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Press release from PR Newswire

PATH Seeks to Withdraw Applications for Electric Transmission Project

Monday, February 28, 2011

PATH Seeks to Withdraw Applications for Electric Transmission Project12:22 EST Monday, February 28, 2011Regional grid operator directs suspension of PATH projectCOLUMBUS, Ohio and AKRON, Ohio, Feb. 28, 2011 /PRNewswire/ -- American Electric Power (NYSE: AEP) and FirstEnergy Corp. (NYSE: FE) today announced their affiliates will file to withdraw their applications for state regulatory approval of the Potomac-Appalachian Transmission Highline (PATH) project following an announcement by regional grid operator PJM Interconnection that the project has been suspended.PATH is a joint venture between the former Greensburg, Pa-based Allegheny Energy and AEP to build a 765-kilovolt, 275-mile transmission project from Putnam County, W.Va., to Frederick County, Md.  Allegheny merged with Akron-based FirstEnergy, effective February 25, 2011. Today's filings in Virginia, Maryland and West Virginia are in response to a directive by regional grid operator PJM Interconnection to suspend further development of the PATH project while PJM conducts a more rigorous analysis of the potential need for PATH as part of its continuing Regional Transmission Expansion Plan.  PJM directed the construction of PATH in 2007 to resolve violations of national and local standards for reliable operation of the region's transmission system.  Since then, annual studies reaffirmed the need for PATH as the recommended solution for resolving these issues.  However, PJM's latest analyses indicate that the projected need for the project has moved well into the future.PJM has indicated that it will undertake an evaluation of its planning methods through a stakeholder process.  This process will evaluate the criteria used to determine the need for transmission projects under its Regional Transmission Expansion Plan, and determine whether the need for PATH should be re-evaluated in light of any approved revisions to its planning process.  Once this process is complete, PJM will reassess the need for transmission expansion in the region.  Until then, the PATH companies will immediately suspend most activities on the project except for those that may be necessary to return the project to active status at the conclusion of PJM's planning process review.  Prior to its recently completed merger with FirstEnergy, Allegheny Energy was a publicly traded, diversified energy company with more than $3 billion in annual revenue. First EnergyFirstEnergy is a diversified energy company dedicated to safety, reliability and operational excellence. Its ten electric distribution companies comprise the nation's largest investor-owned electric system. Its diverse generating fleet features non-emitting nuclear, scrubbed baseload coal, natural gas, and pumped-storage hydro and other renewables, and has a total generating capacity of approximately 24,000 megawatts. American Electric PowerAmerican 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. Visit AEP on the web at www.aep.com. Forward-Looking Statements: This news release includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements include declarations regarding management's intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms "anticipate," "potential," "expect," "believe," "estimate" and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual results may differ materially due to the speed and nature of increased competition in the electric utility industry; the impact of the regulatory process on the pending matters in the various states in which we do business (including, but not limited to, proceedings related to rates and matters with respect to the TrAIL and PATH Projects), business and regulatory impacts from American Transmission Systems, Incorporated's realignment into PJM Interconnection, L.L.C., economic or weather conditions affecting future sales and margins, changes in markets for energy services, changing energy and commodity market prices and availability, the impact of coal inventories that are outside of optimal levels, financial derivative reforms that could increase our liquidity needs and collateral costs, replacement power costs being higher than anticipated or inadequately hedged, the continued ability of FirstEnergy's regulated utilities to collect transition and other charges or to recover increased transmission costs, operating and maintenance costs being higher than anticipated, other legislative and regulatory changes (including those that could effect generating plant operations), revised environmental requirements, including possible greenhouse gas emission and coal combustion regulations, the potential impacts of the U.S. Court of Appeals' July 11, 2008 decision requiring revisions to the Clean Air Interstate Rules and the scope of any laws, rules or regulations that may ultimately take their place, the uncertainty of the timing and amounts of the capital expenditures needed to, complete the TrAIL and PATH Projects, (including that such amounts could be higher than anticipated), or levels of emission reductions related to the Consent Decree resolving the New Source Review litigation or other similar potential regulatory initiatives or actions, adverse regulatory or legal decisions and outcomes (including, but not limited to, the revocation of necessary licenses or operating permits and oversight) by the Nuclear Regulatory Commission, any impact resulting from the receipt by Signal Peak of the Department of Labor's notice of a potential pattern of violations at Bull Mountain Mine No. 1, Metropolitan Edison Company's and Pennsylvania Electric Company's transmission service charge filings with the Pennsylvania Public Utility Commission, the continuing availability of generating units and their ability to operate at or near full capacity, the ability to comply with applicable state and federal reliability standards and energy efficiency mandates, changes in customers' demand for power, including but not limited to changes resulting from the implementation of state and federal energy efficiency mandates, the ability to accomplish or realize anticipated benefits from strategic goals (including employee workforce initiatives), the ability to improve electric commodity margins and the impact of, among other factors, the increased cost of coal and coal transportation on such margins and the ability to experience growth in the distribution business, the changing market conditions that could affect the value of assets held in FirstEnergy's nuclear decommissioning trusts, pension trusts and other trust funds, and cause it to make additional contributions sooner, or in an amount that is larger than currently anticipated, the ability to access the public securities and other capital and credit markets in accordance with FirstEnergy's financing plan and the cost of such capital, changes in general economic conditions affecting the company, the state of the capital and credit markets affecting the company, interest rates and any actions taken by credit rating agencies that could negatively affect FirstEnergy's access to financing or its costs or increase its requirements to post additional collateral to support outstanding commodity positions, letters of credit and other financial guarantees, the continuing uncertainty of the national and regional economy and its impact on the company's major industrial and commercial customers, issues concerning the soundness of financial institutions and counterparties with which FirstEnergy does business, issues arising from the recently completed merger of FirstEnergy and Allegheny Energy, Inc. and the ongoing coordination of their combined operations including, FirstEnergy's ability to maintain relationships with customers, employees or suppliers and successfully integrate the businesses and realize cost savings and other synergies and the impact of those efforts on the credit ratings of the combined company and its subsidiaries, and the risks and other factors discussed from time to time in its Securities and Exchange Commission filings, and other similar factors. The foregoing review of factors should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on FirstEnergy's business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. FirstEnergy expressly disclaims any current intention to update any forward-looking statements contained herein as a result of new information, future events, or otherwise.SOURCE American Electric PowerFor further information: Doug Colafella of FirstEnergy Corp., +1-724-838-6387, dcolafe@alleghenyenergy.com, or Melissa McHenry of American Electric Power, +1-614-716-1120, mamchenry@aep.com