Michael G. Morris, Chairman, President and CEO Susan Tomasky, Chief Financial Officer.

Elizabeth Parrella, Merrill Lynch Paul Ridzon, Keybanc Ashar Khan, SAC Capital Craig Shere, Calyon Securities David Frank, Piqua Capital Greg Gordon, Citigroup Gordon Howald, Natexis Daniel Franks, Dahlman Rose Michael A’Peters, Golden Sachs Thomas Neil, Citadel Investments

Julie Sloat, Vice President, Investor Relations: Thanks John, good morning and thank you for joining us today, to discuss AEP 2005 Fourth Quarter Earnings and earnings for the full year 2005. I expect that you have already seen the press releases issued earlier today. It is also available on our web page at aep.com. In addition to the financial schedules included in the press release package the webcast (indiscernible) visuals of charts and graphics referred to by AEP management during the call. An investor information packet will also be available at aep.com today at approximately 1PM Eastern that will include a consolidated balance sheet and statement of cash flows as well as full income statements for our utility operations, gas operations, investments and parent company. The earnings release and other matters that maybe discussed on the call today contain forward-looking statements and estimates that are subjects to various risks and uncertainties. Please refer to the SEC filings including the most recent annual report on Form 10-K and quarterly reports on Form 10-Q for discussion of factors that may cause results to differ from management projections, forecasts, estimates and expectations. Also on the call we will discuss the measures about company performance that is on going earnings versus reported earnings, that differ from those recognized by Generally Accepted Accounting Principal or GAAP. You can find a reconciliation of these non-GAAP measures on our Investor Relations website at aep.com. I will now turn the proceedings over to Mike Morris, Chairman President and CEO of the company to lead an opening presentation and then we will have time for questions. Michael Morris, Chairman, President Chief Executive Officer: Julie thanks a lot and as usual I will join in welcoming you all here, I know this is again a busy day for you and we are encouraged to have all of you with us. I obviously will share the speaking time with Susan, our Chief Financial Officer and will try to give you what we believe is a fair and full review not only of our 2005 performance, but some of the issues that are facing us here in 2006 as we go forward. I don’t think that there is any way to measure 2005 at American Electric Power other than saying that it was a great year. The ongoing earnings performance was well above what we originally thought that would be accomplishable in 2005 and I really need to thank all of the team here at home on how much was accomplished. The operating companies all performing as we had hope that they would relatively comfortable rate treatment in most all jurisdictions and we will speak to the Texas issue in a moment. And overall some very solid year-over-year growth in our energy center not only for what we consider be systems sales or issues sold to our retail customers but in additional increase in the volume of energy that were able to put into the off-systems sales market as well. A couple of other very important highlights for us and we thank ultimately all of those who own and work for this company, the fully funding of the pension at the end of calendar year 2005 as well as the dividend increase for our shareholders put in place by the Board of Directors in the fourth quarter. We obviously were very active in a small way in the asset acquisition strategy, as you know we added a couple of very important gas fired capacity machines to our Eastern portfolio with a Waterford and Ceredo purchases and of course as I constantly please most people we were very active in the M&A activity purchasing through negotiations the 59,000 customers of Mon Power here in Ohio. Not quite as big headline wise as some of my friends but nonetheless we were able to negotiate an undertaking with that activity approved by the Ohio commission. We continue to feel comfortable about 2006, our range for guidance remains the $2.50 to $2.70 cents a share, obviously January presents us and all utilities with quite a challenge already early in the year with incredibly warm environment that was all been experiencing. Important for us in 2006 as before and going forward will be the overall rate activity that has been teed up and filed in calendar year ‘05 and much of which will be in dealt with in ‘06. It would be anything short of honest if I didn’t say that were extremely disappointed in the Ecom discussions that had been held by the Texas commission in the TCC stranded cost “true-up” case. We believe that the commission is wrong and the way that they have interpreted what we have done and we believe that is an unfortunate impact of course, which is as you know the driver of the delta between the GAAP earnings and the on going earnings for us in 2005. We have made the adjustments that we felt were appropriate under the accounting rules on the GAAP earnings forecast or actual calculation I should say for 2005 and we will continue to pursue our rights presuming that the final order from the commission follows the discussion from the bench as is the case as you seen before in Texas. Short of that we felt that many of the ways that the commission dealt with the TCC standard cost case were appropriate and we felt that much of they viewed was as their staff had viewed and as we had viewed as filed. We will go through a number of additional proceedings in Texas in ‘06 much it directed toward obviously securitization of the final number, whatever that number might be and Susan will touch on that a bit as we go. We have very important filings in front of the commissions in West Virginia and in Virginia, Kentucky and Indiana and we will continue to pursue as aggressively as we as we can, resolution to those cases when it’s available to us, if not we will continue those cases, through their statutorily defined timeline, to insure that the capital invested on this system which as you know not only has been significant but will be going forward earns as the appropriate way of return both for the debt providers as well as equity investors in our company. We feel comfortable about the opportunity to address some of those issues by way of settlement discussions but as I said if it doesn’t yield the results that we think are reasonable for our shareholders, then we will go forward and continue to process the case. Very important in Ohio as you know, we continue to wait for a final resolution on the integrated gas combined cycle filing that was made in 2005. I would hope that we will have something to report on that matter early here in 2006 so that we can stay on our intended 2010 in operation date. As you know we have also made a filing most recently in West Virginia seeking that West Virginia commission’s review and approval of another integrated gas combined cycle facility that would be built at our Mountaineer station in West Virginia to continue to provide energy to the customers in our eastern footprint. Obviously and Susan will talk more directly to this issue our capital expenditures for 2006 are a bit higher than they were as we shared data with you on our first look at ‘06 at the EEI meeting not many weeks ago. Much of it has to do with capital being moved from ‘07 and ‘08 into ‘06 as well as some spillover of things that didn’t get done in calendar year 2005. We are concerned about the capital allocation as we go forward as I know many of you are, but as we have said before and Susan will give you a bit more of granular detail we continue to feel that we have the opportunity to manage the capital outflow as we go. As we look at projects and we look at assignments in front of us we are encouraged by the opportunity to invest but are mindful of trying to make certain that we have adequate cash on hand to do that as well as keeping a very strong look at our balance sheet to ensure that we stay at or below our 60% debt equity cap ratio. With the challenge of the ECom decision puts us in a bit of a cash short position compared to where we thought we would be in ‘06 but again we will find a way to deal with those issues as we go. And lastly because yesterday was such an important day not only for American Electric Power, let me close my comments by simply saying we have received no end of support for the filing of what we call the I-765 project de-bottlenecking PJM 76500 volt transmission line that we think is essential for the well being of this industry going forward, ultimately to be determined by the PJM by the FERC and hopefully by the Department Of Energy to be an essential project to be built from our Ames station in West Virginia to the DEEN (phonetics) sub station in PSE&G service territory in New Jersey. We are excited about the opportunity to be involved with the project, it has a long time line on it, as these things do but nonetheless we think it’s an appropriate step from American Electric Power to take a continuing to embrace the notion of an open market place where all power plant have a right to compete against each other in that ever growing competitive wholesale power market. So with that I will turn the discussion over to Susan for her presentation and much more deep into the numbers but let me again close by simply saying we think 2005 was an excellent year for those invested at American Electric Power and surely a great year of performance for the 19,000 people who come to work here each and every day on your behalf. Susan. Susan Tomasky, Chief Financial Officer: Thanks Mike. What I would like to do this morning is talk through about earnings first for the first quarter and the year and then we will come back to the cash and Cap-Ex issues at the end of that discussion. Let us talk first about the fourth quarter. And, as you saw from our press release reported earnings for the fourth quarter were negative $0.38 per share, and that of course reflects the $0.67 that difference between prior year that is primarily attributable to the $261 million charge recorded in the fourth quarter of ‘05. Ongoing earnings for the quarter were $0.29. I am going talk in detail about utility operations in a few minutes here for the quarter but, I do want mention a couple of other things with respect to the other lines. The investment segment showed an improvement over last year it contributed $14 million to earnings versus $7 million loss we saw last year. There are two factors of issue there we had a very strong contribution from our MEMCO barge business, that was driven by favorable barge rates. And we also saw the non recurrence of cost that we saw in 2004 associated with closing down a various investment operation. It was also you will note improvement of the parent company quarter-over- quarter, and that really has to do with the fact in 2004 we entered into some energy marketing settlement, that were booked with the end 2004 that’s worth about $20 million the difference, so virtually all of that. I want to go into a little bit more detail on the next ,slide and if you look at the slide labeled fourth quarter of ‘05 utility operations performance on slide number 6. I want talk a little bit about where we stand year-to-year. On an ongoing basis the results to the $0.27 versus $0.51 for the fourth quarter of 2009 for utility operations. I have a number of differences, but I want to start with the most significant one. If you look at line 14 you will remember that we booked $109 million in TCC carrying cost in the fourth quarter of last year. That compares in 05, fourth quarter in which we booked only $7 million, and that numbers reflects two things, the fact that over the course of ‘05 we booked those TCC carrying charges on a quarterly basis, and we also took an adjustment to the number in the fourth quarter as a result of the Taxes TCC true-up proceedings. So that is the single biggest item that accounts for the difference in ongoing earnings for the quarters between the two years. Stepping back from that item and talking a little about our operational performance what we saw was the both wholesale and retail sales were strong in the fourth quarter. There was retail growth to regulated utilities was about 5%, in Ohio about 4%. We benefited from better prices, usage and weather. As you see from the slide here, we had a positive weather result against normal of $0.02 and against the prior of about $0.3. However, you will also note that the $679 million of gross margin at the regulated utilities is down a bit from previous year. And what that reflects is that we have also included in those margins a credit of $40.5 million which is going to be return to customers, this is a credit to customer at SWEPCO and PSO and that is pursuant to the off-systems sale sharing agreement that we entered into at the time of CSW merger. I would note that we filed with to terminate that agreement for 2006 but, nevertheless the very robust performance that we had on off-systems sales in ‘05 that did lead to this result. So that is a key different between those 2 lines, we obviously had a very significant positive in Ohio, that was driven largely by weather obviously we incorporated and see the benefit the rate stabilization plan both in this quarter and across the year in Ohio. You see that the strength in the off-system sales did continue through the fourth quarter, $57 million in ‘04 versus the $112 million that we saw in the fourth quarter of ‘05. And that has really results from continuing the high prices. And also I think it’s worth noting that we sold $15 million improvement in transmission that is largely in ECAR The last two significant items on note are Texas supply, we saw $25 million quarter-over-quarter decline, and as you know there several dynamics is going in Texas. Most significant of course is the sale of STP, we did have an outage of union in the fall and but this negative were offset by a $30 million in this quarter refund that we booked back for fuel refund in Texas. You will also note a noticeable increase in O&M on the quarter, that is a catch up I think we talked to you over the course of the year that we were under running in O&M and then if we found ourselves in the position to be able to spend those dollars to catch up on tree trimming reliability spend and plan maintenance, we would do so and those of the dollars which you see in that line. To talk for a moment about year-to-date let’s go to the next slide, which is entitled 12 months year-to-date earnings performance on ongoing. I should note that Michael alluded to earlier the GAAP with results for this year with $2.09 as compared to the $2.73 in ongoing that we have for the year, that although there are some other small items that are reflected in the difference between GAAP and ongoing. The key one of course the item that we saw in the fourth quarter which is a $384 million pre-tax $261 million after-tax charge resulting from the deliberations of the Texas commission in the TCC true-up case. Obviously we had a very significant improvement year-to-date in utility operations on a year-to-year basis $2.80 in 05 versus $2.65 in ‘04. And the investment segment also reflects the trend that I alluded to in the quarter. We had a positive contribution from that line of $24 million to $0.06 versus the loss we saw in the previous year. This in addition to being fueled by improved MEMCO results was also effected by the sale of HPL in the gas operations, which did suffer a loss in the prior year. The parent company expenses were down year-over-year, reflecting about 5% improvement again the major item was the fourth quarter item of the settlement cost that occurred in 2004. So, if we turn to the next slide the 12 months year-to-date utility operations performance there is a great deal of details here and I am not going go over all of it but would happy to entertain questions on this item. But, I think that it’s appropriate to observe that what you see this year in an ongoing performance is a continuation of the trends that you saw in the first three quarters of very strong performance in off-systems sales, continued growth, benefit significantly by favorable weather, the increased margins in Ohio offset somewhat by lower fuel margins which of course affected both the regulated utilities and the Ohio, companies as well. We did see an increase year-to-year in operations and maintenance expenses, and that has a little bit to do with changes in geography but also has to do with the items that I mentioned earlier which is a desire to take full advantage of the earnings opportunities we have this year and get some tree trimming in other plant maintenance activity done as well. That leads of course to our excellent results $2.80 on an ongoing basis for utility operations. I’d like to turn next to the cash flow page, and talk about a couple of items there. We did end the year with a little positive on cash flow basis, while accomplishing a great deal through the utilization cash for this year. Our cash flow from operations totaled $1.8 billion which was composed to $787 of cash from continuing earnings and it’s adjusted for the typical item that you see there are enumerated in your slide. I will note in particularly $626 million in ‘05, to fully fund our pension. I would also note that there were other investment activities Mike mentioned that and you see that it required cash outlays of $929 million in 2005, that includes the capital investment of $2.4 billion, which was about $200 million last than we had forecast, and that is offset by some asset sales and some sales related proceeds. We did received a total of $1.6 billion this year from the combined sale with HPL, the South Texas project, the Centrica sharing and the sale of Pacific Hydro. And than we have the purchase of the Waterford plant for $218 million, the Ceredo plant to a $100 million and then the Mon Power purchase of $44 million, which did require cash outlays for the year as well. The financing activities involved cash outlays of $785 million and this was primarily driven by the dividend, which totaled $554 million for the year. And we talk a little bit about where ended up on our capitalization. We ended the quarter at 57.2 % that the CAP on GAAP basis and 58% on a credit adjusted basis. As Mike said our goal is continued to maintain that cap on an adjusted basis in the 60% range and we are very pleased to be well within that number going in to the coming year. If we could now I’d like to turn for a minute back to the slide which appears on page 4 called revised capital investment forecast and I am going to speak to that and on increase that Mike talked about. As Mike suggested what we have done in revealing the capital forecast between our meeting and presentation at EEI to today is look at the timing of capital spend and made a couple of business decisions, the first was to continue to catch up with some under spend according to last year’s budget that occurred, that did not occur in’05 but it’s appropriate to do in ’06. And we also made a decision to at least plan to roll forward certain additional cost from 2007 and 2008 into 2006. There is some incremental increase over that three-year period, the total for all three years is a $116 million that includes $75 million spread equally over three years at PSO. We have that the encouragement of staff agreed that we are going to attempt and undertake a project to convert over headlines to underground lines we have what we think is a very satisfactory rate arrangement for recovering those cost as we go and so that the average then would be the difference the 75 and the 116. We’ve continue to believe very strongly in our ability to move this capital around and it is something that you should expect to see, in the coming years. We also believe as this chart show you that we have $ 1.5 billion of what we call throttle flexibility, the ability to move dollars ahead to future years if we believe that is necessary given regulatory outcomes. We obliviously a very significant regulatory outcomes that we will be having an opportunity to look at the quarter in the, certainly in the first half of this year and throughout the course of this year Mike discussed several of those and those will be influential as we manage this capital spend over the course of this year But we have as a business matter decided that the optimum spend schedule is one that does take advantage of outages, takes advantage of contracting opportunities that we have in order to get this spend done this year. We also believe that the improved reliability that we get from some of this capital spend will improve significantly our opportunities in our states going forward. The last point I want to make is on paying for that additional increment of $400 million and if you turn to page 14 of your slide what you will see is the revised chart called Capital Investment Funding and rather that take you through all these numbers what I want to do is to point to you some differences and the major sources of the additional funding for this year over the last time that you should have seen in this chart. As I mention of course the major difference is the CapEx spend $3.7 billion through the year versus $3.3, you also see the change in debt increased by that of $300 million it is $2.4 billion that the last line under cash sources as supposed to the 2.1 we saw in prior years. We also has as a result of this spend would expect to reduce the ending cash balance by $214 million we had originally projected about $566 million and we are going to see on ending cash balance under this plan of $326 million. So I think I probably talked enough but obliviously this is year-end and there is a lot of details to talk about and so I will turn it back Mike and he can take the questions. John we are ready for questions.

Q- Elizabeth Parrella: Thank you. Can you talk about the impact of TCC decision in terms in what’s kind of built into your ‘06 guidance. I think just trying to remember the specifics of the regulatory treatment that I think you had not been booking like a deferred equity return and now I think to get to, once this is all finalized to do and you got kind of smaller recoverable balance, how does that kind of effect what goes into the ‘06 numbers. A - Susan Tomasky: Well, in terms of ‘06 numbers what we did was take a pretty conservative view and we basically said that we would assume about a 1.2, 1.3 cash influx in the fourth quarter that’s an adjustment that would assume Elizabeth that what we would do is to securitize everything that we got, including that which had previously expected to be in the CTC. Now if - so you may recall that there are two pieces, they’re the trend generation cost piece and then there are the true-up amounts that would ordinarily be collected through the CTC. Our 8-K tells you the adjustments that were made to get to the current standard book balance which is 1.275 and I would recommend that a safe thing to do would be to move forward on the basis of that number as a securitizable amount but it’s not exactly correct. As you know that there pluses and minuses and a lot of that will turn on the view of the commission as to whether or not we are to securitize everything or whether we securitize these trend generation cost balance and continue to collect what would effect a negative CTC over the coming years. If we were to collect negative CTC what we would have is somewhere and we’re still think it’s true but it somewhere between a 2, 3, 4 set difference on earnings and that varies dependent upon how the commission chooses to compute that prospectively. As you know they’re considering a change on how they compute carrying cost going forward, and so it’s kind of difficult to tell. But that, those are the sort of the basic parameters I would use in look at it. We could end up securitizing substantially more if we are not required to show adjustments for the amount that is in this CTC. We do have if we were permitted to get the equity return that’s a $153 million that would be added to the 1275, there we would have to address the ADFIT issue in someway or the other, that’s 276 negative. There are other positives in there as well, so they are bunching numbers moving around which is the reason why I would recommend you towards the frame work that I discussed before. I don’t believe there is downside from that framework there maybe upside. Q- Elizabeth Parrella: Okay. Thank you and just a question on coal cost. Where did you come in for the year in terms of coal cost increases and maybe you kind of update on what you expect in terms of coal cost increases for ‘06 and where you are from a hedging perspective, if you look at ‘06, ‘07 positive. A - Susan Tomasky: Okay. Let me talk a little bit about ‘05 and Mike can talk about ‘06. With respect to ‘05 we ended the year with a price return, average price return $32.50. So that represents about 14% increase year-over-year. In terms of the effect on margins we talking about $63 million in the negative effect reduced margins in the regulated utility about $44 million in Ohio. That’s basically the picture with respect to 05. Mike you want talk about ‘06. A - Michael Morris: Well when we look at ‘06 Elizabeth to the question that you asked obviously we covered for our coal requirements in ‘06. We are seeing a better delivery from the Powder River Basin in the month of January but continue to see pressure not only on volume deliveries but what we might see in ‘06 for spot coal buyers would increased rightful attention on mine safety in the Eastern coal producing states and country. So we watch that with a great deal of interest as to ‘07 we’re in the 70% to 75% already covered for our needs going into the year and feel comfortable about that. As you know we continue to address the issue of fuel adjustment costs that’s a principle part of the filing in West Virginia we believe that we will being the recovering in an accounting in current sense in West Virginia by mid year that’s part of our filing is we made it. That will take us to our schedule that we have shown you before of 70% covered either by rate proceedings and or market realization that will take us into 75% to 80% range covered versus 20% still being addressed here in Ohio. As you know the Ohio rates did adjust under the rate stabilization plan in calendar year ‘06 and both the operating companies now that cash of course will go against those endeavors. Yet, we continue the see fuel price increases, we’re forecasting that same mid to a low double digit increases for the ‘06 price versus ‘05. All of that still translates into like a $1.50 or less per million BTUs and when you are selling particularly in the off-sale market place frequently against $7, $8 or $9 per million BTUs gas that puts us in pretty comfortable range. But we watch it, we do the best we can do I constantly maintain as you heard me say ad nauseum that there is no one better at buying coal in this outfit and I think Chuck Zebula and team continue to demonstrate that year-over-year the console contract being an important indication of that with a lot of mine mouse coal that’s delivered by conveyer belt and or truck to our facilities so we still we see those issues but we feel comfortable about the way we are handling them. Q- Elizabeth Parrella: And just a very quick follow up and let other people ask questions, just on your comments on TRB just been to another company this morning talked about the fact that they still seeing some pressures on the deliveries that they had not gained much improvement as they had expected coming into the winter here. It sounds like you are seeing some improvement in terms of rail delivering on the TRB side in January? A - Michael Morris: We are indeed, we’re a little concerned for the rest of the year as we understand that it’s a suspension that some of the ongoing required maintenance on the track but we have been seeing contract deliveries come back as they should. So someone’s getting shot at it’s not us. Q- Elizabeth Parrella: Thank you. A - Michael Morris: You bet.

Our next question is from the line of Paul Ridzon with Keybanc please go ahead. Q- Paul Ridzon: What kind of opportunity are you seeing presented by mild weather and is that kind of lessening your regulated load. Is there a sufficient margin to make up this short fall that weather is costing you? A - Michael Morris: Well we managed the overall generation fleet obviously as best we can clearly less retail does provide more energy to be sold in the off-systems market place, it also give us ongoing opportunity to continue to optimize the fuel as well as the emission credit. We continue to balance to the overall generation portfolio as you would expect us to do. Q- Paul Ridzon: And then just looking forward what kind of rate making treatment do you expect on this line that you announced yesterday. A - Michael Morris: Well the most important determinant of the rate design and the rate recovery of that facility will be coming through two very important agencies. One will be the PJM regional transmission need analysis which we have asked them to consider this under that, puts it in a very comfortable rate recovery and that it’s the cost the activity are spread over the literally millions and millions of customers who received benefits from it. We have earned back the envelope numbers that would take someone’s overall kilowatt rate up by a mill or so which is really inconsequential and we surely hope that the PJM’s sees it as a regionally beneficial transmission undertaking and then of course in the front of the Federal Energy Regulatory Commission we have asked in our declaratory request to them for the appropriate return on equity and the upper reaches of the range or reasonableness as well as the incentives that are laid out for people who take these kinds of endeavor and would hope that, they would consider it that way. And equally important determination for the investors in this company and the ultimate resolution of this facility and it’s opportunity to get billed, well we have a lot to do with DOEs characterization of this as a corridor under the energy policy Act of '05 authority granted to the DOE for the issue of ultimate eminent domain coming at the Federal level because I would expect we will have challenges along the right of way for, we know, we need the power, we surely enjoy the lack of congestion charges coming in our electric bill. We are encouraged by the opportunity to see the new power production facilities come online, we are encouraged by the renewable potential aspect in a line like this offers, we just don’t to see the line anywhere near our house. So, we know, we have those issues. Q- Paul Ridzon: And most of the CapEx is well after the environmental CapEx is rolled of ? A - Michael Morris: It surely is. Q- Paul Ridzon: Thank you. A - Michael Morris: You bet.

Next question comes from the line of Ashar Khan with SAC Capital, please go ahead. Q - Ashar Khan: Good Morning. Mike, you just mentioned a little bit about Ohio situation, IGCC post 2008, anything in the legislature in the commission, as you look at this year going into next year? A - Michael Morris: Well, we, as I said in my comments, actually we are looking forward to a commission decision, we would have hoped to receive in calendar year '05 but we are patient. We believe that the commission will find in their process that, the things we have asked for are reasonable and we will go ahead and approve it and again we await that decision as you know, it is clear from the growth that we are seeing in our integrated resource plan not withstanding, renewables, demand side management, energy efficiency and all of the things that are so important to our customers that we need to have some central generation bill on the eastern footprint of AEP. We believe, as I mentioned, that the commission will support us in that regard as to the post OA timeline, Dayton has taken an approach that the stretched out there, rate stabilization undertaking for two more calendar years being 2009 and 2010. There is no move afoot in the legislature other than that, I think, the chair of the Ohio commission in his annual update on the market conditions, in Ohio, mentioned to the commission that they continue to look at options and opportunities to ensure that, all that can be done by the utilities and the regulators as well as the legislature is directed towards seeing towards seeing to that, there is not an economic disruption caused by a flashover market day switch whether that would have been, as you know, calendar year ’06, or whether that turns out to be calendar ’09. I expect you’ll see the Ohio utilities continuing to dialog on that issue and we working on that issue, and I know, that there are other views about that going forward but we continue to occupy the space that we have which is defined and answered in calendar year ’09 and 2010 which would allow us to move closer to market, yet not trying to put any economic impact on the overall Ohio economy at that time. Q - Ashar Khan: Mike, would you think, like the last plan, was I guess nearly a year before, the implementation date of ’06, so, do you think, all of these discussions and if there is any other rate stabilization. These are all ’07 events, that’s how we should look at them? A - Michael Morris: Well that’s a great question, as you know, from listening or at least reading something about the state of union message and not only is ’06 pivotal electoral year nationally, it’s an extremely important electoral year in Ohio and that Governor Taft is term limited and we will be facing political season here, that may not lend itself to those kinds of discussions, so what you might see, is that, calendar year of ’07 would be a better time wherein new governor and the leadership in house and senate, I would expect to stay the same, here in Ohio but nonetheless, we will see how that unfolds, I just don’t know, how we will go in ’06. Yet the commission believes that, rate stabilization endeavor addressing those for two years should be filed in ’06, we would sure you will follow that lead. Q - Ashar Khan: Mike, could you just share, your optimism in the West Virginia and Kentucky in terms of, I know you filed the case but sometimes suspended, might be a little bit early in versus the other. But you got some recommendations in terms of, your regulatory team and their optimism in terms of getting a good result? A - Michael Morris: I don’t think that, there is any question is that, we feel very comfortable about the filings that we have made in those two jurisdictions and we continue to have constructive discussions particularly in Kentucky with other parties meaning the Kentucky Industrials, the Attorney General’s office, the Commission staff. And in West Virginia, we continue to have an opportunity to provide additional data to those who are involved in the case. And I would expect that, there will be sometime and then hopefully not to distant future to engage in settlement activities there as well. But please remember, as the filing in West Virginia is greatly driven by the environmental capital editions on terribly important power plants for the economy. In West Virginia, let alone the electric customers without electric power but equally important for the mining industry and the overall economy of West Virginia. We feel very comfortable about that and clearly, being the optimist that I am and I am very encouraged by the way that those cases will unfold as the year goes on. I don’t feel as bullish about the, what we call it as ENR case in Virginia, however we do continue to have dialogues with commission staff and others in Virginia and we will try to seek resolution to that matter, if we can find it. Q - Ashar Khan: Sorry, if I can just end up, Mike, when you increase the dividend, you had mentioned, I guess, going in that, when an increase in dividend takes place, we want to be comfortable that we can see growth going forward and it’s just not a like a one time event and then you know, we are kind of flat for a period of time. Can we, is that still the thinking, we had increase in dividend but increase in dividend was done at a level where we could expect to see future increases in dividends going forward? A - Michael Morris: So that, will continued to be our plan, as you know, from the comments that Susan shared with you on the capital side of issues. We look at our obligations of the share holders in an extremely important in longer term view. One, we would always love to have reasonable yield in the general yield category for electric utilities, we find ourselves there, for the most part now. We will feel comfortable that going forward to 60% to 65%, pay out ratios, a good place to go and we intend to continue moving in that direction. Yet we also believe very strongly in the notion that investors in our space particularly those who are there for the longer term will be highly rewarded by the capital being deployed on the operating companies, of course with the adequate rate of return as granted by the various commission that those capital projects are in front of. And that’s why, when we talk about our flexibility on capital, when you look at the $3.7 billion, you know, fully 1.5 of it, is in the category that we could say, let’s not spend this money in 2006, in fact, lets delay these projects for some indeterminate period of time until we get a clear capital signal from the rate regulator and of course that would allow us, I would hope to be in a position to address something like a dividend increase. So, you will see continue to look at those things and weigh them. But you started out with the right approach that we do want to continue to have some small yet steady dividend increase for our customers, it’s all about, capital allocation and capital availability. Q - Ashar Khan: Thank you very much.

Next question comes from the line of Craig Shere with Calyon Securities, please go ahead. Q - Craig Shere: A kind of follow up on Ashar couple of questions. I am trying to think, over the next like 3, 4 years, in light of the, you can’t explain made of a couple other things don’t go well, it’s have a worse case expectations not yet, that’s what we necessarily look for. Would your cash flow response be to first to slightly increase your debt levels to a degree that doesn’t hurt your credit. Second to further CapEx cost into the future, even beyond 3 years and then, you wouldn’t expect that , at any time to totally eliminate annual dividend increases or be considering an equity issue to specifically fund the CapEx, is that a fair statement. A - Michael Morris: I think you got them lined up appropriately clearly we will watch this with great interest and stay very, very close to it. Increasing the debt level beyond what we are comfortable with is our least likely option. I would imagine that project delay would be much more, the relief valve that we felted that was needed. Stopping the constant view of the potential divided increase would be our least likely, endeavor take as well. We feel very strongly about that going forward. The equity issue, once issued is something that we have continued to look at. We don’t see a need for it. And don’t feel that there is any requirement for it, and that’s where we will keep that as well as we go forward. Q - Craig Shere: Great, I appreciate that.

We have a question from David Frank, with Piqua Capital. Please go ahead. Q - David Frank: Yeah, hi good morning. A - Michael Morris: Good morning, David. Q - David Frank: Susan I had question 513, mine 5, I just wanted to know the majority of those sales are from Ohio companies? A - Michael Morris: Just one second, David. A - Susan Tomasky: Well that from the east. I didn’t care really distinguish among Ohio versus other companies. Q - David Frank: Okay, you know one? A - Susan Tomasky: But, they are from the east. A - Michael Morris: Well we make those kinds off-systems service from the fleet. Q - David Frank: Okay, I was just trying to get a feel for this Ohio is two thirds or 50%, you had ballpark on it? A - Susan Tomasky: We really don’t look at it that way, David. I can’t help you, I am sorry. Q - David Frank: Okay, do you know what the average realized price was for those sales in the east in 2005? A - Michael Morris: Why I do, I don’t know that I have that number at the top of my head, David. We will search around and share some of that with you, I mean if you divide the megawatt-hours in off-system sales by the revenue they generated that will you give a per megawatt-hour price. And then you can do this same on some of the cost structures and get a per megawatt-hour production and you can back yourself into the number that on average you won’t be wrong, but remember the 1300 megawatt plant generate energy for something short of $20 a megawatt-hour. The 600 megawatt plant generate energy for something north of $20 a megawatt-hour, so different plants with different performance characteristic with different coal feeding with different land fill requirements. You can get a nice average, but it would be hard for us to share with you more granular detail on which plant at what price enters the market place. A - Susan Tomasky: The additional information we can provide is that about 70% of the off-system and sales last year were on peak, now as a post off. Q - David Frank: So, 70% were on peak and they were all that 32 kilowatt hours, that’s all in the east. A - Susan Tomasky: Yes. Q - David Frank: Okay, and I was also hoping Susan if you could may be optimize? A - Susan Tomasky: David let me correct that is, its really close to 86% in the east, there was some off-systems sales activity in the west as well. Q - David Frank: Okay, that’s really what I was trying to get at. A - Susan Tomasky: Okay. Q - David Frank: And then I was also hoping, maybe you could itemize for us that $6 billion of discretionary CapEx? You have budgeted in ’06, ’07 or ’08 just kind of put that in a bucket for us? A - Susan Tomasky: Yeah, I think it would, let me do ’06. And than we can provide a detail for the other year, if that’s okay with you. Q - David Frank: Sure. A - Susan Tomasky: Yeah, if you go to slide 4 – if you go to page 6, you will see how we look at it. And lets look at slide 4, and lets look at 2006. If you look at the bottom work that’s in orange or Oak. What you see as an environmental compliance stand of $1.5 billion. And that we considered to be really essential capital stand that’s not to say, we could not move an outage. But, we would be very unlikely too, because the compliance plant that we have designed clearly is optimized around this stand, at this point of time. So, we really would not want to that, and must we have surely we had to. Mandated T&D is the combination of two things it’s the completion of Wyoming Jackson ferry line, which we certainly want to do as well as customer connections and basic service issues that are, anything that would not be ONM. And that too, we consider essential. It is the next two categories that we would consider to be our flexible. The ongoing infrastructure replacement and what we call economically justified, to our internal analysis. These are basic improvements and that one include both generation and transmission and distribution. We have coming forward, if you might imagine any number of projects that makes sense for the system that either improve the reliability, that improve -- the functioning improve the generation, reliability, capability, reduction an E for rates, all those sources of activities are in the 1.3 billion. In addition, we have a $191 million in new build and that I would consider to be the most flexible and really the most uncertain of all. What we have done through our integrated resource planning is included the development cost that we have for the IGCC, plus assuming that we are responsible for build activities in the west. As you know we have two RFPs out there to address additional generation, needs of those companies in the west PSO and SWEPCO. And so, there would if both of those bids went to AEP for new build activity then you might see that, stand level, at that level. That is very much in estimate. So, what you really need to do is look at that top two boxes, blue and the green and take that over the next two years, David and you see the same issues. Okay? Q - David Frank: Yeah, I guess what I was trying to figure out is a 6 billion, it seems like a huge number and probably scares a lot of people. What I am trying to figure out is, how much is really discretionary versus just may be discretionary from the timing standpoint and that’s kind of what I was getting at, so it some like really about 3.5 billion of your 3.7 billion of CapEx for ’06 is not discretionary, its may be a little gets move, because of the timing, is that a fair assessment? A - Michael Morris: No, I don’t think so. The way that Susan broke the boxes down for you here David, is that the 2.2 billion in the bottom two boxes is already underway the 1.5 billion on environmental spend in ’06, is well underway. It’s projects that we began in ’04 and ’05. What we believe, mandated T&D, we need to finish Jackson’s ferry, its three quarter’s over 4/5 done. It will be energized on June the 30th, we need obviously complete that project. The distribution, you have no choice in our world and this is true of every utility in the country, one customer will come, you need to hook him up. And we have obviously years and years and years of data over what that is when you get to the blocks, it’s a ongoing infrastructure replacement, economically justified. We are the can of, can’t do that based on how we feel about the return on the capital invested by the regulator, as-well-as whether we do or don’t have enough capital put to work in those activities and than new build generation, we will everything to do with regulatory orders that are supportive of that activity, as Susan mentioned, some of the purple box as you look at ’07 and ’08 is dedicated not only as the integrated gas project, but dedicated to the projects that need to be build in Louisiana and in Oklahoma to serve SWEPCO, as-well-as public service, Oklahoma. We are in front of those commissions today, I had so many other utilities do in the country seeking proposals from other who would build power plant and we have submitted what we would build, if we were the one chosen by the utility regulators. So, those top boxes are extremely flexible. Q - David Frank: Okay, so I guess its going to be the economically justified piece, we are going to have to kind of make an assumption on and a sign of return tour if we give it to you? A - Michael Morris: Right. A - Susan Tomasky: I think that’s right. A - Michael Morris: I think that’s very fair. So, when you look the 6 billion is just there in the math, its 1.5 in ’06, it’s too flat in ’07 and its 2.5 in ’08? Q - David Frank: Okay, all right well thanks a lot. I appreciate that.

Our next question is from Greg Gordon with Citigroup. Please go ahead. Q - Greg Gordon: Thanks, building a little bit on that, when I look at your capital investment found in page on, page 14. I don’t see this assumption of securitization bound posted anywhere in this three year plan and am I right in that doing that math? A - Susan Tomasky: It’s in the debt. Q - Greg Gordon: It’s in the net debt. A - Susan Tomasky: Yep. Q - Greg Gordon: Okay, so you are presuming $1.2 billion to $1.3 billion in cash proceed and that number in ’06? A - Susan Tomasky: Yes for purposes in this plan, yes. Q - Greg Gordon: Okay, great. Mike, as I look, as we sit here and rolled through fiscal year 2006, and we think about those, that the labor discussion you just had with David, on the, will we or won’t we spend the money, which regulatory proceedings and actions should we be focused on that will makes to drive your decision to spend versus not-spend. Where should really focused and when will those decisions be made by the regulator that will in turn cause you to tell Susan it’s okay, to open the wallet A - Michael Morris: Clearly on the new bill lines, you have every thing to do with how, integrate, I guess, filing, the others will be activities built into the infrastructure upgrade for reliability, some of that, will actually might be in Ohio as well as we go forward in the 4% opportunity that is in front of us for calendar of ‘07 and ’08. As well as the determination in West Virginia, where we continue to have reliability investments and as Susan mentioned, some of that comes from the ongoing endeavors in Oklahoma by the regulator in Oklahoma to improve reliability and accessibility in an electric sense for customers in a very riotously area moving to underground from over-heading. So we will watch those filings but the principle one for the chunky dollars are clearly in Ohio and West Virginia. Q - Greg Gordon: So, in Ohio it’s a function of two things then the getting an approval to move forward to IGCC but also managing your cost profile so that you have headroom under that 4% CAP to get a return on the capital, is that right? A - Michael Morris: That’s surely, clearly true in ’07 and ’08. For ‘06, remember, much of the headroom has been taken up by the way that we are proposed to recover the existing cost of the ongoing engineering activity associated with integrated gas combined cycles. So, it’s not a project that, you get to the end and the commission says no and then we have to turn around, say, well we would need to expense $20 million or $40 million that we spent on the way to approval for the project because the way we have filed that those pieces will be covered and we had tremendous support in the application on those activities. So, we are not troubled by that at all, but again, Greg, you are right with the way that you characterized, that’s what you need o watch for. Q - Greg Gordon: Thank you Mike.

Okay, we have a question from Gordon Howald with Natexis, please go ahead. Q - Gordon Howald: Thank you. Hi Mike, Susan. A – Susan Tomasky: Great there. Q - Gordon Howald: hi, could you talk about a little about, how the insulation of your scrubbers at this point of going and any issues that you see at this point of impacting the technical vendors cost extra? A - Michael G. Morris: We couldn’t tell you, how please we are with Mike Rencheck in the team, that is responsible for the implementation of those projects. I would tell you that, almost every instance and Mike just gave me an update on these things. We are bit ahead of schedule, reasonably under the budget or at budget and comfortable with our tight end dates in our operational aspects. We had enough opportunity to do this and it was a bit and just at the last at the EEI financial meeting where you may remember John Wilder mentioned that utilities are not bill chicken coups if they don’t know how, I couldn’t agree with that more. But I am terribly impressed with the ability of this company to do these projects on time under budget. We are getting pressure, as you would expect going forward, the cost to steel is gone up, the cost of concrete is gone up. However many of our contracts will fix priced activities and that’s being consumed by the margin to the supplier rather than by us and our investors or customers long term. So, this is one more time, when American Electric Power distinguishes itself among the utilities. We have a corner, on the manufacturers and that we were the first mover in the space. I would argue, we have corner on the engineering talent, because we were the first mover in the space, and I think, we are seeing the benefit of that as we go forward. Q - Gordon Howald: Now, (indiscernible) seems it working out fine for you. You also mentioned Mike, briefly, or earlier SO2 allowances, could you give us an update on, maybe your strategy from that regarded to the change versus the last year and maybe an update on your emissions book overall. A - Michael Morris: The emissions book is flat, not long, not short. But the strategy remains the same and that is that, we are optimistic or opportunistic, I should say, optimizers of those predecessors we go forward. When you look a period, as you have seen in the early ’06, you clearly not using the credits that you had allocated to your generation fleet. And there are some in the market place who went in bare and they find themselves needing to put credits in their bank. So, we are taking the opportunity to monetize some of those as we go. It has never been nor will it ever being an earnings driver for us, we just think, it’s the appropriate way to manage and extremely valuable asset opportunity as that on occasion presents itself to us. I would love to find somebody in a cold short situation right now, as we find out piles building as days go on and generators don’t runt at full capacity because it’s always to be good a seller, once somebody else is in a pinch. Q - Gordon Howald: That’s understood. Thank you very much appreciate A - Michael Morris: You bet.

And next we will go to Daniel Franks with Dahlman Rose, please go ahead. Q - Daniel Franks: I just was wondering, in most cases when you are recovering the environmental cost expenditure, there is a net effect in the allowance as basically the fuel adjustments cost goes down, is that what happens to customers? A - Michael Morris: Yes Ma’am Q - Daniel Franks: Or you keep some of those benefits? A - Michael Morris: Well, it all depends on how current your fuel adjustment cost is Daniel in those jurisdictions. Many of the areas where that happens, we keeps the benefit as you know, much of that also flows through in the overall activity for off-systems sale as the coal price goes down and the margin then goes up as you are buying a higher softer rather than a lower softer coal. And as you also well know , we do share some of those revenues with our customers so that, the implementation of these activities not only benefits the communities where the plants are located for the environmental improvement, a benefit to the investors because of the return on equity capital invested in the equipment itself but also benefit the customers and the fact that they get some of the flow back realizing lower fuel cost and as we go forward the opportunity to continue to optimize what to do with credit sale no longer needed and we share much of the between the share holders and the customer and so again as again you heard me saying many-many times everybody seems to benefit from this and that’s what we are seeing in the arena as we go forward. Q – Daniel Franks: Then basically the earnings the rates would not go up much as what the construction expenditures seems to so and but you would get return on the investment. A – Michael G Morris: That’s true but I don’t want to negotiate with you like your rate makers, we gradually see that the rate go up to a reasonable rate of return and that keep those other benefits for our share holders but I am a firm believer that the regulator is in the business of balancing the benefits to customers and investors and they have been very good about that in our jurisdictions. Q – Daniel Franks: And let me sure I was wondering you have been participation in the PJM, do you sense that you are getting now the full effect or is there in more benefit expected in that area? A – Michael G Morris: I would, as you know we have talked about just through almost all of calendar ‘05 and again I think the AEP team and commercial operations does distinguish themselves, we fully understand it, we take full opportunity of it, and we were very satisfied with the results that we see from it. Q – Daniel Franks: So, its almost that you will start off with full benefit in the first or current, I mean first year? A – Michael G Morris: I believe that to be the case we’ll slow up the start as you heard but we were moving along and dog years you might remember and graduate degree, diplomas were granted as the end of the year Q – Daniel Franks: And I just was wondering, I remember that they were some transmission rates that had been a adjusted, have they now completely stabilized? A – Michael G Morris: No, we had some very important transmission rate activities go forward in calendar year ‘05 but we continue to still look at the regionalisation of rates through out the PJM and there are that seems elimination charge that you know. Every time we hear any of the FERC commissioners talk about this issue we hear their conversation coming more to the way that we see it which is those who receive a benefit from using what we considered to be the interstate highway paying for that as they go rather than customers in the retail region who are not taking advantage in day-to-day sense of electrons moving from Chicago to New York. So we believe that when we get to the conclusion of this rate activities at the FERC we have potential for upside there is well. Q – Daniel Franks: Do you anticipate this to be relatively soon or it could be trending for a while? A – Michael G Morris: Well it’s clearly an ‘06 event you know in my world soon is now in the regulators world soon is not now, so we bet it is ‘06 event. Q – Daniel Franks: Thanks a lot. A – Michael G Morris: You bet thanks for your questions.

Now we have question from the line of Michael A’ Peters with Golden Banks, please go ahead Q – Michael A ’Peters: Hi, real easy one, on annual basis going forward for the next few years what you expecting as to the increase or decrease in off-systems megawatt hours so? A – Michael Morris: Well we have probably begin to see a slight decrease in the off-systems sales simply because we continue to see although slow pretty steady growth of our retail demand and remember how that fleet works it is all power to the retail customers first from the bottom of the price tag moving up to off-systems sales then when available into the market place. That is part of what of course we see going forward in the 2010 and beyond time frame that our actual retail load will have grown beyond what our generation fleet can do and that’s why we feel so strongly that the commissions need to give us the authority to build additional base load power generation facilities of the clean coal variety that you heard to speak about. Q – Michael A ’Peters: Okay Thank you A – Michael Morris: You bet.

Our final question will come line of Thomas Neil with Citadel Investments please go ahead Q- Thomas Neil: Good morning just curious on Texas kind of given the process and the treatment that you saw if you have any change in there regard so that long term remaining in the state? A – Michael Morris: Tom I would argue that we were treated better than the others I would tell you however that we are very disappointed in the E-com deliberations, I think that Commissioners Smitherman exactly right, as it pertains to that and that would be part of ,if fact the final decision is along the lines of the final discussion, that would be the one issue that we would carry forward, with strong feelings about our appeal and our palate opportunities. In short of that we continue to have reasonable dialogues with the Texas commissions as you know we feel comfortable with the Oka transmission a rate recovery process and continue to feel strong about being a participant in the Texas market place as we go forward. You know one of my favorite bumper stickers in life was that I was born was in Texas but I moved here sooner I heard about it, the fact remains we are happy to do business there and we will continue and try to improve the relationship with the regulatory board that the PUCT as well with the OKA regulator. Q - Thomas Neil: Good and Thanks A – Michael Morris: You bet. Thanks for your questions, Julie Julie Sloat, Vice President, Investor Relations: Thank you for joining us today the IR staff be available for you and have a good day, thanks.

Ladies and Gentlemen this conference is available for replay it starts about 2:30 pm Eastern and will last until February 8th at midnight, you may access the replay at any time but now in 1800-4756701 international parties please dial 320-365-3844 the access code is 813456, those numbers again 1800-4756701, international parties 320-365-3844 the access code for conference is 813456, that does concludes your conference for today thank you for your participation and you may now disconnect