AEP Selects IBM as Systems Integrator for gridSMART(SM) Initiative

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ARMONK, NY - 25 Nov 2008: American Electric Power (AEP) (NYSE: AEP) has selected IBM (NYSE: IBM) as the overall systems integrator for gridSMART(SM), AEP's comprehensive suite of customer programs and advanced technology initiatives that create the energy delivery system of the future.

The gridSMART initiative includes customer programs, new energy delivery system technologies, local generation and storage devices, and additional efficiency enhancements.

The agreement will add IBM's broad capabilities in designing and implementing Intelligent Utility Networks to AEP's initiative.

IBM will provide AEP with support services across the program, including program management, business process design, systems planning, and system interfaces. The agreement also leverages IBM's unique capabilities in research, software and IT infrastructure, enabling AEP to take advantage of IBM's global investments in developing Intelligent Utility Network solutions.

AEP's gridSMART initiative is among the first in the industry to introduce intelligence across the entire transmission and distribution system. Among the benefits expected for customers are: fewer outages, improved service and reliability, and the ability to better manage their energy use. Benefits for AEP include: planning and operating its system more efficiently, increased service quality, proactive outage notification capabilities, and enabling future technology advancements as they develop.

IBM joins an AEP gridSMART team that will implement advanced customer service, energy delivery and metering technologies across the nation's largest electricity transmission system, and a distribution system that delivers electricity to more than 5 million customers in 11 states.

"IBM's commitment to the development of a smarter electricity grid aligns with the activities we already have underway," said Michael G. Morris, AEP's chairman, president and chief executive officer. "Combining our own expertise on utility operations with IBM's expertise and experience in systems integration will bring the implementation of systems that best meet our customers' needs."

Initially, the gridSMART initiative will focus on four projects:

"AEP's wide-ranging initiative is one of the world's best examples of how an Intelligent Utility Network can fundamentally transform the way power is distributed and used," says Guido Bartels, IBM's General Manager, Global Energy & Utilities Industries. "We also see it as a further demonstration of IBM's continued efforts to bring innovative solutions to the global challenges in energy and the environment."

Future phases of gridSMART will take AEP further towards the Intelligent Utility Network introducing additional enhancements to the network, including installation of smart meters for all AEP customers by 2015; development of fuel cells, large-scale batteries and other distributed energy technologies; and support for emerging electric hybrid vehicles.

About AEP
American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation's largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation's largest electricity transmission system, a nearly 39,000-mile network that includes more 765-kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP's transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP's utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP's headquarters are in Columbus, Ohio.

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