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AMERICAN ELECTRIC POWER INTENSIFIES COST REDUCTION PROGRAM

 AMERICAN ELECTRIC POWER INTENSIFIES COST REDUCTION PROGRAM
 COLUMBUS, Ohio, Nov. 5 /PRNewswire/ -- American Electric Power Co. (AEP) (NYSE: AEP) today announced a major cost-control program that could result in the elimination of as many as 500 jobs across its Ohio operations.
 The program outlines plans to combine certain operations of its two Ohio utilities, Columbus Southern Power and Ohio Power, and to downsize operations at the Columbus-based American Electric Power Service Corporation (AEPSC) headquarters.
 The company has entered a "new era in the power business," according to Richard E. Disbrow, AEP chairman and chief executive officer. "For the first time in decades the company does not have a new generating plant under construction. This requires that we examine the composite of work to be done and how we do it. Today's announcement reflects a planned examination of all aspects of our operations."
 Disbrow said the evaluation will be directed by E. Linn Draper, Jr., AEP president.
 The effort to combine operations will focus on Columbus Southern's Columbus headquarters and Ohio Power's Canton headquarters, where the most potential for duplication of services exists. Ohio Power has about 700 employees on its headquarters staff based in Canton and Columbus Southern has about 600 employees in that category in Columbus.
 The focus at AEPSC, the management and service arm of the seven- state AEP system, will be on realignment or possible elimination of certain services provided to AEP operating companies.
 Disbrow cited the modest growth in demand for new electrical generation, strict environmental regulations and an increasingly competitive electricity market as reasons to re-examine its operational structure.
 "We must make sure that we remain a reliable, low-cost provider despite challenging economic times," Disbrow said. Work is beginning immediately on the cost reduction programs, which are expected to be completed in 12 to 14 months.
 "We intend to accomplish some staff reductions through attrition and previously improved retirement benefits. However, it also will be necessary to eliminate some positions," Disbrow said. A special severance package will be arranged for affected employees.
 Operations of Ohio Power and Columbus Southern will continue to be directed by their respective presidents, Charles A. Heller, Jr. and Thomas R. McCaffrey.
 Employee teams, representing both companies and AEPSC, will begin immediately examining functions in their respective areas of expertise to combine operations and identify cost-effective opportunities.
 "No one knows our business better than our employees," Disbrow said. "They will play an integral role throughout the study."
 Towers Perrin, an international management consulting firm, will assist the employee teams in the evaluation of work activities.
 "The operational combination of these two companies is a natural step," Disbrow said. "Columbus Southern was acquired by AEP in 1980. It has been restructured to be organizationally compatible with AEP's other operating companies. This leads to the obvious conclusion that greater efficiencies could be achieved by combining certain functions of Ohio Power and Columbus Southern.
 "Columbus Southern and Ohio Power have rates among the lowest in the state of Ohio and well below the national average. The combination of these two companies will help us to continue to provide reliable, low- cost service to our customers. However, we are sensitive to the economies of Canton and Columbus and expect to maintain a significant presence in both communities."
 Disbrow said the AEP System has already taken steps to reduce costs through such means as budget cuts, a hiring freeze, and travel restrictions. In addition, the sale of the company's Martinka Mine, coupled with restructuring at the Meigs Mines and Lancaster headquarters, resulted in significant downsizing at AEP's Fuel Supply Department.
 AEP is a public utility holding company with seven electric utility operating companies serving seven million people in parts of seven East- Central states -- Ohio, Indiana, Michigan, Virginia, West Virginia, Kentucky and Tennessee.
 Columbus Southern Power serves a 6,209-square-mile area, including Columbus, Upper Arlington, Gahanna, Reynoldsburg, Chillicothe, Athens, Whitehall, Delaware, Grove City, Dublin, Worthington, Hilliard, Circleville.
 Ohio Power serves a 7,386-square-mile area including Canton, Lima, Newark, Findlay, Lancaster, Zanesville, Portsmouth, Wooster, Steubenville, Tiffin, Fremont, New Philadelphia, Fostoria, North Canton, Mt. Vernon, East Liverpool, Bucyrus, Ironton, Coshocton, Cambridge and Van Wert.
 -0- 11/5/92
 /CONTACT: Luke M. Feck, American Electric Power, 614-223-1674/
 (AEP) CO: American Electric Power ST: Ohio IN: UTI SU:


BM -- CL021 -- 7844 11/05/92 15:24 EST
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Date:Nov 5, 1992
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