AMERICAN ELECTRIC POWER COMPANY, INC. Last summer, AEP dispatched  hundreds of employees and  contractors to Florida to assist  utilities ravaged by several  hurricanes. AEP uses more coal than anyone else in the nation  – some 75 mil- lion tons annually on average. Approximately 73 percent of our 36,000-megawatt  generating capacity is fired by coal and lignite. Continued use of coal is impor- tant for the energy security and economy of our nation, and for the interests of our  stakeholders. Keeping coal as a viable energy option will require advanced technolo- gies. That is why we are continuing our tradition of technological innovation by  pioneering construction of the largest Integrated Gasification Combined Cycle  (IGCC) plant in the world. We announced this  clean-coal project  last year and  will finalize site selection and seek cost recovery in 2005. We anticipate comple- tion by 2010. While other companies remain focused on supercritical coal-fired genera- tion – pioneered by AEP nearly 50 years ago – we are moving to the next level of  generation technology. We believe increasingly stringent air-quality regulations and the possibility  of eventual constraints on carbon dioxide emissions make IGCC the right invest- ment and the most environmentally responsible choice for future coal-fired gen- eration. IGCC technology has the potential to provide the environmental benefits  of a high-efficiency, natural gas-fired, combined-cycle facility while capitalizing  on the comparatively low and stable fuel costs associated with coal. I invite you to  read more about IGCC technology later on in this report. AEP also expects to invest approximately $3.7 billion through 2010 and an- other $1.5 billion through 2020 in  improvements at our existing coal-fired  plants.  This will extend their productive lives, keep them operating profitably  and improve air quality for those living nearby. Technology already in place at  some AEP plants will be added to other facilities to reduce emissions of sulfur  dioxide, nitrogen oxide and mercury. AEP has invested roughly $2 billion in en- vironmental enhancements at our generating facilities since the mid-1990s. Even after electric rates that allow us to recover our planned expenditures  are approved, our customers’ costs will remain among the lowest in the regions  we serve. AEP also will stay competitive in wholesale power markets. These are  enormous advantages that we intend to keep. AEP will continue as an industry leader in addressing global climate change.  As a founding member of the Chicago Climate Exchange, the first voluntary  platform for trading greenhouse gas emission credits, we have committed to re- duce or offset greenhouse gas emissions a cumulative 10 percent between 2003  and 2006. This is in addition to our widely recognized tree-planting program and  our efforts to preserve forests to sequester carbon dioxide. A diverse fuel mix that includes renewable energy is important for our na- tion and our company. AEP operates nearly 900 megawatts of hydroelectric gen- eration and is one of the largest generators of wind energy in the United States  with more than 300 megawatts operating in Texas. We are exploring opportuni- AEP has invested roughly $2 billion in environmental  enhancements at our  generating facilities since  the mid-1990s. 4