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OHIO POWER COMPANY OBTAINS EMISSION ALLOWANCES, AEP HOPES TO REDUCE CLEAN AIR COMPLIANCE COSTS UP TO 15 PERCENT

 COLUMBUS, Ohio, March 31 /PRNewswire/ -- American Electrical Power (NYSE: AEP) today learned that it has won more SO2 emission allowances than it had assumed it would in plans to comply with Phase I of the Clean Air Act in 1995.
 The emission allowances, obtained through a lottery today at the U.S. Environmental Protection Agency are intended to help the AEP System to meet requirements of the Clean Air Act while flue gas scrubbers are under construction at the Gavin plant of Ohio Power, an AEP operating company.
 The receipt of more allowances than originally assumed, along with an aggressive construction effort, favorable weather, mehat AEP should be able to


reduce the effective costs of scrubbing substantially, said AEP Chairman and Chief Executive Officer Richard E. Disbrow.
 "We now believe the ultimate cost of AEP's systemwide compliance effort may be reduced by as much as 15 percent below the cost estimates used last year," Disbrow said.
 "The Gavin scrubber project was part of a least-cost compliance strategy, which was approved by the Public Utilities Commission of Ohio, based on earlier estimates. Now we believe overall compliance costs will be even lower, based on new developments and estimates," Disbrow said.
 The Clean Air Act allows utilities which plan to scrub in Phase I of the acid rain program to acquire extension allowances (One allowance is the right to emit one ton of SO2.) through the lottery. The allowances effectively extend the deadline for the scrubbed power plant's compliance from the normal Phase I deadline of Jan. 1, 1995, until Jan. 1, 1997.
 Fifteen of the 16 utilities who entered the lottery for allowances, including Ohio Power, agreed to pool their allowances together. That assured those in the pool that they would not be cut off from extension allowances in the event that the demand for EPA extension allowances would be more than the supply of allowances available and they "lost" in the lottery.
 After the lottery and effects of the pooling of allowances, Ohio Power believes it will receive about 750,000 Phase I extension allowances. That is about 88 percent of the total allowances Ohio Power sought for the scrubber project, and more than the 577,890 allowances the company's cost estimates contained in the Acid Rain Compliance Plan approved by the PUCO.
 "Our success in the lottery and allowance pooling arrangements, along with a reduction in scrubber construction costs and low interest rates means the costs of complying with the Clean Air Act should be substantially lower for our customers than we had originally projected," Disbrow said. "This further supports our analysis, which was approved by the PUCO, that this compliance plan is a lowest-cost strategy."
 -0- 3/31/93
 /CONTACT: Luke M. Feck, senior vice president, public affairs, American Electric Power, 614-223-1650/
 (AEP)


CO: American Electric Power ST: Ohio IN: UTI SU:

DA -- CL021 -- 1721 03/31/93 17:21 EST
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Publication:PR Newswire
Date:Mar 31, 1993
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