul Ridzon – Keybanc: Okay, thank you.

And next, we'll go to the line of Jonathan Arnold with Deutsche Bank. Please go ahead. Jonathan Arnold – Deutsche Bank: Good morning.

Good morning. Jonathan Arnold – Deutsche Bank: Good morning. My question is on the marketing trading line within off-system sales where we had a much better 2009 than 2008. What kind of assumption around that piece of it have you made going into 2010 and baked into the guidance lines?

Yes, this is Brian. That – significant component of what happened in the fourth quarter was some of the trading and marketing activity as well as some of the auction activity that we've been able to participate in across the eastern part of the United States. We generally don't break out what's trading and what's auctioning – auction related activity, but we are going to continue to participate in that. We have more historical looking numbers going forward in terms of what's in the forecast and we know what some of those dollars are going to come in be. But there is always migration and other issues and other issues associated with some of that load. So we don't want to over-estimate what's in those numbers as well. So really probably a return in terms of auction activity, the more numbers in the trading activity. We are hoping we will be able to improve as wholesale prices improve and we see some volatility to the upside of prices rather than some of the volatility that we've seen over 2009 to the downside of prices.

Jonathan, I apologize for the small gap between you announcing your name and asking a question. Brian was helping me get the right zeros on my customer loss. When I said I was de minimis to the question Paul had asked, I guess I inadvertently said 300,000 customers for a 5.2 million. That may not seem like many, it's really been on the order of 300,000 or so. So we apologize for the gap when you announced your name, but Brian was trying to pull himself off the floor and correct my mistake. Jonathan Arnold – Deutsche Bank: We were – actually, that was going to our second question.

Well, good. Very kind of you to help me get out of – foot out of my mouth. Jonathan Arnold – Deutsche Bank: Thank you.

And next, we'll go to the line of Ali Agha with SunTrust Robinson. Please go ahead. Ali Agha – SunTrust Robinson: Thank you. Good morning.

Good morning, Ali. Ali Agha – SunTrust Robinson: The assumptions that you have for the 2010 contribution from rate increases, you've got a couple different states with rate cases, et cetera. Could you remind us again which of those – which one or two of those would be the most important ones and where you are in the process there?

Well, clearly, the Virginia case is among the larger ones and we already talked a bit about that to the questions that Paul had asked at the outset. And the SWEPCO, Texas is a relatively large case as well. We've already had some early additional 2010 success in the rate arena. So we will continue to push forward. It – what I don't want to do and it's easy to do when you think of the successes and the size of the rate relief that we've needed over the last handful of years, to think that in essence you need to tackle about $150 million to $160 million sounds like a small run, but to the question that was asked about Virginia before, customers are very concerned in this economic time of any increase in any of their costs. But just – again so you get a flavor for this, even with the filings that were made in the interim rates that are currently in place in Virginia, a customer who uses 500 KWH a month, which is probably more of your fixed-income retired people, pay about $60 to $65 a month for their total electric bill. If you are 1,000 kilowatt hours a month, which is a more typical customer, you pay about $115 to $120 a month. So I'm not trying to make light of that, but we are seeing, as we would all expect, as the cost of electricity continues to increase customer pushed back in that sense. Ali Agha – SunTrust Robinson: And one other question. Going back to the '09 results, when we look at the detailed breakdown that you all gave us, the line item that you are calling parent company and other, which is a bonus line item, that – the loss there came in much lower than what you have been budgeting, even through the nine months. What kind of caused that to happen and any reason why you kept the parent number to be as high as you have?

That's primarily driven by two numbers. This is Brian again. And those numbers are the generation and marketing activity and our river transportation business. And as we went through the year, particularly in river transportation, we saw that volumes in spot rates for free continue to be severely depressed and that dragged those numbers down for 2009. On the generation and marketing side, we just had really some exceptional marketing activity in 2008, particularly in the fourth quarter that wasn't repeated in the fourth quarter of 2009, also dragging down the generation and marketing side. We are anticipating, as the economy would recover, some recovery in the river transportation business in 2010 and we of course are watching very closely what opportunities are maybe in the generation and marketing side as they go about their business of selling primarily to munis and corps in the Texas region.

I must admit, Ali. I was quite impressed by the presence – the desire to see the exports go to a doubling in the near-term. Our river operations, not only as you know haul coal for the house account, but also are very, very active on the entire river system in the middle of the country, which is one of the principal routes of exports. So I hope to be successful in that and many other of the endeavors, not all of the endeavors. Ali Agha – SunTrust Robinson: And last question. Brian, the line item right below that, the parent and other ongoing earnings?

Yes. Ali Agha – SunTrust Robinson: Came in at a negative 47 for the year. You had budgeted that to be negative 64 for the year.

Yes. Ali Agha – SunTrust Robinson: What caused that to swing that significantly?

A lot of that has been interest expenses and we were just able to manage that a little bit better as we went through the year than what we thought. As we look about having to refinance some of the debt that we have on our system, we anticipate that that will increase and those expenses will go back up in 2010 a bit.

And I think if you – as you look at the debt issuances throughout the year, Ali, the cost of debt capital went down substantially as the year progressed and the banks got more comfortable and funds began to flow more freely, probably 7% north in the first quarter and 5% or less in the fourth quarter. So this was a following of the availability of credit over the year. Ali Agha – SunTrust Robinson: I know. Thank you.

Yes.

And next, we'll go to the line of Michael Lapides with Goldman Sachs. Please go ahead. Michael Lapides – Goldman Sachs: Yes. Hi, Mike. Just kind of a high level question. When you look out across all of the commissions that regulate your businesses, can you talk about which ones are having the greatest amount of turnover in terms of who the actual commissioners are over the next 12 months and what kind of directional change, if any, you can foresee out of those specific commissions where turnover might be greater?

Michael, that’s a really, really interesting question to expect that of you and your colleagues on the phone. There is no big wholesale change in any of the jurisdictions that we are looking at. Pretty – and as you know, some of them are elected. One of the commissioners in Oklahoma is running for the United States House of Representatives. If he were to be successful in that regard, Commissioner Cloud will become Congressperson Cloud rather than Commissioner and the Oklahoma process is pretty straightforward. The Governor would appoint someone and then ultimately they would have to be in election to fill that seat. We feel comfortable about the way that that would go. We are in very decent shape in Oklahoma, PSO is held in high regard by the Commission. And in all of our other jurisdictions, we are also in pretty steady shape. We obviously have one opening in Ohio. The Governor already has a list of folks who are being interviewed. There is a process in Ohio, there are some very good names on that list. In fact, I think every name on that list is representative of balanced thinking. So if the backdrop of the question is, is there anything going on like at least some would argue has happened in Florida, we don't see that. We feel very comfortable about where we are here. Michael Lapides – Goldman Sachs: Got it. Okay. Thank you, Michael.

Yes, you bet, Michael. Thank you.

And next, we'll go to the line of Anna Stromberg with National Australia. Please go ahead. Anna Stromberg – National Australia: Hi, how are you? Thanks for taking the question.

Good day. Anna Stromberg – National Australia: Hi. I missed the first half of the call and I was just wondering looking at the presentation, you said – you mentioned you were going to just give an update on Turk 1 and I wondered if you can repeat it.

Yes. The Turk plant continues to go on a pace, we are on schedule according to our view and clearly, well within the budget that we set up for the construction of the plant. The Corps of Engineers issued a very important permit to us in December of 2009 so that we are back in full compliance with the core requirements and just two weeks ago, the air permit which was on appeal to the Arkansas air quality organization received a seven-one supporting vote. So regulatorily, everything that can be done has been done. As you know, the certificate of convenience and necessity issued by the Arkansas Commission remains in front of the Arkansas Supreme Court, but we – although we would like that to go the right way because we are convinced that the Arkansas Public Service Commission issued their order fully in compliance with years and years of application of the enabling legislation in Arkansas. We hope that they – Supreme Court sees it that way. Even if they didn't, they at best might remand it to the Commission for additional consideration of issuing the CCNs as a single entity rather than doing the plant and then the transmission, we would expect it to come to the same result and we would continue to build during that period of time. The people who have petitioned the Supreme Court have asked that the construction be stopped and of course that has been rejected. So we feel very comfortable about where we are going and we are eager to bring ultra-supercritical to the United States. We think that's exactly a technology that's needed particularly for the coals that are available in that part of the world and we are encouraging by everything that we see. Anna Stromberg – National Australia: Thank you.

You bet.

And next, we'll go to the line of Daniele Seitz with Dudack Research. Please go ahead. Daniele Seitz – Dudack Research: Thanks for taking my questions. I just had two little ones. When did you anticipate you may need a new equity? Would that be more like into 2011, 2012?

Daniele, this is Brian. We are not anticipating any equity needs beyond what would be coming in through the drip that we have on right now. Daniele Seitz – Dudack Research: Okay. And what was the total impact of the outages of the Cook unit in 2009? Is there a number on that?

Yes, Anna, that was – Daniele, I'm sorry. That was – it comes in two lines. The first one is in other operating income and it was the gross amount there, which was just under $200 million, but then there was an offset to that that was close to $80 million, which is the amount that we used to reflect keeping the Indiana and Michigan customer whole relative to fuel because of that outage. So those two offsetting items are both reflected in different lines there. Daniele Seitz – Dudack Research: Great. Thanks a lot.

Thank you, Daniele.

And next, we'll go to the line of Phyllis Gray with Dwight Asset Management. Please go ahead. Phyllis Gray – Dwight Asset Management: Good morning.

Good morning, Phyllis. Phyllis Gray – Dwight Asset Management: Would you please elaborate on your expectations for free cash flow this year?

Yes. We are anticipating being close to cash flow neutral. Some of the things that went down on our cash flow in 2009 were increased fuel deferrals and some of those increased fuel inventories that we had in addition to CapEx. The CapEx we addressed and talked about, dropping that number about $400 million versus 2009 and we anticipate some significant turnaround in terms of – the fuel deferrals would be less than 50% of what they were in 2009 and we anticipate to start working down some of the fuel inventories that we have. So with those improvements, which in aggregate would add up to about $1 billion, we anticipate being much closer to cash flow neutral, if not slightly positive on the cash flow side for 2010. Phyllis Gray – Dwight Asset Management: And what are the implications for financing plans this coming year?

A few things are going on in terms of financings. We anticipate clearly having to issue much less debt than we what we did prior year. We've gotten out in front of what our financing requirements are for 2010, pre-funding a significant component of what needs to be done in 2010. We believe we have financing requirements still left of around $1 billion, about 50% at the senior unsecured level and another 50% of that at the pollution control tax exempt bonds. A major component of what we will be doing in 2010 in terms of our financing requirements is going to be what we are going to be doing with our credit facilities. As they become current, we are certainly going to be looking later this quarter, early next quarter at renewing particularly the $1.5 billion in credit facility piece that comes due a year hence. So we are going to get on top on that and believe the markets are open and available for us to conclude that activity as well as the other activity I described. Phyllis Gray – Dwight Asset Management: And any more equity?

No. Other than our drip, we don't anticipate anything – any requirements now or for the next several years. Phyllis Gray – Dwight Asset Management: Thank you very much.

You bet. Thank you.

And next, we'll go the line of David Frank with Catapult. Please go ahead.

Good morning, David. David Frank – Catapult: Yes, hi. Good morning, Mike. A question for – well, maybe for Brian on the O&M. Pretty amazing, you guys sound like you are doing a great job of holding the O&M down. What is really causing that or what – and then what is the outlook for maintaining that level of O&M going forward? If you see any kind of snapback in the economy or – I mean, if things, they depressed or O&M stayed lower, how linked is it to growth and how much of it is just temporary?

I think we've done it differently from how some others have done it, in that we didn’t just go out and slash and burn on O&M. We tried to pick to take thoughtful approach to that. We haven't had significant lay-offs the way some of our other colleagues have, but at the same time, we've reduced headcount from the first of 2009 to now by over 300 folks and that incorporates some additions that we've done like a security force at our Cook nuclear power plant has come online, well over 100 people. And we've still been able to hold – and actually reduce headcount by 300 people. So I think the discipline that we've demonstrated is sustainable. As a counter to that, we are certainly adding new facilities and as we do things at Mountaineer around carbon capture and sequestration, as we add new facilities like the Stall plant, the Turk plant, we need new folks to operate those and those are new expenses. So what we are trying to do is be as disciplined as we can in a sustainable fashion, but as we do have new costs that are representative of new operations that we are doing, get those into rate base as quickly as we can and make sure that we are being compensated on a timely basis for this.

We are trying to help the President with his jobs bill, David. David Frank – Catapult: Yes, that's nice of you. So we really – it's really kind of permanent. Obviously, we would all expect, if you open new facilities, to hire new people. But sort of your operating level, if you looked at people versus current level of operations – O&M versus current level of operations, is that a sustainable level?

I think the discipline is something that you are going to see sustainable. So we are looking at keeping those costs low, we are looking at making sure that as we go in for rate cases we can demonstrate that on a benchmark basis. We are being as strict as we can, keeping our eyes focused on costs and as a company and a management team, we are committed to doing that. David Frank – Catapult: Great. Great, thanks a lot, guys.

You bet, David. Thank you.

And next, we'll go the line of Anthony Crowdell with Jefferies. Please go ahead. Anthony Crowdell – Jefferies: Good morning. I have some questions on the parent's debt at AEP. When I looked, it appears you are actually about a little over $1 billion of debt at the parent and about $490 million of that is due, I guess, this March. Are your plans to retire that debt or refinance that to kind of delever the parent and reduce parent expenses?

We haven't made a decision on that yet. Obviously, we are looking at that where that maturity is coming due, but we still haven't made a decision on that. We are still watching what happens obviously with our credit rating at Moody's. They are looking to see that we do a couple of things here in the next quarter around the facility – credit facility renewal, they are looking to see some load come back and we are looking to show some improvement on those things and get our credit rating in order. But around that piece in particular, we haven't made a decision. Anthony Crowdell – Jefferies: Great, thank you.

Thanks, Anthony.

And the last question will be a follow-up from the line of Michael Lapides with Goldman Sachs. Please go ahead. Michael Lapides – Goldman Sachs: Hi, Mike. We've talked about this before. Just want to circle back with you. You can talk a little bit about the amount of coal megawatts you own that are currently unscrubbed and the – of those, the amount that you anticipate retiring versus actually scrubbing over the next, I don't know, four or five years?

Sure, Michael. When we look at the fleet, we probably look at 5,000 megawatts plus that over time will find their way to an orderly retirement. And a lot of that has to do with or without a carbon undertaking. It just simply has to do with – they don't lend themselves because of their efficiencies, their age, and their megawatt size to the capital that would be required to retrofit. So up to this point in time, we continue to buy credits to take care of their emission requirements and we will keep doing that. And much of that also is driven by the power price in the marketplace. So I think that Nick Akins and the team that manage the generation fleet have done an excellent job at preparing us for a future – almost, no matter what the requirements are, we as an industry continue to look at the EPA's CARE and Cam-Or rules and there are upgrades of those two rules going forward and the potential of them becoming the principal regulator of carbon and carbon emissions and that really doesn't change that forecast much. So we think there is an orderly way to go about doing it. Many of the plants are depreciated for the most part. We would make appropriate filings at the principal jurisdictions responsible for those plants, so we cover the rest of the stranded capital if you will, not dissimilar from what the nuclear folks did a handful of years ago when they took billions and billions of dollars of capital out of the existing nuclear fleet and called it stranded and are recovering it in many jurisdictions securitized. The coal fleet, if and when nationally, let alone American Electric Power – if and when it needs to retire, it will mostly be those older, less-efficient that have not been in a retrofit basis for the Clean Air Act as it exists. So that's about the size of it. The timeline is really stretched out, probably between now and maybe 2025, 2025, before we would see the entirety of that fleet retired. As you know, also in the New Source Review settlement, there were some commitments to retire facilities and we will continue to stay within the parameters of that agreement and its renegotiated phase as we should. Michael Lapides – Goldman Sachs: Got it. Thank you, Mike. And in terms of just near-term retirements, kind of thinking about the next five years, how – of that 5 gigawatts you mentioned, how much of that could be in the next five, maybe seven years?

Probably something in the order of 1,000 to 1,500 if you go five to seven years. Michael Lapides – Goldman Sachs: Okay. Thank you, guys. Much appreciate it.

Thank you, Mike. Well then, thanks to all of you.

Thank you for joining us on today's call. As always, our IR team will be available to answer any additional questions you may have. Lola, can you please give the replay confirmation?

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