2017 AEP Fact Book 52Nd EEI Financial Conference

2017 AEP Fact Book 52nd EEI Financial Conference

November 5-8, 2017 Lake Buena Vista, Florida

52nd EEI Financial Conference | aep.com 0 “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its Registrant Subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: the economic growth or contraction within and changes in market demand and demographic patterns in our service territories, inflationary or deflationary interest rate trends, volatility in the financial markets, particularly developments affecting the availability or cost of capital to finance new capital projects and refinance existing debt, the availability and cost of funds to finance working capital and capital needs, particularly during periods when the time lag between incurring costs and recovery is long and the costs are material, electric load and customer growth, weather conditions, including storms and drought conditions, and our ability to recover significant storm restoration costs, the cost of fuel and its transportation, the creditworthiness and performance of fuel suppliers and transporters and the cost of storing and disposing of used fuel, including coal ash and spent nuclear fuel, availability of necessary generation capacity, the performance of our generation plants and the availability of fuel, including processed nuclear fuel, parts and service from reliable vendors, our ability to recover fuel and other energy costs through regulated or competitive electric rates, our ability to build transmission lines and facilities (including our ability to obtain any necessary regulatory approvals and permits) when needed at acceptable prices and terms and to recover those costs, new legislation, litigation and government regulation, including oversight of nuclear generation, energy commodity trading and new or heightened requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances that could impact the continued operation, cost recovery and/or profitability of our generation plants and related assets, evolving public perception of the risks associated with fuels used before, during and after the generation of electricity, including nuclear fuel, a reduction in the federal statutory tax rate could result in an accelerated return of deferred federal income taxes to customers, timing and resolution of pending and future rate cases, negotiations and other regulatory decisions, including rate or other recovery of new investments in generation, distribution and transmission service and environmental compliance, resolution of litigation, our ability to constrain operation and maintenance costs, our ability to develop and execute a strategy based on a view regarding prices of electricity and gas, prices and demand for power that we generate and sell at wholesale, changes in technology, particularly with respect to energy storage and new, developing, alternative or distributed sources of generation, our ability to recover through rates any remaining unrecovered investment in generation units that may be retired before the end of their previously projected useful lives, volatility and changes in markets for capacity and electricity, coal and other energy-related commodities, particularly changes in the price of natural gas, changes in utility regulation and the allocation of costs within regional transmission organizations, including ERCOT, PJM and SPP, our ability to successfully and profitably manage our competitive generation assets, including the evaluation and execution of strategic alternatives for these assets as some of the alternatives could result in a loss, changes in the creditworthiness of the counterparties with whom we have contractual arrangements, including participants in the energy trading market, actions of rating agencies, including changes in the ratings of our debt, the impact of volatility in the capital markets on the value of the investments held by our pension, other postretirement benefit plans, captive insurance entity and nuclear decommissioning trust and the impact of such volatility on future funding requirements, accounting pronouncements periodically issued by accounting standard-setting bodies and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes, cyber security threats and other catastrophic events.

Bette Jo Rozsa Darcy Reese INVESTOR RELATIONS Managing Director Director Investor Relations Investor Relations 614-716-2840 614-716-2614 [email protected] [email protected]

52nd EEI Financial Conference | aep.com 1 TABLE OF CONTENTS AEP Overview Operating Company Detail for: AEP: The Premier Regulated Energy Company Appalachian Power Company (including Wheeling & Kingsport) AEP Corporate Leadership Indiana Michigan Power Company AEP Operational Structure Kentucky Power Company AEP Service Territory Ohio Power Company 2016 Retail Revenue Public Service Company of Oklahoma Generation Fleet Southwestern Power Company Transmission Line Circuit Miles Detail AEP Texas Distribution Line Detail Rate Base & ROEs Regulated Generation Summary of Rate Case Filing Requirements Regulated Generation Summary Retail Recovery Mechanisms by Jurisdiction Owned Regulated Generation Storm O&M Recovery Mechanisms by Jurisdiction Regulated Fuel Procurement – 2018 Projected Jurisdictional Off-System Sales Sharing Summary Regulated Coal Delivery – 2018 Projected Commission Overview Jurisdictional Fuel Clause Summary

Transforming Our Generation Fleet Transmission Initiatives Transforming Our Generation Fleet AEP Transmission Holdco Legal Entity Structure Investments Driving Emission Reductions AEP Transco Business Overview Dramatic Reductions in Emissions AEP Transco Project Mix & Footprint Large-scale Renewable Opportunities Transmission Investment Needs Delivering Clean Energy Resources Transco State & FERC Regulatory Compacts Renewable Resources FERC Formula Rate & Filings Renewable Portfolio/Energy Efficiency Standards Active Joint Venture Projects Regulated & Competitive Retirements Competitive Transmission – Transource Regulated Environmental Controls Grid Assurance Executive Summary & Timeline Competitive Environmental Controls BOLD Strategy Additional Environmental Regulations Evolution of Transmission Trackers Favorable Recovery of Transmission Investment Financial Update Capitalization & Liquidity Contracted Renewables & Other Pension & OPEB Estimates Organizational Structure AEP Banking Group Contracted Renewables AEP Credit Ratings Competitive Generation – Owned & PPA Long-Term Debt Maturity Profile Competitive 2016 Fleet Statistics Debt Schedules Retail – AEP Energy

52nd EEI Financial Conference | aep.com 2 AEP: THE PREMIER REGULATED ENERGY COMPANY

American Electric Power is one of the largest electric utilities in the United States, delivering electricity and custom energy solutions to nearly 5.4 million customers in 11 states. AEP’s headquarters is in Columbus, Ohio. (NYSE: AEP)

AEP’s regulated electric assets AEP consistently produces strong include the following: financial results:

 Approximately 23,000 megawatts of regulated  Expecting operating earnings growth of owned generating capacity and approximately 5% to 7%. 4,800 megawatts of regulated PPA capacity in  Strong balance sheet including $64 billion of 3 RTOs. assets.  Approximately 40,000 circuit miles of  Cash dividend paid every quarter since 1910. transmission lines, including more than 1,150 Dividend payout ratio of 60 % to 70% of miles of Transco lines and over 2,100 miles of operating earnings and growing dividend in 765kV lines, the backbone of the electric line with earnings. interconnection grid in the Eastern U.S.  AEP Transco has approximately $4.7B of transmission assets in service with additional capital expenditure plans of approximately $4.3B from 2018 – 2020.  Approximately 219,000 miles of overhead and underground distribution lines.

WELL POSITIONED AS A REGULATED BUSINESS

52nd EEI Financial Conference | aep.com 3 AEP CORPORATE LEADERSHIP

Nicholas K. Akins Chairman, President and Chief Executive Officer

Brian X. Tierney Lisa M. Barton Executive Vice President Executive Vice President – and Chief Financial Officer Transmission

Paul Chodak III Lana L. Hillebrand Mark C. McCullough Executive Vice President – Executive Vice President Executive Vice President – Utilities and Chief Administrative Generation Officer

Charles R. Patton Charles E. Zebula Executive Vice President – Executive Vice President – External Affairs Energy Supply

David M. Feinberg Executive Vice President, General Counsel and Secretary

52nd EEI Financial Conference | aep.com 4 AEP OPERATIONAL STRUCTURE*

AEP, Inc.

Regulated Utilities AEP Transmission Holding Competitive Operations Company

Indiana Michigan Power AEP Transmission AEP Energy Supply Appalachian Power Joint Ventures Company Company Company

AEP Appalachian AEP Energy Kentucky Power Public Service Company Transco Company of Oklahoma

AEP Energy Partners AEP Kentucky Transco Southwestern Electric Ohio Power Company Power Company AEP Generation AEP Southwestern Resources Transco

Wheeling Power Kingsport Power Company Company AEP Ohio Transco AEP OnSite Partners

AEP Generating AEP Texas AEP Renewables Company AEP Oklahoma Transco

AEP Indiana Michigan Transco

AEP West Virginia Transco * Does not represent legal structure

52nd EEI Financial Conference | aep.com 5 AEP SERVICE TERRITORY

VERTICALLY INTEGRATED UTILITIES

Public Service Company of Oklahoma (PSO) Appalachian Power Company (APCo) Southwestern Electric Power Company (SWEPCo) Indiana Michigan Power Company (I&M) Kingsport Power Company (KGPCo) Kentucky Power Company (KPCo) Wheeling Power Company (WPCo) Oklahoma

Arkansas

Michigan

West Virginia Louisiana Indiana Texas Virginia Kentucky

Tennessee

52nd EEI Financial Conference | aep.com 6 AEP SERVICE TERRITORY

TRANSMISSION AND DISTRIBUTION UTILITIES

AEP Texas Ohio Power Company (OPCo)

Texas Ohio

52nd EEI Financial Conference | aep.com 7 2016 RETAIL REVENUE CUSTOMER PROFILE AEP’S SERVICE TERRITORY ENCOMPASSES APPROXIMATELY 5.4 MILLION CUSTOMERS IN 11 STATES

Percentage of AEP System Retail Revenues Percentage Composition by Customer Class *

Arkansas 2% 5% 12% 13% Indiana

Kentucky 19% 5% 13% Louisiana Residential 4% Michigan Commercial 2% Ohio 48% Industrial Oklahoma Wholesale 14% Tennessee Texas 1% 26% 28% Virginia 8% West Virginia

Top 10 Industrial Sectors Across the AEP System By % of Total NAICS Code Industrial Sales 331 Primary Metal Manufacturing 14.3% 325 Chemical Manufacturing 13.1% 324 Petroleum and Coal Products Manufacturing 11.8% 486 Pipeline Transportation 7.9% 322 Paper Manufacturing 6.6% 211 Oil and Gas Extraction 5.8% 212 Mining (except Oil and Gas) 5.6% 326 Plastics and Rubber Products Manufacturing 5.6% Source: 2016 10-K 336 Transportation Equipment Manufacturing 4.6% * Note: Figures do not include Other Revenues 311 Food Manufacturing 4.5%

52nd EEI Financial Conference | aep.com 8 GENERATION FLEET Competitive - 2017 Generation Capacity Regulated - 2017 Generation Capacity by Fuel Type by Fuel Type Based on 3,311 MW* Based on 29,771 MW** Coal/Lignite - Controlled Coal/Lignite - Controlled 43.5% 80.3% Natural Gas 30.2%

Hydro, Wind, Solar, & Pumped Storage 19.7% Hydro, Wind, Solar, & *Includes 177 MW of Pumped Storage 11.9% wind PPA. Excludes 355 MW of PPA for Nuclear 7.7% AEP Texas North’s portion of Oklaunion. Demand Response/Energy Efficiency 6.8% Total Fleet - 2017 Generation Capacity **Includes: by Fuel Type • 953 MW of OVEC entitlement Based on 33,082 MW*** • 2,512 MW of renewable PPAs • 1,149 MW of gas PPAs Coal/Lignite - • 355 MW for AEP Texas North’s Controlled 47.2% portion of Oklaunion • 2,021 MW of Demand Response / Natural Gas 27.2% Energy Efficiency Programs ***Includes: • 953 MW of OVEC entitlement Hydro, Wind, Solar, & • 2,898 MW of renewable PPAs Pumped Storage 12.7% • 1,149 MW of gas PPAs • 355 MW for AEP Texas North’s Nuclear 6.9% portion of Oklaunion • 2,021 MW of Demand Response / Energy Efficiency Programs Demand Response/Energy Efficiency 6.1%

52nd EEI Financial Conference | aep.com 9 TRANSMISSION LINE CIRCUIT MILES DETAIL

Operating Company Level (Circuit Miles)

Operating 765kV 500kV 345kV 230kV 161kV 138kV 115kV 88kV 69kV 46kV 40kV 34.5kV 23kV Total Company APCo 732 95 381 107 0 2,833 0 37 980 730 0 155 0 6,050 OPCo 507 0 1,354 0 0 3,214 0 0 2,260 0 53 417 61 7,866 I&M 616 0 1,618 0 0 1,671 0 0 681 0 0 577 0 5,163 KGPCo 0 0 0 0 0 44 0 0 0 0 0 29 0 73 KPCo 257 0 8 0 48 358 0 0 428 166 0 3 0 1,268 PSO 0 0 608 34 8 1,990 10 0 621 0 0 0 0 3,271 SWEPCo 0 0 736 0 305 1,459 29 0 1,572 0 0 0 0 4,101 AEP Texas 0 0 855 0 0 3,891 0 0 3,654 0 0 0 0 8,400 WPCo 0 16 16 0 0 194 0 0 86 0 0 0 0 312 Transco - IM 15 0 23 0 0 14 0 0 61 0 0 17 0 130 Transco - Ohio 1 0 118 0 0 187 0 0 196 0 3 6 21 532 Transco - OK 0 0 1 0 0 102 0 0 0 4 0 0 0 107 Transco - WV 0 0 0 0 0 229 0 0 155 0 0 0 0 384 Total 2,128 111 5,718 141 361 16,186 39 37 10,694 900 56 1,204 82 37,657

State Level (Circuit Miles)

State 765kV 500kV 345kV 230kV 161kV 138kV 115kV 88kV 69kV 46kV 40kV 34.5kV 23kV Total Arkansas 0 0 78 0 305 249 13 0 445 0 0 0 0 1,090 Indiana 615 0 1,408 0 0 1,450 0 0 443 0 0 478 0 4,394 Kentucky 257 0 8 0 48 358 0 0 428 166 0 3 0 1,268 Louisiana 0 0 105 0 0 285 1 0 328 0 0 0 0 719 Michigan 16 0 234 0 0 235 0 0 298 0 0 115 0 898 Ohio 509 0 1,472 0 0 3,359 0 0 2,454 0 56 424 82 8,356 Oklahoma 0 0 650 34 8 2,244 10 0 776 0 0 0 0 3,722 Tennessee 0 0 0 92 0 154 0 0 2 0 0 29 0 277 Texas 0 0 1,365 0 0 4,791 15 0 4,455 0 0 0 0 10,626 W. Virginia 382 16 329 0 0 1,448 0 37 437 686 0 57 0 3,392 Virginia 349 95 69 15 0 1,613 0 0 628 48 0 98 0 2,915 Total 2,128 111 5,718 141 361 16,186 39 37 10,694 900 56 1,204 82 37,657

Note: Transmission line circuit miles are current as of 12/31/16; excludes ETT, OVEC and Joint Ventures

52nd EEI Financial Conference | aep.com 10 DISTRIBUTION LINE DETAIL

By Operating By State Line Miles* Company Line Miles*

Total 218,905 Total 218,905

* Includes approximately 34,000 miles of underground circuit miles

Note: Year End 2016 data per Small World Graphics.

52nd EEI Financial Conference | aep.com 11 RATE BASES & ROEs Vertically Integrated Utilities Pro Forma Rate Operating2 Earned ROE Approved Approved Effective Date of last approved Jurisdiction Base1 as of 9/30/2017 ROE Debt/Equity rate case 1 ($ millions) Rate base represents Net Utility Plant APCo-Virginia 10.40%* 57/43 2/2/15 plus Regulatory Assets less Net APCo-West Virginia/WPCo 9.75% 53/47 5/27/15 Accumulated Deferred Income Taxes and APCo - FERC 11.06% 54/46 6/1/16 APCo/WPCo Total $8,220 8.4% less Regulatory Liabilities from 2016 FERC Form 1. Kingsport Power - Tennessee 9.85% 58/42 8/9/16 2 KgPCo- TN Total $106 8.5% Operating ROE adjusts GAAP results by eliminating any material nonrecurring items KPCo -Distribution/Generation 10.25% 56/44 7/1/15 KPCo-Kentucky Total $1,663 4.5% and is not weather normalized. 12-month rolling ROE. I&M-Indiana 10.20% 48/52 2/28/13 3 I&M-Michigan 10.20% 49/51 3/29/12 Represents the midpoint of the ROE I&M - FERC 10.81% 44/56 6/1/16 range approved in the formula rate case I&M Total $4,713 8.4% settled in February 2014.

PSO- Distribution/Generation 9.50% 56/44 1/15/16 PSO-Oklahoma Total $2,840 6.1% 4 ROE is 11.1% adjusted for SEET items.

3 SWEPCO-Louisiana 10.00% 48/52 8/1/15 SWEPCO-Arkansas 10.25% 54/46 11/24/09 * 10.4% Allowed top of band, 70 BPS SWEPCO-Texas 9.65% 51/49 1/29/13 above authorized 9.7%, as approved in SWEPCO - FERC 11.10% 50/50 1/1/16 2014. Base rates subsequently frozen in SWEPCO Total $4,902 5.9% VA by the Feb. 2015 Rate Freeze Law. A

Transmission and Distribution Companies 9.4% ROE was approved in October 2016 Proforma Rate Operating2 Earned ROE Approved Approved Effective Date of last approved Jurisdiction Base1 to be applied to Rate Adjustment Clauses as of 9/30/2017 ROE Debt/Equity rate case ($ millions) (RACS) only. AEP Ohio - Distribution** 10.20% 52/48 2/25/15 AEP Ohio - Transmission 11.49% 50/50 7/1/16 4 ** Per ESP III Order . AEP Ohio Total $4,569 12.6% Chart excludes AEG's Rockport plant AEP Texas Central $2,881 9.96% 60/40 5/29/07 AEP Texas North $1,168 9.96% 60/40 3/4/08 investment. AEG sells capacity & energy AEP Texas Total $4,049 10.3% to I&M and KPCo under a PPA. Transcos Proforma Rate Operating2 Earned ROE Approved Approved Effective Date of last approved Company Base1 as of 9/30/2017 ROE Debt/Equity formula rate filing ($ millions) AEP Ohio Transco $1,827 14.0% 11.49% 50/50 7/1/16 AEP Kentucky Transco $63 10.8% 11.49% 50/50 7/1/16 AEP Indiana Michigan Transco $1,048 12.4% 11.49% 50/50 7/1/16 AEP West Virginia Transco $571 10.7% 11.49% 50/50 7/1/16 AEP Oklahoma Transco $635 10.0% 11.20% 50/50 7/1/16

52nd EEI Financial Conference | aep.com 12 SUMMARY OF RATE CASE FILING REQUIREMENTS FERC AR IN KY LA MI OH OK TN TX VA WV FERC Transmission

GENERAL

Time Limitations Between Cases No Yes No No No No No No No Yes No N/A N/A Rates Effective Subject to Refund Yes Yes Yes Yes Yes Yes Yes Yes Yes No No Yes Yes Tri- Fuel Clause Renewal Frequency Annually Semi-Annually Monthly Monthly Annually N/A Annually Annually Annually Annually Annually N/A N/A Approx # of months after filing to 10 @ 50% if 10 implement rates 10 no order 6 4 10 9 6 9 6 Note 8 10 2 or 7 Varies Approx # of months after filing order expected 10 10 6 4 10 9 6 9 6 8 10 2 or 7 N/A

Notice of Intent

Prior PSC Notice Required? Yes Yes Yes No Optional Yes Yes No Yes Yes Yes No No Notice Period (days) 60 Varies 28 N/A 45 30 45 N/A 30 60 30 No No

CASE COMPONENTS

Hist. Partially Hist.(Forecast Forecast (Formula Forecast Partially/Fully Historical/ Base Case Test Year Projected Opt/ Hybrid) Optional Rate ) Optional Projected Hist. Hist. Hist. Hist. Hist. Forecast Forecast Filed Post Test/Year Adjustment Period Min 6, (Months) 12 12 12 ------no max 18 -- 3 12 -- Varies Limited Optional Partial Limited No Limited Limited Cash Return on CWIP Partial Note 2 Note 3 Note 1 Yes Note 4 Note 1 Yes Note 5 Yes Note 7 Note 6 Varies

Note 1: CWIP that is projected to be placed into service within six months post test year is included in rate base (for LA, under separate docket only). No CWIP in annual formula rates. Note 2: CWIP is not included in rate base for a general rate case. However, for Clean Coal Technology using Indiana Coal or Qualified Pollution Control Property, Cook Life Cycle Management Projects and Federally Mandated Projects the Commission may add CWIP to utility property for ratemaking purposes between rate cases via a surcharge. In addition, legislation (SB 251) was passed that will allow CWIP recovery through a tracker for Cook Life Cycle Management projects. Note 3: KPCo uses capitalization instead of rate base which includes CWIP, however, there is also a partial AFUDC offset which partially negates the cash return effect of CWIP in capitalization or rate base. Note 4: Ohio (ESP) cases are cost-based. Distribution cases are cost-of-service based. Note 5: Can request inclusion in rate base but requires a showing that it is needed to maintain financial integrity. The financial integrity standard in Texas is not clearly defined and has been essentially impossible to meet. Note 6: The general FERC rule has been to allow CWIP in rate base. Note 7: Allows environmental CWIP in Rate Base. Note 8: The SCC is required to issue a biennial order within 8 months of filing. Rates are to be implemented 60 days after order and are NOT subject to refund. Depending on the nature of the RAC, the SCC has a statutory limit to issue decisions within 3 months for a transmission cost recovery RAC, 8 months for a environmental compliance, RPS-RAC or DR/EE-RAC, and 9 months for cost recovery related to a new generating facility.

52nd EEI Financial Conference | aep.com 13 RETAIL RECOVERY MECHANISMS BY JURISDICTION

SO /No /CO Distribution Other Purchased 2 x 2 Environmental Renewables Company State Allowances & GHG Vegetation Energy Efficiency REPA Power OATT Investment Investment Offsets Management (Energy/Capacity)

DSM/EE Program Indiana ECCR BR CCTR/FMR/BR SPR/BR FAC/BR FAC/BR BR/PJM Tracker Cost Rider I&M Michigan PSCR BR BR EO Rider BR PSCR/RES PSCR/PSCR PSCR KPCo Kentucky Surcharge BR Surcharge DSM Adj. Clause BR N/A FAC/Tariff PPA BR

EE/PDR Ohio N/A ESRR N/A N/A AER N/A BTCR AEP Ohio Rider

KGPCo Tennessee FERC Tariff BR/TRP&MS FERC Tariff N/A N/A N/A FERC Tariff FPPAR

Virginia BR BR ERAC/BR EERAC GRAC/BR RPSRAC/FF FAC/BR & FF TRAC APCo

VMP EE/DR Recovery West Virginia ENEC ENEC/BR BR ENEC ENEC/ENEC ENEC Surcharge Rider

Arkansas ECR BR Surcharge/BR EECR BR ECR ECR/BR BR SWEPCo Louisiana EAC Formula BR/FAC Formula BR EECR/Formula BR Formula BR FAC FAC/Formula BR Formula BR Texas (SPP) BR BR BR EECRF BR FAC FAC/BR TCRF AEP TX Texas (ERCOT) N/A BR N/A EECRF /BR N/A N/A N/A TCOS

DSM Cost Oklahoma BR BR BR BR FAC FAC BR/SPP Tracker PSO Recovery Rider

AER - Alternative Energy Rider EERAC – EE Rate Adjustment Clause PJM – PA-NJ-MD Regional Transmission Org BR - Base Rates ENEC - Expanded Net Energy Cost PPA – Purchase Power Agreement BTCR – Basic Transmission Cost Rider EO – Energy Optimization PSCR- Power Supply Cost Recovery Rider CCTR - Clean Coal Technology Rider ERAC - Environmental Rate Adjustment Clause RPSRAC – Renewable Portfolio Standard RAC CO2 – Carbon Dioxide ESRR - Enhanced Service Reliability Rider RES – Renewable Energy Surcharge DSM - Demand Side Management FAC - Fuel Adjustment Clause SPP – Southwest Power Pool Regional Transmission Org EAC - Environmental Adjustment Clause FERC – Federal Energy Regulatory Commission SPR – Solar Power Rider ECR - Energy Cost Recovery Rider FF – Fuel Factor TCOS - Transmission Cost of Service ECCR – Environmental Compliance Cost Rider FMR – Federal Mandate Rider TCRF - Transmission Cost Recovery Factor EE - Energy Efficiency FPPAR – Fuel Purchase Power Adj Rider TRAC – Transmission Rate Adjustment Clause EE/DR – Energy Efficiency/Demand Response GHG- Green House Gas TRP&MS- Targeted Reliability Plan and Major Storms EE/PDR - EE Peak Demand Response Rider GRAC – Generation Rate Adjustment Clause VMP – Vegetation Management Plan EECR - EE Cost Rate Rider NOx- Nitrogen Oxide EECRF - Energy Efficiency Cost Recovery Factor Rider OATT – Open Access Transmission Tariff

52nd EEI Financial Conference | aep.com 14 STORM O&M RECOVERY MECHANISMS BY JURISDICTION

Latest Approved Recovery Ability to Period State Defer Description (in years)

Arkansas Yes Storm costs are normally expensed as incurred. However, if a storm is ruled to be significant, Commission has 3 granted authority to request recovery in base rates or a separate proceeding. Indiana Yes Recovery of storm costs is requested in base rate cases. 2011 base case established a $4M annual major N/A storm reserve based on 5-year historical average of major storm expenses and includes over-/under-recovery.

Kentucky Yes Recovery of storm costs is requested in base rate cases. Commission approval for deferral is required. 5 Louisiana No Storm costs are expensed as incurred and included for recovery in years of formula rate filings. N/A Michigan No Recovery of storm costs is requested in base rate cases which use forecasted test years. N/A Ohio Yes 2011 Distribution Base Case and 2014 Electric Security Plan orders established a $5M annual major storm 1 reserve and annual true-up mechanism. Recovery of significant storms are requested in separate proceedings.

Oklahoma Yes Recovery of storm costs is requested in base rate cases with over-/under-recovery above/below $2.9M 4 annually. Recovery of significant storm costs is separately requested. Tennessee Yes Recovery of storm costs is requested in base rate cases. Effective October 2017, a reliability/storm rider 1 provides for over-/under-recovery of incremental storm-related costs compared to what is recovered in base rates. Texas (SWEPCo) Yes Storm costs are normally expensed as incurred. However, storm costs may be deferred for recovery if the 3 costs are included in the test period of a base case filing. Texas (North) No Storm costs are normally expensed as incurred and are included in base rates during the test year. N/A Texas (Central) Yes Approved catastrophe reserve ($1.3M annually) in base rates allows deferral of all storm costs above $500K N/A with recovery in base rates or potential securitization. Virginia No Based on legislation enacted in 2015, APCo will expense incremental storm costs through 2017 associated N/A with severe weather events and/or natural disasters. Absent specific APCo request and commission approval, any incremental storms will continued to be expensed beyond 2017. West Virginia Yes Recovery of storm costs is requested in base rate cases. 5

52nd EEI Financial Conference | aep.com 15 JURISDICTIONAL OFF-SYSTEM SALES SHARING SUMMARY

State OSS Sharing? Detail Arkansas Yes, above base levels Up to $1,200,000 annual margin, customers receive 100%. Above $1,200,000, customers receive 90%.

Indiana Yes, above and below base levels Sharing occurs above and below levels included in base rates of $26.9M. Customers receive 50%.

Kentucky Yes, above and below base levels Sharing occurs above and below levels included in base rates of $15.1M. Customers receive 75%.

Louisiana Yes, above base levels Up to $874,000 annual margin, customers receive 100%. From $874,001 to $1,314,000, customers receive 85%. Above $1,314,000, customers receive 50%.

Michigan Yes 80% of profits are shared with customers

Ohio No N/A

Oklahoma Yes 90% of profits are shared with customers *

Tennessee No N/A

Texas (SWEPCo) Yes 90% of profits are shared with customers

Virginia Yes 75% of profits are shared with customers

West Virginia Yes With the exception of WPCo’s Mitchell Plant, 100% of profits are passed back to customers through the Expanded Net Energy Cost (ENEC) clause. Generally, 82.5% of Mitchell Plant profits are shared with customers.

* Percentage changed to 90% in January 2017

52nd EEI Financial Conference | aep.com 16 COMMISSION OVERVIEW Federal Energy Regulatory Commission

Commissioners

Number: 3* Appointed/Elected: Appointed Term: 5 Years Political Makeup: R: 2 D: 1

Qualifications for Commissioners The Federal Energy Regulatory Commission (FERC) is composed of up to five commissioners who are appointed by the President of the United States with the advice and consent of the Senate. Commissioners serve five-year terms and have an equal vote on regulatory matters. To avoid any undue political influence or pressure, no more than three commissioners may belong to the same political party. Commissioners Neil Chatterjee, Chairman (Rep.) since 2017: term expires June 2021. Commissioner Chatterjee assumed chairmanship in August 2017. Prior to joining the Commission, he was energy policy advisor to U.S. Senate Majority Leader Mitch McConnell (R-KY), Over the years, he has played an integral role in the passage of major energy, highway and agriculture legislation. Prior to serving Leader McConnell, he worked as a principal in government relations for the National Rural Electric Cooperative Association and as an aide to House Republican Conference Chairwoman Deborah Pryce (R-OH). He began his career in Washington, D.C., with the House Committee of Ways and Means. Robert F. Powelson, Commissioner (Rep.) since 2017: term expires June 2020. Most recently served as Commissioner for the Pennsylvania Public Utility Commission, where he served since June 2008, and lead as Chairman from February 2011-May 2015. Under Commissioner Powelson’s leadership, Pennsylvania ratepayers had an active voice on issues such as nuclear power production, renewable investment, broadband deployment, infrastructure development and cyber security. Commissioner Powelson is past president of the National Association of Regulatory Utility Commissioners (NARUC) and participated in NARUC activities on climate policy, critical infrastructure and nuclear waste disposal. Cheryl A. LaFleur, Commissioner (Dem.) since 2010: second term expires June 2019. She served as Acting Chairman from November 2013 to July 2014 and from January 2017 to August 2017 and as Chairman from July 2014 until April 2015. Prior to joining the Commission in 2010, Commissioner LaFleur had more than 20 years’ experience as a leader in the electric and natural gas industry. She served as executive vice president and acting CEO of National Grid USA, responsible for the delivery of electricity to 3.4 million customers in the Northeast. Her previous positions at National Grid USA and its predecessor New England Electric System included chief operating officer, president of the New England distribution companies and general counsel.

* As of October 16, 2017, two nominees awaited a final confirmation vote by the U.S. Senate: Richard Glick (Dem.) for a term expiring June 2022 and Kevin McIntyre (Rep.) for a term expiring June 2018 and automatic reappointment for a term expiring June 2023. If confirmed, President Trump intends to name Mr. McIntyre as Chairman.

52nd EEI Financial Conference | aep.com 17 TRANSFORMING OUR GENERATION FLEET

• Transforming Our Generation Fleet

• Investments Driving Emission Reductions

• Dramatic Reductions in Emissions • Large-scale Renewable Opportunities • Delivering Clean Energy Resources • Renewable Resources • Renewable Portfolio/Energy Efficiency Standards • Regulated & Competitive Retirements • Regulated Environmental Controls • Competitive Environmental Controls • Additional Environmental Regulations

52nd EEI Financial Conference | aep.com 18 TRANSFORMING OUR GENERATION FLEET AEP'S GENERATING RESOURCE PORTFOLIO

80% PAST AND FUTURE

70% 70% 66%

60%

50% 47%

40% 33% 30% 30% 27% 24% 22% 20% 19% 13% 10% 7% 7% 7% 6% 6% 4% 4% 6% 1% 1% 0% 1999 2005 2017 Future 1999 2005 2017 Future 1999 2005 2017 Future 1999 2005 2017 Future 1999 2005 2017 Future

Coal Natural Gas Nuclear Hydro, Wind, Solar Energy Efficiency / & Pumped Demand Response

33% 1% 2% 26% 6%

Excludes impact of Wind Catcher. Future includes IRP forecasted additions and retirements through 2030. Energy Efficiency / Demand Response represents avoided capacity rather than physical assets.

52nd EEI Financial Conference | aep.com 19 INVESTMENTS DRIVING EMISSION REDUCTIONS

52nd EEI Financial Conference | aep.com 20 DRAMATIC REDUCTIONS IN EMISSIONS

1990-2016 ACTUAL

SO2 94%

90% NOx

2001-2016 ACTUAL

Hg 93%

52nd EEI Financial Conference | aep.com 21 DRAMATIC REDUCTIONS IN EMISSIONS

2000-2016 actual

44% CO2

52nd EEI Financial Conference | aep.com 22 INVESTING IN A GREENER FUTURE

Wind and solar represents nameplate MW capacity.

Source: Current Internal Integrated Resource Plans. Excludes impact of Wind Catcher. Reflects PSO’s Integrated Resource Plan filed 11/1/17.

Actual additions depend on market conditions, regulatory approval, customer demand and other external factors.

52nd EEI Financial Conference | aep.com 23 DELIVERING CLEAN ENERGY RESOURCES

AEP's 2017 Renewable Portfolio, in MW Hydro, Wind, Solar & Pumped Storage Owned MW PPA MW Total MW

AEP Ohio 209 209

Appalachian Power Company 788 455 1,243

Indiana Michigan Power Company 38 450 488

Public Service of Oklahoma 1,137 1,137

Southwestern Electric Power Company 469 469

Competitive Wind, Solar & Hydro 475 177 652

Total 1,301 2,897 4,198

52nd EEI Financial Conference | aep.com 24 RENEWABLE RESOURCES

Owned Renewables PPA Renewables Total Total Total Company & Plant Name State Hydro Wind Solar Hydro Wind Solar Owned PPA Appalachian Power Company Buck VA 9 9 9 Byllesby VA 22 22 22 Claytor VA 76 76 76 Leesville VA 50 50 50 London WV 14 14 14 Marmet WV 14 14 14 Niagara VA 2 2 2 Winfield WV 15 15 15 Smith Mtn Pumped VA 586 586 586 Camp Grove WV 75 75 75 Beech Ridge VA 101 101 101 Fowler Ridge III OH 99 99 99 Grand Ridge II & III WV 100 100 100 Gauley River / Summersville WV 80 80 80 Total 788 788 80 375 455 1,243

Indiana Michigan Power Company Berrien Springs MI 7 7 7 Buchanan MI 4 4 4 Constantine MI 1 1 1 Elkhart IN 3 3 3 Mottville MI 2 2 2 Twin Branch IN 5 5 5 Watervliet MI 5 5 5 Olive IN 5 5 5 Deer Creek IN 3 3 3 Twin Branch IN 3 3 3 Fowler Ridge I IN 100 100 100 Fowler Ridge II IN 50 50 50 Wildcat IN 100 100 100 Headwaters IN 200 200 200 Total 22 16 38 450 450 488

52nd EEI Financial Conference | aep.com 25 RENEWABLE RESOURCES

Owned Renewables PPA Renewables Total Total Total Company & Plant Name State Hydro Wind Solar Hydro Wind Solar Owned PPA Ohio Power Company Fowler Ridge II OH 100 100 100 Wyandot Solar OH 10 10 10 Timber Road OH 99 99 99 Total 199 10 209 209

Public Service Company of Oklahoma Weatherford OK 147 147 147 Sleeping Bear OK 94 94 94 Blue Canyon V OK 99 99 99 Minco OK 99 99 99 Elk City OK 99 99 99 Balko OK 200 200 200 Seling OK 199 199 199 Goodwell OK 200 200 200 Total 1,137 1,137 1,137

Southwestern Electric Power Company Majestic TX 79 79 79 Majestic II TX 80 80 80 Flat Ridge II KS 109 109 109 Canadian Hills OK 201 201 201 Total 469 469 469 Total Regulated Renewables 810 16 826 80 2,630 10 2,720 3,546

Competitive Trent Mesa TX 150 150 150 Desert Sky TX 161 161 161 Southwest Mesa TX 177 177 177 Racine OH 48 48 48 AEP Renewables 90 90 90 AEP Onsite Partners 26 26 26 Total Competitive Renewables 48 311 116 475 177 177 652

Total AEP Renewable Resources 858 311 132 1,301 80 2,807 10 2,897 4,198

52nd EEI Financial Conference | aep.com 26 RENEWABLE PORTFOLIO/ENERGY EFFICIENCY STANDARDS

52nd EEI Financial Conference | aep.com 27 REGULATED & COMPETITIVE RETIREMENTS SINCE 2011

Operating Company Plant MW Retirement Date APCo Glen Lyn 5 95 2015 Glen Lyn 6 240 2015 Clinch River 3 235 2015 Sporn 1 150 2015 Sporn 3 150 2015 Kanawha River 1 200 2015 Kanawha River 2 200 2015 Total MW 1,270

I&M Tanners Creek 1-4 995 2015 Total MW 995

KPCo Big Sandy 2 800 2015 Total MW 800

SWEPCo Welsh 2 528 2016 Total MW 528

PSO Northeastern 4 470 2016 Total MW 470

Total Regulated Retirements 4,063

Operating Company Plant MW Retirement Date AEP Generation Resources Beckjord 53 2014 Conesville 3 165 2012 Muskingum River 1-5 1,440 2015 Picway 5 100 2015 Sporn 2,4 300 2015 Sporn 5 450 2011 Kammer 1-3 630 2015 Total Competitive Retirements 3,138

52nd EEI Financial Conference | aep.com 28 REGULATED ENVIRONMENTAL CONTROLS

MW Projected Projected Projected Projected Projected Gas Projected Plant Name Capacity SCR In-Service FGD In-Service ACI In-Service DSI In-Service Baghouse In-Service Conversion In-Service

APCo

Amos 1 800  

Amos 2 800  

Amos 3 1,330  

Clinch River 1 230 

Clinch River 2 235 

Mountaineer 1,320  

WPCo

Mitchell 1&2* 780  

KPCo

Big Sandy 1 280 

Mitchell 1&2* 780  

I&M/AEG (50/50 share)

Rockport 1 1,310  2017 x 2025  

Rockport 2 1,310 x 2020 x 2028   * Operated by Kentucky Power  In Service Projected

ACI – Activated Carbon Injection DSI – Dry Sorbent Injection FGD – Flue Gas Desulfurization SCR – Selective Catalytic Reduction Baghouse (Mercury Control) (SO3 Control) (SO2 Control) (NOx Control) (Particulate Matter)

52nd EEI Financial Conference | aep.com 29 REGULATED ENVIRONMENTAL CONTROLS

MW Projected Projected Projected Projected Projected Gas Projected Plant Name Capacity SCR In-Service FGD In-Service ACI In-Service DSI In-Service Baghouse In-Service Conversion In-Service

PSO

Oklaunion 105  

Northeastern 3 469   

SWEPCo

Dolet Hills 256    

Flint Creek 1 264  

Pirkey 580  

Turk 477    

Welsh 1 525  x 2024 

Welsh 3 528  x 2024   In Service Projected

52nd EEI Financial Conference | aep.com 30 COMPETITIVE ENVIRONMENTAL CONTROLS

Gore Mercury Plant Name MW Capacity SCR FGD ACI Control AEP Generation Resources Cardinal 1 595  

Conesville 4 651  

Conesville 5 405  

Conesville 6 405  

Stuart 1-4 603  

AEP Texas Oklaunion* 355  

* Owned by AEP Texas North, PPA with Competitive  In Service Projected

ACI – Activated Carbon Injection FGD – Flue Gas Desulfurization SCR – Selective Catalytic Reduction (Mercury Control) (SO2 Control) (NOx Control)

52nd EEI Financial Conference | aep.com 31 ADDITIONAL ENVIRONMENTAL REGULATIONS Revised Effluent Limitation Guidelines (“ELG”) – Final rule went into effect January 2016, but the Federal EPA has reopened parts of the rule • Establishes more stringent standards for wastewater discharge from steam electric generating units • Considers water treatment systems for wastewater from FGD control systems and ash handling and storage processes • Initial compliance deadline was delayed two years until Nov 1, 2020 Note: The Federal EPA will be reconsidering the requirements for bottom ash transport and FGD wastewater

Coal Combustion Residuals Rule (“CCR”) – Final rule went into effect October 2015 • Applies to the handling and storage of coal combustion and emission control system by-products (ash ponds and landfills) • Requires the collection of groundwater monitoring data, which is on schedule Note: The Federal EPA indicated it will reconsider parts of this rule, although the schedule for doing so is uncertain

ELG and CCR Implementation Strategy • The implementation strategy is being reviewed given the Federal EPA’s decision to reconsider both rules • Compliance solutions based on the initial rules have been included in capital cost estimates • Efforts are underway to optimize the costs of technology options

Revised Clean Water Act 316(b) Standards – Final rule went into effect October 2014 • Applies to the cooling water intake systems • Does not mandate cooling towers, but does require studies of site-specific constraints • With the rule finalized, plans are being refined and expected to be generally consistent with prior estimates

52nd EEI Financial Conference | aep.com 32 FINANCIAL UPDATE

• Capitalization & Liquidity • Pension & OPEB Estimates • AEP Banking Group • AEP Credit Ratings • Long-Term Debt Maturity Profile • Debt Schedules

10/31/2017 33 52nd EEI Financial Conference | aep.com 33 CAPITALIZATION & LIQUIDITY

Total Debt / Total Capitalization Credit Statistics

55.9% 55.2% 54.3% 54.3% 53.2% 54.0% 54.5% 54.6% Actual Target FFO to Total Debt 17.4% 15%-20%

Represents the trailing 12 months as of 9/30/2017

2012 2013 2014 2015 2016 Q1-17 Q2-17 Q3-17 Liquidity Summary Short/Long Term Debt Securitization Debt (unaudited) 9/30/2017 Actual ($ in millions) Amount Maturity

Revolving Credit Facility $3,000 Jun-21 Qualified Pension Funding Plus Cash & Cash Equivalents 344 99% 97% 97% 98% 99% 100% 92% 96% Less Commercial Paper Outstanding (295) Letters of Credit Issued -

2012 2013 2014 2015 2016 Q1-17 Q2-17 Q3-17 Net Available Liquidity $3,049

Strong balance sheet, credit metrics and liquidity

52nd EEI Financial Conference | aep.com 34 PENSION & OPEB ESTIMATES

Assumptions 2017E 2018E • YTD pension returns up 9.9% due to strong investment performance, Pension Discount Rate 4.05% 4.44% including 20% returns in the global OPEB Discount Rate 4.10% 4.49% equity portfolio. OPEB returns are Assumed Long Term Rate of up 14.5%, also due to strong global 6.00% 6.25% Return on Pension Assets equity gains. OPEB obligations Assumed Long Term Rate remain fully funded at 112%. 6.75% 6.00% of Return on OPEB Assets • 2018 is subject to potential changes Pension/OPEB Funding * $98M $97M in investment results, interest rates Pension/OPEB O&M (Pre-tax) * $20M $9M and actuarial assumptions.

* Excludes non-qualified retirement plan • Pension expense for regulated subsidiaries is recovered through base rates. Qualified Pension Funding

92% 99% 97% 97% 96% 100%

2012 2013 2014 2015 2016 3Q2017

52nd EEI Financial Conference | aep.com 35 AEP BANKING GROUP

Lender Composition $3.0B Core Credit Facilities %Share Bank of America Major US Bank 6.5% Bank of Tokyo-Mitsubishi Japanese Bank 6.5% 11% 20% Barclays Bank British Bank 6.5% 6% Citibank Major US Bank 6.5% JP Morgan Major US Bank 6.5% 8% Mizuho Japanese Bank 6.5% The Bank of Nova Scotia Canadian Bank 6.5% 13% Wells Fargo Major US Bank 6.5% 26% Bank of New York US Regional Bank 4.0% BNP Paribas European Bank 4.0% 16% Credit Agricole European Bank 4.0% Credit Suisse Investment Bank 4.0% Goldman Sachs Investment Bank 4.0% US Regional Bank Major US Bank Key Bank US Regional Bank 4.0% Morgan Stanley Investment Bank 4.0% Investment Bank Japanese Bank PNC Financial US Regional Bank 4.0% European Bank British Bank Royal Bank of Canada Canadian Bank 4.0% No Canadian Bank Chan SunTrust Bank US Regional Bank 4.0% ge UBS Investment Bank 4.0% Fifth-Third Bank US Regional Bank 2.6% Lender mix gives AEP Huntington National Bank US Regional Bank 1.4% geopolitical diversification Total 100.0%

52nd EEI Financial Conference | aep.com 36 AEP CREDIT RATINGS

Moody's S&P Company Senior Senior Unsecured Outlook Unsecured Outlook

American Electric Power Company Inc. Baa1 P BBB+ S AEP, Inc. Short Term Rating P2 S A2 S AEP Texas Inc. Baa1 S A- S AEP Transmission Company, LLC (1) A2 S A- S Appalachian Power Company (2) Baa1 S A- S Indiana Michigan Power Company (2) Baa1 P A- S Kentucky Power Company Baa2 S A- S Ohio Power Company A2 S A- S Public Service Company of Oklahoma A3 S A- S Southwestern Electric Power Company Baa2 S A- S Transource Energy (3) A2 S NR NR

(1) AEP Transmission Co. received a solicited senior unsecured debt rating of A- from Fitch. The rating outlook is Stable. (2) In conjunction with the unenhanced VRDN remarketings, APCo and I&M both received short term credit ratings of A-2/P2 from S&P and Moody’s, respectively. (3) NR = Not Rated

Ratings current as of October 27, 2017

52nd EEI Financial Conference | aep.com 37 LONG-TERM DEBT MATURITY PROFILE

($ in millions) Year 2017 2018 2019 2020 2021 2022

AEP, Inc. $550.0 $0.0 $0.0 $0.0 $0.0 $300.0 AEP Generating Company $45.0 $125.0 $0.0 $0.0 $0.0 $0.0 AEP Texas* $40.9 $30.0 $250.0 $110.6 $0.0 $425.0 AEP Transmission Company $0.0 $50.0 $85.0 $0.0 $50.0 $104.0 Appalachian Power* $0.0 $100.0 $281.0 $65.4 $367.5 $0.0 Indiana Michigan Power $0.9 $300.0 $539.2 $49.9 $154.4 $0.0 Kentucky Power $0.0 $75.0 $0.0 $65.0 $40.0 $0.0 Ohio Power* $0.0 $350.0 $0.0 $0.0 $500.0 $0.0 Public Service of Oklahoma $0.0 $0.0 $375.0 $12.7 $250.0 $0.0 Southwestern Electric Power $0.0 $381.7 $453.5 $115.0 $0.0 $275.0 Wheeling Power Company $0.0 $65.0 $0.0 $0.0 $0.0 $113.0 Total $637 $1,477 $1,984 $419 $1,362 $1,217

* Excludes securitization bonds

Includes mandatory tenders (put bonds) Data as of September 30, 2017

52nd EEI Financial Conference | aep.com 38 DEBT SCHEDULES

American Electric Power, Inc Interest Maturity CUSIP / PPN* Amount

Senior Notes, Series E 1.650% 12/15/2017 025537AF8 $550,000,000 Senior Notes, Series F 2.950% 12/15/2022 025537AG6 $300,000,000

Total $850,000,000

AEP Generating Company Interest Maturity CUSIP / PPN* Amount

City of Rockport, Series 1995 A Floating 07/01/2025 773835BG7 $22,500,000 1

City of Rockport, Series 1995 B Floating 07/01/2025 773835BH5 $22,500,000 1 Term Loan Floating 12/15/2018 00104NAD6 $125,000,000

Total $170,000,000

1 Liquidity Letter of Credit matures on 7/15/2019, but may be purchased on demand

AEP Generation Resources Interest Maturity CUSIP / PPN* Amount

State of Ohio, Air Quality Bonds 2009B 5.800% 12/01/2038 677525TM9 $32,245,000 2

Total $32,245,000

2 Debt on Ohio Power Company, but the obligation is AEP Generation Resources through an intercompany note

Note: Debt schedules current as of 9/30/17. * PPN – Private Placement Number

52nd EEI Financial Conference | aep.com 39 DEBT SCHEDULES

AEP Texas Interest Maturity CUSIP / PPN* Amount

Red River Authority of Texas PCRB (CPL, PSO, WTU) 4.450% 06/01/2020 756864BT0 $44,310,000 Senior Note, Series 2008A 5.890% 04/01/2018 0010EQA*7 $30,000,000 Senior Note, Series 2008B 6.760% 04/01/2038 0010EQA@5 $70,000,000 Senior Notes, Series C 3.090% 02/28/2023 0010EQA#3 $125,000,000 Senior Notes, Series D 4.480% 02/27/2043 0010EQB*6 $75,000,000 Bank Term Loan Floating 07/25/2019 N/A $75,000,000 Senior Note, Series E 3.270% 09/30/2022 0010EQB@4 $25,000,000 Senior Note, Series F 3.750% 09/30/2025 0010EQB#5 $50,000,000 Senior Note, Series G 4.710% 12/15/2035 0010EQ C*5 $50,000,000 Senior Note, Series A 2.400% 10/01/2022 00108WAA8 $400,000,000 Senior Note, Series B 3.800% 10/01/2047 00108WAB6 $300,000,000 Guadalupe-Blanco River Authority PCRB, Series 2008 5.625% 10/01/2017 400530AQ4 $40,890,000 Red River Authority of Texas PCRB (CPL, PSO, WTU) 4.450% 06/01/2020 756864BT0 $6,330,000 Matagorda PCB Series 2001A 6.300% 11/01/2029 576528DM2 $100,635,000 Matagorda Cnty Navigation Dist. #1 PCRB, Series 2008-1 4.000% 06/01/2030 576528DP5 $60,265,000 Matagorda Cnty Navigation Dist. #1 PCRB, Series 2008-2 4.000% 06/01/2030 576528DQ3 $60,000,000

Matagorda Cnty Navigation District #1, Series 1996 1.750% 05/01/2030 576528DS9 $60,000,000 1 Matagorda Cnty Navigation District #1, Series 2005A 4.400% 05/01/2030 576528CY7 $111,700,000 Matagorda Cnty Navigation District #1, Series 2005B 4.550% 05/01/2030 576528CZ4 $50,000,000 Bank Term Loan Floating 07/25/2019 N/A $125,000,000

1 Put date is 09/01/2020

Note: Debt schedules current as of 9/30/17. * PPN – Private Placement Number

52nd EEI Financial Conference | aep.com 40 DEBT SCHEDULES

AEP Texas (continued) Interest Maturity CUSIP / PPN* Amount

Senior Note, Series B 6.650% 02/15/2033 0010EPAF5 $275,000,000 Senior Note, Series A 2.610% 04/30/2019 0010EPA*9 $50,000,000 Senior Note, Series B 3.810% 04/30/2026 0010EPA@7 $50,000,000 Senior Note, Series C 4.670% 04/30/2044 0010EPA#5 $100,000,000 Senior Note, Series D 4.770% 10/30/2044 0010EPB*8 $100,000,000 Senior Note, Series G 3.850% 10/01/2025 0010EPAN8 $250,000,000

Total $2,684,130,000

Securitization Bonds, Class 2006A-4 5.170% 01/01/2018 00110AAD6 $69,962,039 Securitization Bonds, Class 2006A-5 5.306% 07/01/2020 00110AAE4 $494,700,000 Securitization Bonds, Class 2012 A-1 0.880% 12/01/2017 00104UAA6 $7,387,936 Securitization Bonds, Class 2012 A-2 1.976% 06/01/2020 00104UAB4 $180,200,000 Securitization Bonds, Class 2012 A-3 2.845% 12/01/2024 00104UAC2 $311,900,000

Total $1,064,149,975

Note: Debt schedules current as of 9/30/17. * PPN – Private Placement Number

52nd EEI Financial Conference | aep.com 41 DEBT SCHEDULES

AEP Transmission Company Interest Maturity CUSIP / PPN* Amount

Senior Notes, Series A, Tranche 1 3.300% 10/18/2022 00114*AA1 $104,000,000 Senior Notes, Series A, Tranche 2 4.000% 10/18/2032 00114*AB9 $85,000,000 Senior Notes, Series A, Tranche 3 4.730% 10/18/2042 00114*AC7 $61,000,000 Senior Notes, Series A, Tranche 4 4.780% 12/14/2042 00114*AD5 $75,000,000 Senior Notes, Series A, Tranche 5 4.830% 03/18/2043 00114*AE3 $25,000,000 Senior Notes, Series B, Tranche 1 2.730% 11/07/2018 00114*AF0 $50,000,000 Senior Notes, Series B, Tranche 2 4.050% 11/07/2023 00114*AG8 $60,000,000 Senior Notes, Series B, Tranche 3 4.380% 11/07/2028 00114*AL7 $60,000,000 Senior Notes, Series B, Tranche 4 5.320% 11/07/2043 00114*AH6 $100,000,000 Senior Notes, Series B, Tranche 5 5.420% 04/30/2044 00114*AJ2 $30,000,000 Senior Notes, Series B, Tranche 6 5.520% 10/30/2044 00114*AK9 $100,000,000 Senior Notes, Series C, Tranche A 2.680% 11/14/2019 00114*AM5 $85,000,000 Senior Notes, Series C, Tranche B 3.180% 11/14/2021 00114*AN3 $50,000,000 Senior Notes, Series C, Tranche C 3.560% 11/14/2024 00114*AP8 $95,000,000 Senior Notes, Series C, Tranche D 3.660% 03/16/2025 00114*AQ6 $50,000,000 Senior Notes, Series C, Tranche E 3.760% 06/16/2025 00114*AR4 $40,000,000 Senior Notes, Series C, Tranche F 3.810% 11/14/2029 00114*AS2 $55,000,000 Senior Notes, Series C, Tranche G 4.010% 06/15/2030 00114*AT0 $60,000,000 Senior Notes, Series C, Tranche H 4.050% 11/14/2034 00114*AU7 $25,000,000 Senior Notes, Series C, Tranche I 4.530% 11/14/2044 00114*AV5 $40,000,000 Senior Notes, Series F 3.100% 12/01/2026 00115A AE9 $300,000,000 Senior Notes, Series D 3.100% 12/01/2026 00115A AA7 $125,000,000 Senior Notes, Series G 4.000% 12/01/2046 00115A AC3 $400,000,000 Senior Notes, Series H 3.750% 12/01/2047 00115A AG4 $500,000,000

Total $2,575,000,000

Note: Debt schedules current as of 9/30/17. * PPN – Private Placement Number

52nd EEI Financial Conference | aep.com 42 DEBT SCHEDULES

Appalachian Power Company Interest Maturity CUSIP / PPN* Amount

Bank Term Loan Floating 06/30/2019 N/A $125,000,000

West Virginia Economic Dev. Authority, Series 2008C 3.250% 05/01/2019 95648NAD9 $30,000,000 Russell County, Series K 4.625% 11/01/2021 782470AR9 $17,500,000 West Virginia Economic Dev. Authority, Series 2008D 3.250% 05/01/2019 95648NAE7 $40,000,000

Mason County, Series L 1.625% 10/01/2022 575200BB5 $100,000,000 1 West Virginia Economic Dev. Authority, Series 2008B Floating 02/01/2036 95648VAL3 $50,275,000 West Virginia Economic Dev. Authority, Series 2008A Floating 02/01/2036 95648VAW9 $75,000,000 West Virginia Economic Dev. Authority, Series 2010A 5.375% 12/01/2038 95648VAS8 $50,000,000

West Virginia Economic Dev. Authority, Series 2011A 1.700% 01/01/2041 95648VAZ2 $65,350,000 2

West Virginia Economic Dev. Authority, Series 2015A (Amos) 1.900% 03/01/2043 95648VAV1 $86,000,000 3

1 Put date 10/01/2018 2 Put date 09/01/2020 3 Put date 4/01/2019

Note: Debt schedules current as of 9/30/17. * PPN – Private Placement Number

52nd EEI Financial Conference | aep.com 43 DEBT SCHEDULES

Appalachian Power Company (continued) Interest Maturity CUSIP / PPN* Amount

Senior Note, Series H 5.950% 05/15/2033 037735BZ9 $200,000,000 Senior Note, Series L 5.800% 10/01/2035 037735CE5 $250,000,000 Senior Note, Series N 6.375% 04/01/2036 037735CG0 $250,000,000 Senior Note, Series P 6.700% 08/15/2037 037735CK1 $250,000,000 Senior Note, Series Q 7.000% 04/01/2038 037735CM7 $500,000,000 Senior Note, Series T 4.600% 03/30/2021 037735CR6 $350,000,000 Senior Note, Series U 4.400% 05/15/2044 037735CT2 $300,000,000 Senior Note, Series V 3.400% 06/01/2025 037735CU9 $300,000,000 Senior Note, Series W 4.450% 06/01/2045 037735CV7 $350,000,000 Senior Note, Series X 3.300% 06/01/2027 037735CW5 $325,000,000 Total $3,714,125,000

Securitization Bonds, Tranche A-1 2.008% 02/01/2023 037680AA3 $134,176,142 Securitization Bonds, Tranche A-2 3.772% 08/01/2028 037680AB1 $164,500,000 Total $298,676,142

Note: Debt schedules current as of 9/30/17. * PPN – Private Placement Number

52nd EEI Financial Conference | aep.com 44 DEBT SCHEDULES

Indiana Michigan Power Company Interest Maturity CUSIP / PPN* Amount

Law renceburg, Series I Floating 10/01/2019 520453AN1 $25,000,000 Rockport, Series D 2.050% 04/01/2025 773835BN2 $40,000,000 1 Rockport, Series 2002 A Floating 06/01/2025 773835AV5 $0 Law renceburg, Series H Floating 11/01/2021 520453AM3 $52,000,000 City of Rockport, Series 2009A 1.750% 06/01/2025 773835BL6 $50,000,000 2 City of Rockport, Series 2009B 1.750% 06/01/2025 773835BM4 $50,000,000 2

Bank Term Loan Floating 05/15/2018 45488QAA6 $200,000,000

DCC Fuel VI Floating Rate Floating 10/15/2017 N/A $902,666 DCC Fuel VII Floating Rate Floating 04/28/2019 N/A $15,055,514 DCC Fuel VIII Floating Rate Floating 10/27/2019 N/A $24,101,811 DCC Fuel IX Floating Rate Floating 10/29/2020 N/A $49,852,503 DCC Fuel X Floating Rate Floating 04/27/2021 N/A $62,363,605

Senior Note, Series H 6.050% 03/15/2037 454889AM8 $400,000,000 Senior Note, Series I 7.000% 03/15/2019 454889AN6 $475,000,000 Seinor Note, Series J 3.200% 03/15/2023 454889AP1 $250,000,000 Seinor Note, Series K 4.550% 03/15/2046 454889 AQ9 $400,000,000 Seinor Note, Series L 3.750% 07/01/2047 454889 AR7 $300,000,000 Total $2,394,276,099

1 Put date is 06/01/2021 2 Put date is 06/01/2018

Note: Debt schedules current as of 9/30/17. * PPN – Private Placement Number

52nd EEI Financial Conference | aep.com 45 DEBT SCHEDULES

Kentucky Power Interest Maturity CUSIP / PPN* Amount

Bank Term Loan Floating 11/05/2018 N/A $75,000,000

Senior Note, Series A 7.250% 06/18/2021 491386C*7 $40,000,000 Senior Note, Series B 8.030% 06/18/2029 491386C@5 $30,000,000 Senior Note, Series C 8.130% 06/18/2039 491386C#3 $60,000,000 Senior Note, Series D 5.625% 12/01/2032 491386AL2 $75,000,000 Senior Note, Series A 4.180% 09/30/2026 491386D*6 $120,000,000 Senior Note, Series B 4.330% 12/30/2026 491386D@4 $80,000,000 Senior Note, Series F 3.130% 09/12/2024 491386D#2 $65,000,000 Senior Note, Series G 3.350% 09/12/2027 491386E*5 $40,000,000 Senior Note, Series H 3.450% 09/12/2029 491386E@3 $165,000,000 Senior Note, Series I 4.120% 09/12/2047 491386E#1 $55,000,000

WV Economic Dev. Authority, Series 2014A (Mitchell) 2.000% 04/01/2036 N/A $65,000,000 Total $870,000,000

Note: Debt schedules current as of 9/30/17. * PPN – Private Placement Number

52nd EEI Financial Conference | aep.com 46 DEBT SCHEDULES

Ohio Power Company Interest Maturity CUSIP / PPN* Amount

Senior Note, Series B 6.600% 03/01/2033 199575AT8 $250,000,000 Senior Note, Series F 5.850% 10/01/2035 199575AV3 $250,000,000 Senior Note, Series G 6.050% 05/01/2018 199575AW1 $350,000,000 Senior Note, Series G Due 2/15/2033 6.600% 02/15/2033 677415CF6 $250,000,000 Senior Notes, Series M Due 10/1/2021 5.375% 10/01/2021 677415CP4 $500,000,000 Total $1,600,000,000

Securitization Bonds, Tranche A-2 2.049% 07/01/2019 67741YAB4 $94,878,311 Total $94,878,311

Public Service Company of Oklahoma Interest Maturity CUSIP / PPN* Amount

Red River Authority of Texas PCRB (CPL, PSO, WTU) 4.450% 06/01/2020 756864BT0 $12,660,000

Senior Note, Series H 5.150% 12/01/2019 744533BK5 $250,000,000 Senior Note, Series G 6.625% 11/15/2037 744533BJ8 $250,000,000 Senior Note, Series I 4.400% 02/01/2021 744533BL3 $250,000,000 Senior Note, Series A 3.170% 03/31/2025 744533C*9 $125,000,000 Senior Note, Series B 4.090% 03/31/2045 744533C@7 $125,000,000 Senior Note, Series C 3.050% 08/01/2026 744533C#5 $50,000,000 Senior Note, Series D 4.110% 08/01/2046 744533D*8 $100,000,000

Bank Term Loan Floating 11/04/2019 N/A $125,000,000

Total $1,287,660,000 Note: Debt schedules current as of 9/30/17. * PPN – Private Placement Number

52nd EEI Financial Conference | aep.com 47 DEBT SCHEDULES

Southwestern Electric Power Company Interest Maturity CUSIP / PPN* Amount

Bank Term Loan Floating 06/29/2020 N/A $115,000,000

Sabine Mines 6.370% 10/31/2024 78532*AC7 $25,000,000 Sabine Mines 4.580% 02/21/2032 78532*AD5 $47,125,000

Sabine River Authority of Texas, Series 2006 4.950% 03/01/2018 785652CJ5 $81,700,000 Parish of DeSoto, Series 2010 1.600% 01/01/2019 241627AW8 $53,500,000

Senior Note, Series F 5.875% 03/01/2018 845437BJ0 $300,000,000 Senior Note, Series G 6.450% 01/15/2019 845437BK7 $400,000,000 Senior Note, Series H 6.200% 03/15/2040 845437BL5 $350,000,000 Senior Note, Series I 3.550% 02/15/2022 845437BM3 $275,000,000 Senior Note, Series J 3.900% 04/01/2045 845437BN1 $400,000,000 Senior Note, Series K 2.750% 10/01/2026 845437BP6 $400,000,000 Total $2,447,325,000

Wheeling Power Company Interest Maturity CUSIP / PPN* Amount

West Virginia Economic Development Authority, Series 2013A Floating 06/01/2037 N/A $65,000,000 1

Senior Note, Series A, Tranche A 3.360% 06/01/2022 96316#AB9 $113,000,000 Senior Note, Series A, Tranche B 3.700% 06/01/2025 96316#AC7 $122,000,000 Senior Note, Series A, Tranche C 4.200% 06/01/2035 96316#AD5 $50,000,000 Total $350,000,000

1 Put date 06/30/2018 Note: Debt schedules current as of 9/30/17. * PPN – Private Placement Number

52nd EEI Financial Conference | aep.com 48 OVERVIEW President and Chief Operating Officer: Chris Beam Since January 2017 27 years with AEP

Appalachian Power Company (APCo) Total Customers at 12/31/16: (organized in Virginia in 1926) is engaged in the generation, Residential 887,000 transmission and distribution of electric power to approximately 957,000 retail customers in the southwestern portion of Virginia Commercial 146,000 and southern West Virginia, and in supplying and marketing Industrial 5,000 electric power at wholesale to other electric utility companies, municipalities and other market participants. As of December 31, Other 8,000 2016, APCo had 1,845 employees. APCo is a member of PJM. Total 1,046,000

Wheeling Power Company (WPCo) PRINCIPAL Owned Generating Capacity 7,412 MW INDUSTRIES SERVED: (organized in West Virginia in 1883 and reincorporated in 1911) PPA Capacity 799 MW provides electric service to approximately 41,000 retail Coal Mining customers in northern West Virginia. As of December 31, 2016, Primary Metals Generating & PPA Capacity by Fuel Mix: WPCo had 57 employees. WPCo is a member of PJM. Chemical Manufacturing • Coal: 65.5%

Kingsport Power Company (KGPCo) Pipeline Transportation • Hydro & Wind: 15.1% (organized in Virginia in 1917) provides electric service to Paper Manufacturing • Natural Gas: 19.4% approximately 48,000 retail customers in Kingsport and eight neighboring communities in northeastern Tennessee. As of Transmission Miles 6,435 December 31, 2016, KGPCo had 53 employees. KGPCo is a Distribution Miles 54,547 member of PJM. Note: Values consolidate APCo, WPCo and KGPCo.

52nd EEI Financial Conference | aep.com 49 APCo FINANCIAL & OPERATIONAL DATA Capital Structure (in thousands) 2016** 9/30/2017* Credit Ratings/Outlook Capital Structure Debt Equity Total Debt Equity Total Moody's S&P

Capitalization Per Balance Sheet 4,113,500 3,583,500 7,697,000 4,048,900 3,740,800 7,789,700 Baa1/S A-/S % of Capitalization Per Balance Sheet 53.4% 46.6% 100.0% 52.0% 48.0% 100.0% FFO Interest Coverage 5.51 5.29^ FFO Total Debt 21.7% 21.1% ^ - calculated on rolling 12-month avg.

Summary of KWh Energy Sales*** Summary of Degree Days** (in millions of KWhs) 35,000 2016 2015 2014 29,433 30,074 31,002 (in degree days) 30,000 2,105 2,162 2,645 Actual Heating 25,000 Normal 2,257 2,248 2,232 9,410 9,866 10,314

hours 20,000 Actual 1,480 1,290 1,056 - Cooling 1,198 1,196 1,206 15,000 6,687 6,707 6,799 Normal

10,000 Kilowatt 5,000 11,327 11,504 11,851 2017 Asset Data* (in thousands)

- As of 9/30/17 2016 2015 2014 Residential Commercial Industrial Other Total Assets $ 12,122,600 Net Plant Assets $ 10,068,200 * Source: 3Q17 Financial Statements (unaudited) Cash $ 2,900 ** Source: 2016 10K Financial Statements *** GWh Sales – Weather Normalized

52nd EEI Financial Conference | aep.com 50 WPCo FINANCIAL & OPERATIONAL DATA Capital Structure (in thousands)

2016** 6/30/2017* Capital Structure Debt Equity Total Debt Equity Total Credit Ratings/Outlook

Capitalization Per Balance Sheet 348,572 412,839 761,411 348,690 412,605 761,295 Moody's S&P % of Capitalization Per Balance Sheet 45.8% 54.2% 100.0% 45.8% 54.2% 100.0% NR A-/S FFO Interest Coverage 5.90 5.94^ FFO Total Debt 16.4% 16.5% ^ - calculated on rolling 12-month avg.

Summary of KWh Energy Sales*** Summary of Degree Days (in millions of KWhs) 2016 2015 2014 3,759 3,615 3,260 4,000 (in degree days) Actual 3,292 3,569 4,113 3,500 Heating

3,000 Normal 3,712 3,694 3,687 Actual 1,117 935 715

2,500 Cooling hours - 2,905 2,748 732 725 721 2,000 2,397 Normal 1,500

Kilowatt 1,000 2017 Asset Data* (in thousands) 500 441 445 441 407 417 417 - As of 6/30/17 2016 2015 2014 Total Assets $ 1,101,228 Residential Commercial Industrial Other Net Plant Assets $ 900,559 Cash $ 31 * Source: 2Q17 Financial Statements (unaudited) ** Source: 2016 Annual Financial Statements *** GWh Sales – Weather Normalized

52nd EEI Financial Conference | aep.com 51 KGPCo FINANCIAL & OPERATIONAL DATA

Capital Structure (in thousands)

2016** 6/30/2017* Capital Structure Debt Equity Total Debt Equity Total Capitalization Per Balance Sheet 48,438 37,531 85,969 49,442 40,942 90,384 % of Capitalization Per Balance Sheet 56.3% 43.7% 100.0% 54.7% 45.3% 100.0%

Summary of KWh Energy Sales*** Summary of Degree Days (in millions of KWhs) 2016 2015 2014 2,500 (in degree days) 2,022 2,094 2,091 Actual 2,070 1,979 2,532 2,000 Heating Normal 2,226 2,221 2,219 Actual 1,455 1,260 1,088

1,500 918 981 981 Cooling hours - Normal 1,080 1,078 1,069 1,000

394 395 392 Kilowatt 500 2017 Asset Data* (in thousands) 675 683 682 - As of 6/30/17 2016 2015 2014 Total Assets $ 155,713 Residential Commercial Industrial Other Net Plant Assets $ 126,974 Cash $ 68 * Source: 2Q17 Financial Statements (unaudited) ** Source: 2016 Annual Financial Statements *** GWh Sales – Weather Normalized

52nd EEI Financial Conference | aep.com 52 CUSTOMER STATISTICS APPALACHIAN AREA INVESTOR OWNED UTILITIES * TYPICAL BILL COMPARISON **

West Virginia Customers West Virginia $/month Virginia $/month

Monongahela Power Co 112.48 APCo 429,047 APCo 114.29 The Potomac Edison Virginia Electric & Power Co 109.26 Company 112.48 Monongahela Power Co 389,759 Kentucky Utilities Co 102.19 The Potomac Edison APCo 120.93 Company 139,888 WPCo 120.93

WPCo 41,267 Tennessee $/month MAJOR CUSTOMERS: WVA Manufacturing (WV) KGPCo 91.58 Domtar Paper, LLC (TN) Black Diamond Power Co 3,956 Air Products & Chemicals Inc.(TN) ** Typical bills are displayed in $/month, based on Greif Brothers Corporation (VA) Virginia Customers 1,000 kWh of residential usage. Billing Georgia-Pacific Corporation (VA) amounts sourced from the EEI Typical Bills and Roanoke Electric Steel Corporation (VA) Virginia Electric & Power Co 2,405,875 Average Rates Report as of January 1, 2017. Steel of WV, Inc. (WV) Constellium Rolled Products (WV) The Goodyear Tire and Rubber Co. (VA) APCo 527,611 Felman Production, Inc (WV)

Kentucky Utilities Co 28,222 (Data for year ended December 2016)

Tennessee Customers KGPCo 47,489

* Customer counts are a 12-month average as of December 31, 2016 and were sourced from Sales_Ult_Cust_2016.xlsx at https://www.eia.gov/electricity/data/eia861/

Top 10 Customers = 27% of industrial sales Metropolitan areas account for 57% of ultimate sales102 persons per square mile (U.S. = 87) (Data for 12 months ended December 2016)

52nd EEI Financial Conference | aep.com 53 COMMISSION OVERVIEW Virginia State Corporation Commission

Commissioners

Number: 3 Appointed/Elected: Elected Term: 6 Years Political Makeup: R: 2 D: 1

Qualifications for Commissioners The Virginia State Corporation Commission (VSCC) is composed of three members elected by the General Assembly. Commissioners are elected to serve six-year terms, staggered in two year increments. The chair rotates annually among the three commissioners on February 1. Commissioners Mark C. Christie, (Rep.), since 2004; current term expires 2022. Prior counsel to the Speaker of the House of delegates of the Virginia General Assembly. Lawyer, private practice. Law degree from Georgetown.

Judith Williams Jagdmann, Chairman, (Rep.), since 2006; current term expires 2018. Law degree from T.C. Williams School of Law at the University of Richmond. Served as Deputy Attorney General for Civil Litigation Division from 1998 to 2005. Attorney General for Commonwealth of Virginia from 2005 to 2006. James C. Dimitri, (Dem.), since 2008; current term expires 2020. Prior to being named Commissioner, Dimitri was in private practice in Richmond. From 1994 to 2000 he served as Senior Counsel, then General Counsel at the SCC. He was an assistant Attorney General from 1983 to 1987. Dimitri received his undergraduate degree in economics from the University of Virginia and his J.D. from the Boston University School of Law.

AEP Regulatory Status

APCo-VA provides retail electric service in Virginia at unbundled rates. In early 2015, the General Assembly of VA passed the “Rate Freeze Law”, effective in July 2015. Under the new law, no changes can be made to the existing tariff rates until biennial rate reviews resume. For APCo, biennial reviews are suspended until 2020 with the first biennial review applying to the earnings for calendar years 2018 and 2019. APCo-VA is entitled to adjustments to fuel, transmission and certain other rates to recover its actual costs. Virginia currently has a voluntary renewable energy standard which phased in starting at 4% in 2010 and increases to 15% by 2025.

52nd EEI Financial Conference | aep.com 54 COMMISSION OVERVIEW Public Service Commission of West Virginia

Commissioners

Number: 3 Appointed/Elected: Appointed Term: 6 Years Political Makeup: R: 2 D: 1

Qualifications for Commissioners The West Virginia Public Service Commission (WVPSC) consists of three members, appointed by the Governor, with the advice and consent of the senate. No more than two members of the commission may belong to the same political party. The Commissioners serve six year staggered terms, with one term expiring as of July 1 of each odd numbered year. One Commissioner is designated as Chairman of the Commission by the Governor. The Chairman serves as the chief fiscal officer of the Commission. Commissioners Michael A. Albert, Chairman (Rep.), since 2007; term expires June 2019. Served as a member in the Business Law Department of Jackson Kelly. President and Chairman of the board of directors of the Kanawha County Public Library. Bachelor’s degree and Doctorate of Jurisprudence from West Virginia University. Renee A. Larrick, Commissioner (Rep.), since 2017; term expires June 2023. Former Business Manager for a private law firm. Served on the board of directors of the United Way of Southern West Virginia. Bachelor’s degree from University of Kentucky. Brooks McCabe, Commissioner (Dem.), since 2014; term expires June 2021. Commissioner McCabe is the Managing Member and Broker of West Virginia Commercial, LLC. Served as a Senator representing Kanawha County from 1998-2014. Doctor of Education degree from West Virginia University.

AEP Regulatory Status

APCo and Wheeling Power in WV provide retail electric service at bundled rates approved by the WV PSC. West Virginia has an active annual ENEC (Expanded Net Energy Cost) mechanism, which provides for a rate adjustment for fuel costs, among other items. In June 2016, the Commission authorized new rates through a construction surcharge and the ENEC.

52nd EEI Financial Conference | aep.com 55 COMMISSION OVERVIEW Tennessee Public Utility Commission Commissioners

Number: 5 Appointed/Elected: Appointed Term: 6 Years Qualifications for Commissioners The Tennessee Public Utility Commission (TPUC) directors are appointed, one each, by the Governor, Lieutenant Governor (as Speaker of the Senate), Speaker of the House and two joint appointments by the three together, and are confirmed by the Tennessee General Assembly. The directors are appointed for six and three-year staggered terms. The chairmanship rotates every year in an agreed upon decision by the directors. Commissioners Herbert H Hilliard, since 2012; current term expires June 2018. Former Executive Vice President and Chief Government Relations Officer for Frist Horizon National Corporation. Serves as Chairman of the Board of Directors of The National Civil Rights Museum, Board member of Blue Cross Blue Shield of Tennessee and Commissioner for the Memphis Shelby County Airport Authority. BBA in Personnel Administration and Industrial Relations from University of Memphis. David Jones, Chairman, since 2012; current term expires June 2018. President of Complete Holding Group. Certified facilitator/executive coach with the Alternative Board. BS in Business from University of Tennessee, Knoxville and an MBA from the University of Houston. Kenneth C. Hill, Director, since 2009; current term expires June 2022. At the time of his appointment to the commission, Hill was Chief Executive Officer of Appalachian Educational Communication Corporation and served as General Manager of five radio stations reaching portions of East Tennessee and four surrounding states. Doctor of Religious Education, Andersonville Baptist Seminary. Robin Morrison, Vice Chairman, since 2013; current term expires June 2020. Vice President and financial center manager for First Tennessee Bank. Member Chattanooga Bar Association Auxiliary. Bachelor’s degree in Business Administration-Finance from the University of Tennessee-Chattanooga. Keith Jordan, since 2017; current term expires June 2018. Former Tennessee state senator serving two terms. Served on Senate Judiciary, Government Operations, Transportation, and Energy and Conservation committees. Former Executive Director of the Tennessee Law Enforcement Planning Agency. Juris doctor from Vanderbilt University School of Law.

AEP Regulatory Status

Tennessee has no deregulation legislation and no base rate freeze or cap. Tennessee has an active fuel clause. In August 2016, the TPUC authorized new base rates in Kingsport Power Company’s first base rate case since 1992. Effective with the authorization, fuel, purchased power and PJM transmission charges have been removed from base rates and are now recovered through a single tracked surcharge.

52nd EEI Financial Conference | aep.com 56 OVERVIEW

President and Chief Operating Officer: Toby Thomas Since January 2017 16 years with AEP

Total Customers at 12/31/16: Residential 515,000 Commercial 70,000 Industrial 5,000 Indiana Michigan Power Company (I&M) Other 2,000 (organized in Indiana in 1907) is engaged in the generation, Total 592,000 transmission and distribution of electric power to approximately 592,000 retail customers in northern and eastern Indiana and southwestern Michigan, and in supplying and marketing electric power Owned Generating Capacity 3,626 MW at wholesale to other electric utility companies, rural electric cooperatives, municipalities and other market participants. As of PPA Capacity 1,539 MW* December 31, 2016, I&M had 2,475 employees. I&M is a member of Generating & PPA Capacity by Fuel Mix: PJM. • Coal: 46.4% • Nuclear: 44.1% PRINCIPAL INDUSTRIES SERVED: • Hydro, Wind & Solar: 9.5% Primary Metals Transmission Miles 5,163 Chemical Manufacturing Transportation Equipment Distribution Miles 20,425 Plastics and Rubber Products Fabricated Metal Product Manufacturing

*Includes 917 MW from AEP Generating Company Rockport Plant PPA

52nd EEI Financial Conference | aep.com 57 FINANCIAL & OPERATIONAL DATA

Capital Structure (in thousands)

2016** 9/30/2017* Capital Structure Debt Equity Total Debt Equity Total Credit Ratings/Outlook

Capitalization Per Balance Sheet 2,686,600 2,151,700 4,838,300 2,836,000 2,202,900 5,038,900 Moody's S&P % of Capitalization Per Balance Sheet 55.5% 44.5% 100.0% 56.3% 43.7% 100.0% FFO Interest Coverage 4.87 4.47^ Baa1/P A-/S FFO Total Debt 18.5% 16.6% ^ - calculated on rolling 12-month avg.

Summary of KWh Energy Sales*** Summary of Degree Days** (in millions of KWhs) 2016 2015 2014 30,000 (in degree days) 23,349 23,024 23,290 Actual 3,429 3,789 4,664 25,000 Heating Normal 3,779 3,762 3,737 5,100 5,041 5,104 20,000 Actual 1,039 798 714

hours Cooling - Normal 845 846 853 15,000 7,780 7,570 7,640

10,000 2017 Asset Data* (in thousands) Kilowatt 4,942 4,904 4,883 5,000 5,527 5,509 5,663 As of 9/30/17 - Total Assets $ 9,767,200 2016 2015 2014 Net Plant Assets $ 5,903,700 Residential Commercial Industrial Other Cash $ 1,300

* Source: 3Q17 Financial Statements (unaudited) ** Source: 2016 10K Financial Statements *** GWh Sales – Weather Normalized

52nd EEI Financial Conference | aep.com 58 CUSTOMER STATISTICS

INDIANA & MICHIGAN INVESTOR OWNED UTILITIES * TYPICAL BILL COMPARISON ** Indiana Customers Indiana $/month Michigan $/month

DTE Electric Duke Energy Indiana 812,993 SIGECo 157.04 Company 164.38

IP & L 486,827 NIPSCO 142.44 Consumers Energy 144.11 Duke Energy Indiana 118.76 I & M 112.30 NIPSCO 465,930 I & M 116.90 I & M 461,154 IP & L 113.27

SIGECo 144,400 ** Typical bills are displayed in $/month, based on 1,000 kWh of residential usage. Billing amounts Michigan Customers 1,779,184 sourced from the EEI Typical Bills and Average Rates Report as of DTE Electric Company 2,156,2142,168,567 January 1, 2017.

MAJOR CUSTOMERS: Consumers Energy 1,805,489

Steel Dynamics Inc. (IN) I & M 127,887 IN TEK (IN) Air Products & Chemicals Inc (IN) * Customer counts are a 12-month average as of December 31, Linde LLC (IN) 2016 and were sourced from Sales_Ult_Cust_2016.xlsx at Michelin North America (IN) https://www.eia.gov/electricity/data/eia861/ Ardagh Glass Inc ((IN) Metal Technologies Inc. (MI) Top 10 Customers = 45% of industrial sales Guardian Industries Corp (IN) Metropolitan areas account for 66% of ultimate sales Unifrax Corporation (IN) Honeywell International Inc (IN) 205 persons per square mile (U.S. = 87) (Data for 12 months ended December 2016) (Data for year ended December 2016)

52nd EEI Financial Conference | aep.com 59 COMMISSION OVERVIEW Indiana Utility Regulatory Commission Commissioners

Number: 5 Appointed/Elected: Appointed Term: 4 Years Political Makeup: R: 3 D: 2 Qualifications for Commissioners Five members, appointed by the Governor from among persons nominated by a legislatively mandated utility commission nominating committee; four-year, staggered terms, full-time positions. Not more than three of the members of the IURC shall be members of the same political party. At least one of the commissioners must be an attorney qualified to practice law before the Indiana Supreme Court. The Governor appoints one of the five as chairperson. Commissioners James D. Atterholt, Chair, (Rep.), Since 2017; current term ends February 2020. Served as the Commission’s Chairman previously before taking a break in service to serve as chief of staff to the Governor. Also served as State Insurance Commissioner and as a State Representative. Former member of the board of directors for the Organization of MISO States and the Organization of PJM States. Undergraduate degree from the University of Wisconsin. Sarah Freeman, Commissioner ( Dem.), since 2016; current term ends January 2018. Former senior staff attorney with the nonpartisan Indiana Legislative Services Agency for 16 years. Served as a deputy attorney general with the Office of the Indiana Attorney General. Undergraduate degrees in psychology, French and political science from Indiana University – Bloomington and her juris doctor degree from the Indiana University Maurer School of Law. Angela Weber, Commissioner (Rep.), since 2014; current term ends April 2018. Former Marion County deputy prosecuting attorney, former staff attorney for the Indiana Department of Education. Received juris doctor from the Indiana University Maurer School of Law in 2006. David E. Ziegner, Commissioner (Dem.), since 1990; current term ends April 2019. Lawyer, staff attorney for Legislative Services Agency, General Counsel for IURC. Treasurer of NARUC, vice-chair NARUC Committee on Electricity and former chairman of the NARUC clean coal and carbon sequestration subcommittee. Law degree from the Indiana University School of Law in Indianapolis.

James Huston, Commissioner (Rep.), Since September 2014; current term ends March 2021. Currently serves as Chief to Staff at the Indiana State Department of Health. Prior to that also served as assistant deputy treasurer and Deputy Commissioner for the Bureau of Motor Vehicles. Huston received his undergraduate degree from Ball State University.

AEP Regulatory Status

I&M provides retail electric service at bundled rates approved by the IURC. Rates are set on a cost-of-service basis with a fuel recovery mechanism. I&M has trackers in place for PJM expenses, OSS sharing, clean coal technology, environmental, nuclear life cycle management, solar pilot project costs, DSM, home energy management and work energy management. Indiana currently has a voluntary renewable standard which phases in starting at 4% and ending at 10% from 2013-2025. The State recently implemented a 300 day rate case procedural schedule along with a forward looking test year. A new law signed in May 2017 gradually lowers the retail rate compensation for residents who install solar or wind power. I&M filed a base rate case on July 26, 2017.

52nd EEI Financial Conference | aep.com 60 COMMISSION OVERVIEW Michigan Public Service Commission

Commissioners

Number: 3 Appointed/Elected: Appointed Term: 6 Years Political Makeup: I: 2 R: 1 Qualifications for Commissioners The Michigan Public Service Commission (MPSC) is composed of three members appointed by the Governor with the advice and consent of the Senate. Commissioners are appointed to serve staggered six-year terms. No more than two commissioners may represent the same political party. One commissioner is designated as chairman by the Governor. Commissioners Rachel Eubanks, Commissioner, (Rep.), since 2016; current term expires July 2023. Worked in public finance for 13 years, most recently as a director at Robert W. Baird & Co. Inc. Holds a bachelor’s degree in economics from the University of Michigan. Sally Talberg, Chairman (Ind.), since 2013; current term expires July 2021. Former senior consultant at Public Sector Consultants. Previously served as an analyst at the MPSC, managed enforcement and contested cases at the Michigan Department of Environmental Quality and advised commissioners at the Public Utility Commission of Texas. Holds a bachelor of science from Michigan State University and a masters of Public Administration from the University of Texas – Austin.. Norman J. Saari, Commissioner, (Ind.) , since 2015; current term expires July 2019. Served as an executive director of governmental affairs for 20 years at the Consumers Energy Company. Commissioner Saari is a member of the National Association of Regulatory Utility Commissioners and sits on the Board of Directors of the Organization of PJM States, Inc. Earned a bachelor’s degree from Michigan State University.

AEP Regulatory Status

Customer choice began in January 2002. Generation was not deregulated. Retail rates were unbundled (though they continue to be regulated) to allow customers to evaluate generation costs. Public Acts 341 and 342 were approved in late 2016 which provided significant energy law updates for electric utilities: • The deadline for rate cases to be completed has been shortened from 12 months to 10 months and removed ability for “self-implementation” of rates. • Required to submit integrated resource plans for MPSC review and approval. • Utilities required to demonstrate they have enough resources to service anticipated loads. • Offer a voluntary green pricing program where customers can specify the amount of renewable energy provided. • 15% of generation must be from renewables by 2021. In 2017, the MPSC adjusted the electric choice cap for utilities serving less than 200,00 customers and who have not had any load served by an alternative energy supplier (AES) in the preceding four years. I&M’s cap is currently set at zero. I&M has an active fuel clause that recovers fuel, purchased energy and capacity, PJM expenses, consumables expenses and off-system sales. Return on CWIP can be included in base rates. Michigan also has a DSM rider and has approved deferral of nuclear life cycle management costs from 2013-2018. I&M filed a base rate case on May 15, 2017.

52nd EEI Financial Conference | aep.com 61 OVERVIEW

President and Chief Operating Officer: Matthew Satterwhite

Since December 2016 9 years with AEP

Total Customers at 12/31/16: Kentucky Power Company (KPCo) Residential 137,000 (organized in Kentucky in 1919) is engaged in the generation, Commercial 30,500 transmission and distribution of electric power to approximately 169,000 retail customers in eastern Kentucky, Industrial 1,000 and in supplying and marketing electric power at wholesale to Other 500 other electric utility companies, municipalities and other market participants. As of December 31, 2016, KPCo had Total 169,000 550 employees. KPCo is a member of PJM. Owned Generating Capacity 1,060 MW PPA Capacity 393 MW* PRINCIPAL INDUSTRIES SERVED: Generating & PPA Capacity by Fuel Mix: Petroleum and Coal Products Manufacturing Coal Mining • Coal: 80.7% Primary Metals • Natural Gas: 19.3% Chemical Manufacturing Oil and Gas Extraction Transmission Miles 1,268 Distribution Miles 10,042

*Represents 393 MW from AEP Generating Company Rockport Plant PPA

52nd EEI Financial Conference | aep.com 62 FINANCIAL & OPERATIONAL DATA

Capital Structure (in thousands)

2016** 9/30/2017* Capital Structure Debt Equity Total Debt Equity Total Capitalization Per Balance Sheet 868,971 668,401 1,537,372 879,316 662,164 1,541,480 Credit Ratings/Outlook % of Capitalization Per Balance Sheet 56.5% 43.5% 100.0% 57.0% 43.0% 100.0% Moody's S&P FFO Interest Coverage 3.32 3.48^ FFO Total Debt 12.3% 13.3% Baa2/S A-/S ^ - calculated on rolling 12-month avg.

Summary of KWh Energy Sales*** (in millions of KWhs) Summary of Degree Days 2016 2015 2014 7,000 5,921 6,319 6,557 (in degree days) 6,000 Actual 2,233 2,482 2,928 Heating Normal 2,462 2,446 2,438 5,000 2,693 2,810 2,408 Actual 1,543 1,096 933

hours 4,000 Cooling - Normal 1,172 1,180 1,184 3,000 1,303 1,327 1,355

Kilowatt 2,000 2017 Asset Data* (in thousands) 1,000 2,115 2,198 2,287 As of 9/30/17 Total Assets $ 2,430,874 - Net Plant Assets $ 1,768,103 2016 2015 2014 Cash $ 770 Residential Commercial Industrial Other * Source: 3Q17 Financial Statements (unaudited) ** Source: 2016 Annual Financial Statements *** GWh Sales – Weather Normalized

52nd EEI Financial Conference | aep.com 63 CUSTOMER STATISTICS

KENTUCKY INVESTOR OWNED UTILITIES * TYPICAL BILL COMPARISON ** Kentucky Customers Kentucky $/month Kentucky Utilities 518,843 KPCo 132.71 LG & E 404,744 LG & E 105.28 KPCo 168,848 Kentucky Utilities 99.18 Duke Energy Kentucky 140,014 Duke Energy Kentucky 85.44

* Customer counts are a 12-month average as of December 31, ** Typical bills are displayed in $/month, based on 1,000 kWh of 2016 and were sourced from Sales_Ult_Cust_2016.xlsx at residential usage. Billing amounts sourced from the EEI https://www.eia.gov/electricity/data/eia861/ Typical Bills and Average Rates Report as of January 1, 2017.

MAJOR CUSTOMERS:

Catlettsburg Refining LLC Markwest Energy Appalachia LLC Top 10 customers = 76% of industrial sales Air Products & Chemicals, Inc. AK Steel Holding Corporation Metropolitan areas account for 44% of ultimate sales Air Liquide 68 persons per square mile (U.S. = 87) Calgon Carbon Corp Czar Coal Corporation (Data for 12 months ended December 2016) Huntington Alloys Tennessee Gas Pipeline Co M C Mining, Inc.

(Data for year ended December 2016)

52nd EEI Financial Conference | aep.com 64 COMMISSION OVERVIEW Kentucky Public Service Commission

Commissioners

Number: 3 Appointed/Elected: Appointed Term: 4 Years Political Makeup: R: 3 D: 0 Qualifications for Commissioners Typically three members, appointed by the governor and confirmed by the state Senate for four-year, staggered terms, full-time positions. The governor appoints one of the three as chairman and another of the three as vice chairman to serve in the chairman’s absence. Not more than two members of the KPSC shall be of the same profession or occupation. Commissioners Michael J. Schmitt, Chairman (Rep.), Appointed June 2016; current term expires June 30, 2019. Prior to joining the PSC Chairman Schmitt was a partner at the law firm Porter, Schmitt, Banks and Baldwin where he specialized in energy and education law. J.D. from the University of Kentucky College of Law. Robert Cicero, Vice Chairman (Rep.), since April 2016; current term expires June 30, 2020. Before joining the PSC, Mr. Cicero, was a small business owner and business executive. Vice Chairman Cicero served for 10 years as CFO and Treasurer for Aristech Acrylics LLC. He also has 20 years experience in various managerial and financial positions with US Steel and its affiliates. He has a MBA from the Joseph M. Katz Graduate School of Management and a BS in Accounting from the University of Pittsburgh. Talina R. Mathews, Commissioner (Rep.), since July 2017; current term expires June 30, 2021. Prior to appointment as commissioner, Mathews served as executive director of the Public Service Commission. She has also served as executive director of the Governor’s Office of Energy Policy. She is on the board of directors of the Organization of MISO States and the Organization of PJM States. She has a Doctor of Philosophy and a Master of Arts in economics from the University of Kentucky.

AEP Regulatory Status

KPCo provides retail electric service at regulated bundled rates in Kentucky. Kentucky has an environmental surcharge to recover approved environmental costs and it has an active fuel clause. Kentucky also has an OSS sharing mechanism and a monthly adjustment clause in place for DSM. KPCo last implemented base rates in 2015. Kentucky does not have a renewable portfolio standard. Kentucky filed a base rate case on July 26, 2017.

52nd EEI Financial Conference | aep.com 65 OVERVIEW President and Chief Operating Officer: Julie Sloat

Since May 2016 17 years with AEP

AEP Ohio - Ohio Power Company (OPCo) (organized in Ohio in 1907 and re-incorporated in 1924) is engaged in the transmission and distribution of electric power to Total Customers at 12/31/16: approximately 1,472,000 retail customers in Ohio. Following corporate separation of OPCo's generation assets in December Residential 1,282,000 2013, OPCo purchases energy and capacity to serve generation Commercial 177,000 service customers. As of December 31, 2016, OPCo had 1,582 employees. OPCo is a member of PJM. Industrial 10,000 Other 3,000 Total 1,472,000 PRINCIPAL INDUSTRIES SERVED: Primary Metals PPA Capacity 646 Petroleum and Coal Products Manufacturing PPA Capacity by Fuel Mix: Chemical Manufacturing • Coal: 67.6% Rubber & Plastic Products Fabricated Metal Products • Wind & Solar: 32.4%

Transmission Miles 7,866 Distribution Miles 45,727

52nd EEI Financial Conference | aep.com 66 FINANCIAL & OPERATIONAL DATA

Capital Structure (in thousands) 2016** 9/30/2017* Capital Structure Debt Equity Total Debt Equity Total Credit Ratings/Outlook Capitalization Per Balance Sheet 1,763,900 2,117,500 3,881,400 1,886,600 2,217,800 4,104,400 % of Capitalization Per Balance Sheet 45.4% 54.6% 100.0% 46.0% 54.0% 100.0% Moody's S&P FFO Interest Coverage 6.54 6.12^ A2/S A-/S FFO Total Debt 37.8% 28.9% ^ - calculated on rolling 12-month avg.

Summary of KWh Energy Sales*** Summary of Degree Days** (in millions of KWhs) 2016 2015 2014 60,000 (in degree days) Actual 2,957 3,235 3,734 50,000 42,985 43,408 43,326 Heating

Normal 3,245 3,226 3,230 40,000 Actual 1,248 975 949

14,285 14,653 14,541 Cooling hours

- Normal 969 970 960 30,000

20,000 14,514 14,468 14,326

Kilowatt 2017 Asset Data* (in thousands) 10,000 14,055 14,159 14,328 As of 9/30/17 - Total Assets $ 7,055,000 2016 2015 2014 Net Plant Assets $ 5,580,300 Residential Commercial Industrial Other Cash $ 3,100

* Source: 3Q17 Financial Statements (unaudited) ** Source: 2016 10K Financial Statements *** GWh Sales – Weather Normalized

52nd EEI Financial Conference | aep.com 67 CUSTOMER STATISTICS

OHIO INVESTOR OWNED UTILITIES* TYPICAL BILL COMPARISON**

Ohio Customers Ohio $/month AEP Ohio 1,467,725 AEP Ohio (OPCo) 135.25 FE (Ohio Edison) 1,041,123 AEP Ohio (CSPCo) 126.77 Duke Energy Ohio Inc 119.63 FE (CEI) 747,747 FE (Toledo Edison) 118.79 Duke Energy Ohio Inc 706,793 FE (Ohio Edison) 115.92 DP&L 517,570 FE (CEI) 115.23 FE (Toledo Edison) 309,060 DP&L 112.41

* Customer counts are a 12-month average as of December 31, ** Typical bills are displayed in $/month, based on 1,000 2016 and were sourced from Sales_Ult_Cust_2016.xlsx at kWh of residential usage. Billing amounts sourced from https://www.eia.gov/electricity/data/eia861/ the EEI Typical Bills and Average Rates Report as of January 1, 2017. Ohio rates represent standard service offer bundled residential rates.

Top 10 AEP Ohio customers = 32% of industrial sales MAJOR CUSTOMERS: Metropolitan areas account for 66% of ultimate sales Lima Refining Co. 169 persons per square mile (U.S. = 87) Timken Steel Corporation (Data for 12 months ended December 2016) Globe Metallurgical, Inc. Republic Steel Markwest Utica EMG, LLC Marathon Petroleum Company LP Eramet Marietta, Inc. Owens Corning Sales, LLC Cardinal Gas Services, LLC Airgas Merchant Gases, LLC

(Data for year ended December 2016)

52nd EEI Financial Conference | aep.com 68 COMMISSION OVERVIEW Ohio Public Utilities Commission Commissioners

Number: 5 Appointed/Elected: Appointed Term: 5 Years Political Makeup: R: 2 D: 1 I: 2 Qualifications for Commissioners Five members, appointed by the governor and confirmed by the state senate; five-year staggered terms, full-time positions, commissioners shall be selected from the lists of qualified persons submitted to the governor by the PUC nominating council. Not more than three of the members of the PUCO shall be members of the same political party. The governor appoints one of the five as chairman, who serves at the pleasure of the governor until a successor has been designated.

Commissioners Asim Haque, Chairman, (Ind.) since 2013; term expires April 2021. Prior to joining the commission was assistant counsel at Honda North America. Prior to that was an attorney with Ice Miller LLP. Bachelor’s degrees in chemistry and political science from Case Western Reserve University and Juris Doctorate from Ohio State University.

M. Beth Trombold, Commissioner, (Ind.) since 2013; term expires April 2018. Prior to joining the commission, was the assistant director of the Ohio Development Services Agency. Prior to that was on PUC staff for 16 years. Bachelor’s degree in business administration from Ohio University and master’s in public policy from Ohio State University. Thomas W. Johnson, Commissioner, (Rep.) , since 2014; term expires April 2019. Prior to joining the commission, was on the Ohio House of Representatives for 22 years serving Southeastern Ohio. After that served as Governor Bob Taft’s director of the Office of Budget and Management from 1999 to 2006. Bachelor’s degree in government from Muskingum University. Lawrence Friedeman, Commissioner, (Dem.), since 2017; term expires April 2020. Prior to joining the commission, was employed as vice president of regulatory affairs and compliance at IGS Energy. Received undergraduate and graduate degrees from the University of Pittsburgh and the University of Pittsburgh School of Law. Daniel Conway, Commissioner, (Rep.) since 2017; term expires April 2022. Practiced energy and telecommunications law for more than 35 years representing utilities and telecommunications companies before the PUCO. Serves as an adjunct professor at The Ohio State University. Bachelor’s degree in physics from Miami University and law degree from the University of Michigan.

AEP Regulatory Status

OPCo currently has an approved electric security plan through May 2018. There is a stipulation pending in the Electric Security Plan Extension case which if approved will set rates through May 2024. Transmission rates are currently regulated by FERC as reflected in the OATT and billed to retail customers via the basic transmission cost rider.

52nd EEI Financial Conference | aep.com 69 OVERVIEW President and Chief Operating Officer: Stuart Solomon Since June 2004 28 years with AEP

Total Customers at 12/31/16: Public Service Company of Oklahoma (PSO) Residential 471,000 (organized in Oklahoma in 1913) is engaged in the generation, transmission and distribution of electric power to approximately Commercial 63,000 548,000 retail customers in eastern and southwestern Oklahoma, Industrial 6,000 and in supplying and marketing electric power at wholesale to other electric utility companies, municipalities, rural electric cooperatives Other 8,000 and other market participants. At December 31, 2016, PSO had Total 548,000 1,110 employees. PSO is a member of SPP.

Owned Generating Capacity 3,940 MW Gas PPA Capacity 1,023 MW PRINCIPAL INDUSTRIES SERVED: Paper Manufacturing Wind PPA Capacity 1,137 MW Oil & Gas Extraction Generating & PPA Capacity by Fuel Mix: Transportation Equipment • Coal 9.4% Plastics and Rubber Products • Natural Gas 72.0% Oil Refining and Steel Processing • Wind 18.6%

Transmission Miles 3,271 Distribution Miles 19,886

52nd EEI Financial Conference | aep.com 70 FINANCIAL & OPERATIONAL DATA Capital Structure (in thousands)

2016** 9/30/2017* Capital Structure Debt Equity Total Debt Equity Total Credit Ratings/Outlook Capitalization Per Balance Sheet 1,338,000 1,214,100 2,552,100 1,404,400 1,232,400 2,636,800 % of Capitalization Per Balance Sheet 52.4% 47.6% 100.0% 53.3% 46.7% 100.0% Moody's S&P A3/S A-/S FFO Interest Coverage 3.81 5.22^ FFO Total Debt 11.4% 14.6%^ ^ - calculated on rolling 12-month avg.

Summary of KWh Energy Sales*** Summary of Degree Days** (in millions of KWhs) 2016 2015 2014 18,167 17,941 17,883 (in degree days) 20,000

Actual 1,341 1,588 2,113 1,249 1,242 1,260 Heating 15,000 Normal 1,778 1,774 1,777 5,534 5,410 5,237 hours 2,444 2,182 - Actual 2,054 Cooling 10,000 Normal 2,132 2,127 2,130 5,229 5,146 5,133

Kilowatt 5,000 6,155 6,143 6,253 2017 Asset Data* (in thousands) - 2016 2015 2014 As of 9/30/17 Residential Commercial Industrial Other Total Assets $ 4,478,500 Net Plant Assets $ 3,857,900 *Source: 3Q17 Financial Statements (unaudited) Cash $ 2,100 **Source: 2016 10-K Financial Statements ***GWh Sales – Weather Normalized

52nd EEI Financial Conference | aep.com 71 CUSTOMER STATISTICS

OKLAHOMA INVESTOR OWNED UTILITIES * TYPICAL BILL COMPARISON **

Oklahoma Customers Oklahoma $/month PSO 547,142 Empire District 97.06 OG&E 763,758 OG&E 91.62 Empire District 4,686 PSO 89.84

* Customer counts are a 12-month average as of December 31, ** Typical bills are displayed in $/month, based on 2016 and were sourced from Sales_Ult_Cust_2016.xlsx at 1,000 kWh of residential usage. Billing amounts https://www.eia.gov/electricity/data/eia861/ sourced from the EEI Typical Bills and Average Rates Report as of January 1, 2017.

MAJOR CUSTOMERS: International Paper Company Kimberly Clark Corp Goodyear Tire & Rubber Company Top 10 customers = 44% of industrial sales HollyFrontier Corporation Metropolitan areas account for 75% of ultimate American Airlines sales 49 persons per square mile (U.S. = 87) Enable Product, LLC. (Data for 12 months ended December 2016) Terra Nitrogen Republic Paperboard

(Data for year ended December 2016)

52nd EEI Financial Conference | aep.com 72 COMMISSION OVERVIEW Oklahoma Corporation Commission

AEP Regulated Electric Utilities

Public Service Company of Oklahoma

Commissioners Number: 3 Appointed/Elected: Elected Term: 6 Years Political Makeup: R: 3 D: 0

Qualifications for Commissioners The Oklahoma Corporation Commission (OCC) is composed of three commissioners who are elected by state-wide vote. Commissioners serve staggered six-year terms. The election pattern was established when the Commission was created by the state constitution. Commissioners Bob Anthony, Commissioner, (Rep.), since 1989; current term expires January 2019. Member, NARUC. Served on the boards of the Oklahoma State, Oklahoma City and South Oklahoma City chambers of commerce. Earned an M.Sc. from the London School of Economics, an M.A. from Yale University and an M.P.A. from the Kennedy School of Government at Harvard University. Todd Hiett, Vice Chairman (Rep.), since 2015; current term ends January 2021. Elected to the Oklahoma House of Representatives in 1994, selected as House Minority Leader in 2002 and Speaker of House from 2004-2006. After 12 years in the Legislature, he returned to the business world and ran his cattle ranch until his election as a Commissioner. He received his undergraduate degree in Animal Science/Business from Oklahoma State University. Dana Murphy, Chairman (Rep.), since 2008; current term expires January 2023. Member, NARUC. Murphy’s prior experience includes working as an administrative law judge at the Commission. She has more than 20 years experience in the petroleum industry including owning and operating her own private law practice and working as a geologist in the Oklahoma petroleum industry. Juris Doctorate Oklahoma City University.

AEP Regulatory Status

PSO provides retail electric service in Oklahoma at bundled rates approved by the OCC. PSO’s rates are set on a cost-of-service basis. Fuel and purchased power costs are recovered by applying a fuel adjustment factor to retail kilowatt-hour sales. The factor is generally adjusted annually and is based upon forecasted fuel and purchased energy costs. Over- or under-collections of fuel costs for prior periods are returned to or recovered from customers when new annual factors are established. PSO has an OSS margin sharing mechanism. Oklahoma currently has a voluntary renewable energy standard of 15% by 2015. PSO filed a base rate case on June 30, 2017.

52nd EEI Financial Conference | aep.com 73 OVERVIEW

President and Chief Operating Officer: Venita McCellon-Allen Since July 2010 34 years with AEP

Southwestern Electric Power Company (SWEPCo) (organized in Delaware in 1912) is engaged in the generation, transmission and distribution of electric power to approximately 533,000 retail customers Total Customers at 12/31/16: in northeastern and panhandle of Texas, northwestern Louisiana and Residential 452,000 western Arkansas, and in supplying and marketing electric power at wholesale to other electric utility companies, municipalities, rural electric Commercial 73,500 cooperatives and other market participants. At December 31, 2016, Industrial 7,000 SWEPCo had 1,486 employees. The territory served by SWEPCo also includes several military installations, colleges and universities. SWEPCo Other 500 also owns and operates a lignite coal mining operation. SWEPCo is a Total 533,000 member of SPP. Owned Generating Capacity 5,225 MW PPA Capacity 595 MW PRINCIPAL INDUSTRIES SERVED: Generating & PPA Capacity by Fuel Mix: Oil and Gas Extraction • Coal: 45.1% Petroleum & Coal Products Manufacturing Primary Metals • Natural Gas: 46.8% Food Manufacturing • Wind: 8.1% Paper Manufacturing Transmission Miles 4,101 Distribution Miles 25,096

52nd EEI Financial Conference | aep.com 74 FINANCIAL & OPERATIONAL DATA Capital Structure (in thousands)

2016** 9/30/2017* Capital Structure Debt Equity Total Debt Equity Total Credit Ratings/Outlook Capitalization Per Balance Sheet 2,679,100 2,215,200 4,894,300 2,504,100 2,257,100 4,761,200 % of Capitalization Per Balance Sheet 54.7% 45.3% 100.0% 52.6% 47.4% 100.0% Moody's S&P

FFO Interest Coverage 4.58 4.12^ Baa2/S A-/S FFO Total Debt 16.5% 14.9% ^ - calculated on rolling 12-month avg.

Summary of KWh Energy Sales*** (in millions of KWhs) Summary of Degree Days** 30,000 2016 2015 2014 23,447 23,888 24,482 25,000 (in degree days)

Actual 917 1,168 1,553 6,241 Heating

20,000 6,190 6,252 Normal 1,208 1,204 1,230 hours

- Actual 2,516 2,450 2,043 15,000 5,074 5,370 5,901 Cooling Normal 2,298 2,293 2,279

10,000 6,031 6,032 6,032 Kilowatt 2017 Asset Data* (in thousands) 5,000 6,152 6,234 6,308 - As of 9/30/17 2016 2015 2014 Total Assets $ 7,555,900 Net Plant Assets $ 6,549,800 Residential Commercial Industrial Other Cash $ 2,200

*Source: 3Q17 Financial Statements (unaudited) **Source: 2016 10-K Financial Statements ***GWh Sales – Weather Normalized

52nd EEI Financial Conference | aep.com 75 CUSTOMER STATISTICS SOUTHWESTERN INVESTOR TYPICAL BILL COMPARISON ** OWNED UTILITIES *

Arkansas Customers Arkansas $/month Louisiana $/month Texas $/month OG&E 77.12 Entergy Gulf St 85.29 SWEPCo 86.29 SWEPCo 118,043 SWEPCo 83.56 SWEPCo 85.93 SPSCo 106.68 Entergy AR 706,871 Entergy AR 99.65 Entergy LA 91.30 Entergy TX 117.31 OG&E 66,299 Entergy New Empire Empire District 110.71 Orleans 115.24 El Paso 123.73 District 4,464 CLECO 117.25

Louisiana Customers ** Typical bills are displayed in $/month, based on 1,000 kWh of residential usage. Billing amounts sourced from the EEI Typical Bills and Average Rates Report as of January 1, 2016. SWEPCo 230,040 CLECO 284,625 Entergy LA 1,268,665 MAJOR CUSTOMERS:

XTO Energy (TX) Texas Customers Domtar Corporation (AR) SWEPCo 184,569 Calumet Lubricants (LA) International Paper Company (TX) El Paso 312,066 Cooper Tire & Rubber Company (AR) SPSCo 269,313 Pratt Paper, LLC (LA) Air Liquide Large Industries (TX) Entergy TX 439,570 Pilgrim Pride (TX) Glad Manufacturing Company (AR) * Customer counts are a 12-month average as of December 31, 2016 and were sourced from Sales_Ult_Cust_2016.xlsx at US Steel Tubular Products, Inc. (TX) https://www.eia.gov/electricity/data/eia861/ (Data for year ended December 2016) Top 10 customers = 38% of industrial sales Metropolitan areas account for 72% of ultimate sales 70 persons per square mile (U.S. = 87) (Data for 12 months ended December 2016)

52nd EEI Financial Conference | aep.com 76 COMMISSION OVERVIEW Arkansas Public Service Commission

Commissioners

Number: 3 Appointed/Elected: Appointed Term: 6 Years Political Makeup: R: 1 D: 2

Qualifications for Commissioners The Arkansas Public Service Commission (APSC) is composed of 3 members. The Governor appoints the Commissioners as well as the Chairman. Governor Asa Hutchinson appointed Chairman Thomas and Commissioner O’Guinn while former Governor Mike Beebe appointed Commissioner Wills. Commissioners

Ted Thomas, Chairman (Rep.), since 2015; current term expires in Jan 2021. Commissioner Thomas previously served as Chief Deputy Prosecuting Attorney, Administrative Law Judge at the Public Service Commission, Budget Director for the Governor and in the Arkansas House of Representatives. Chairman Thomas received his Juris Doctorate from the University of Arkansas School of Law. Kimberly A. O’Guinn. Commissioner (Dem.), since 2016; current term expires in Jan 2023. Served as Director of Communications for the Arkansas Department of Environmental Quality. Received her Bachelor of Science in Environmental Engineering from the University of Oklahoma. Elana C. Wills, Commissioner (Dem.), since 2011; current term expires Jan 2019. Served as an Associate Justice on the Arkansas Supreme Court by gubernatorial appointment from October 2008 – December 2010. Received her Juris Doctorate from the University of Arkansas School of Law in Fayetteville.

AEP Regulatory Status

SWEPCo-AR provides service at regulated bundled rates in Arkansas. Arkansas has an active fuel pass-through clause. Arkansas has an OSS margin sharing mechanism. Arkansas allows a forward looking test year that can be based on six months actual and 6 months budget data. Arkansas also allows adjustments to the test year for all known and measurable changes which occur within twelve months after the end of the test year.

52nd EEI Financial Conference | aep.com 77 COMMISSION OVERVIEW Louisiana Public Service Commission

Commissioners

Number: 5 Appointed/Elected: Elected Term: 6 Years Political Makeup: R: 3 D: 2 Qualifications for Commissioners The Louisiana Public Service Commission (LPSC) is composed of five elected members. The commissioners serve overlapping terms of six years. Commissioners Mike Francis, Commissioner, (Rep.), since 2016; current term ends December 2022. Past founder and chief executive officer of Francis Drilling Fluids, Ltd; one of the oldest drilling fluids companies on the Gulf Coast. Chairman of the Republican Party in Louisiana from 1994- 2000. Foster L. Campbell, Commissioner, (Dem.), since 2003; current term ends December 2020. Member, Louisiana State Senate (1976- 2002). Independent insurance businessman and farmer, former school teacher and agricultural products salesman. Bachelor’s degree from Northwestern State University. Lambert C. Bossiere, III, Commissioner, (Dem.), since 2005; current term ends December 2022. B.S. Business Administration from Southern University. Former First City Court Constable for the City of New Orleans. Member of NARUC. Eric Skrmetta, Chairman, (Rep.), since 2009; current term ends December 2020. Practicing Attorney since 1985. Practicing Mediator since 1989. Republican State Central Committee District 81. Juris Doctorate from Southern University Law School. Craig Green, Commissioner-Elect, (Rep.), won the primary election for the seat in October 2017 and will replace Interim Commissioner , Damon Baldone (recently appointed by the Governor to temporarily fill the vacant seat). Orthopedic surgeon in Baton Rouge. Undergraduate and medical degrees from Louisiana State University and holds an MBA from Yale University.

AEP Regulatory Status

SWEPCo-LA provides service at regulated bundled rates in Louisiana. Louisiana has an active fuel pass-through clause and an OSS margin sharing mechanism. All IOUs are regulated pursuant to formula rate plans (FRP). Louisiana has allowed CWIP return on new generation projects, in limited circumstances. The FRP was implemented for SWEPCo on August 1, 2008 with annual true-ups required. The LPSC recently extended the FRP to cover the 2015 and 2017 test years. SWEPCo currently has its 2015 FRP filing (for test year 2014) pending before the LPSC.

52nd EEI Financial Conference | aep.com 78 COMMISSION OVERVIEW Public Utility Commission of Texas

Commissioners

Number: 3 Appointed/Elected: Appointed Term: 6 Years Political Makeup: R: 3 D: 0 Qualifications for Commissioners To be eligible for appointment, a commissioner must be: a qualified voter and a citizen of the U.S.; a competent and experienced administrator; well informed and qualified in the field of public utilities and public utility regulation; and, have at least five years of experience in the administration of business or government or as a practicing attorney or certified public accountant. Chairman appointed by the Governor. Commissioners DeAnn Walker, Chairman, (Rep.), since 2017, current term expires September 2021. Previously served as senior policy advisor to current Governor Abbott related to policy matters on regulated industries. Also served as director of regulatory affairs and as an associate general counsel for CenterPoint Energy. Received a law degree from the South Texas College of Law. Kenneth W. Anderson Jr., Commissioner, (Rep.), since 2008; current term expired August 2017. Past Director of Governmental Appointments under former Governor Perry. Prior to that Anderson served in private practice as a corporate attorney in the area of securities law and regulatory matters. He also served as a member of the Texas Securities Board from 1999-2006. Anderson holds a law degree from Southern Methodist University. Brandy Marty Marquez , Commissioner, (Rep.), since 2013; current term expires September 2019. Formerly Governor Perry’s chief of staff. Has also held positions as: governor’s Deputy Chief of Staff, Director of the Budget, Planning and Policy Division and deputy legislative director/liaison to the Texas House of Representatives. Bachelor’s degree in government from University of Texas and Juris Doctorate from St Mary’s University.

AEP Regulatory Status

Retail competition in the SPP area of Texas, including SWEPCo’s, has been delayed by legislation. SWEPCo-TX has an active fuel pass- through clause as well as OSS margin sharing. In limited circumstances, CWIP is allowed in rate base. Texas has a mandatory, statewide renewable installed capacity requirement of 5,880 MW by 2015 and a target of 10,000 MW by 2025, which it has surpassed. SWEPCo-TX implemented a new Distribution Cost Recovery Factor (DCRF) in Texas on July 1, 2016 and filed a base rate case on December 16, 2016.

52nd EEI Financial Conference | aep.com 79 OVERVIEW

President and Chief Operating Officer: Judith Talavera Since June 2016 17 years with AEP

AEP Texas (organized in Delaware in 1925) was formed by the merger of AEP Texas Central Company and AEP Texas North Company on December 31, 2016 and is engaged in the transmission and distribution of electric power to approximately 1,024,000 retail customers in west and south Texas. The total output from AEP Texas North’s remaining active generating unit (Oklaunion Plant) is sold to an affiliate at AEP Texas North’s cost pursuant to an agreement effective through 2027. The territory served by AEP Texas also includes several military installations. At December 31, 2016, AEP Texas had 1,500 employees. AEP Texas is a member of ERCOT. Total Customers at 12/31/16: Residential 860,000 MAJOR CUSTOMERS: PRINCIPAL INDUSTRIES SERVED: Commercial 148,000 Formosa Utility Venture Petroleum & Coal Products Manufacturing Valero Energy Corporation Industrial 9,000 Chemical Manufacturing Markwest Energy Partners Other 7,000 Flint Hills Resources Oil and Gas Extraction Equistar Bay City Food Manufacturing Total 1,024,000 Pipeline Transportation Owned Generating Capacity 355 MW (Data for year ended December 2016) Generating Capacity by Fuel Mix: • Coal 100.0% Top 10 customers = 54% of industrial sales Metropolitan areas account for 74% ultimate Transmission Miles 8,400 sales 31 persons per square mile (U.S. = 87) Distribution Miles 43,182 (Data for 12 months ended December 2016)

52nd EEI Financial Conference | aep.com 80 FINANCIAL & OPERATIONAL DATA

Capital Structure (in thousands)

2016** 9/30/2017* Capital Structure Debt^ Equity Total Debt^ Equity Total Credit Ratings/Outlook Capitalization Per Balance Sheet 3,387,200 1,657,100 5,044,300 3,722,500 2,004,600 5,727,100 % of Capitalization Per Balance Sheet 67.1% 32.9% 100.0% 65.0% 35.0% 100.0%

FFO Interest Coverage 4.74 4.86 Moody's S&P FFO Total Debt 17.1% 14.7% Baa1/S A-/S ^^ - calculated on rolling 12-month avg. ^includes securitization debt of $1,245M and $1,059M at December 31, 2016 and Sept. 30, 2017 respectively Summary of Degree Days Summary of KWh Energy Sales** (in millions of KWhs) 2016 2015 2014 (in degree days) 35,000 31,225 30,285 Actual 202 390 428 30,184 Heating 30,000 328 325 337

Normal 7,900 25,000 7,699 7,290 Actual 3,058 2,718 2,553 Cooling

hours Normal 2,648 2,642 2,618

- 20,000 11,068 10,736 10,915 15,000 10,000

Kilowatt 2017 Asset Data* (in thousands) 5,000 11,682 11,273 11,395 - As of 9/30/17 2016 2015 2014 Total Assets $ 8,679,900 Net Plant Assets $ 6,339,700 Residential Commercial Industrial Other Cash $ 100 *Source: 3Q17 Financial Statements (unaudited) **Source: 2016 Annual Report ***KWh Sales – Weather Normalized

52nd EEI Financial Conference | aep.com 81 COMMISSION OVERVIEW Public Utility Commission of Texas Commissioners

Number: 3 Appointed/Elected: Appointed Term: 6 Years Political Makeup: R: 3 D: 0 Qualifications for Commissioners To be eligible for appointment, a commissioner must be: a qualified voter and a citizen of the U.S.; a competent and experienced administrator; well informed and qualified in the field of public utilities and public utility regulation; and, have at least five years of experience in the administration of business or government or as a practicing attorney or certified public accountant. Chairman appointed by the Governor. Commissioners DeAnn Walker, Chairman, (Rep.), since 2017, current term expires September 2021. Previously served as senior policy advisor to current Governor Abbott related to policy matters on regulated industries. Also served as director of regulatory affairs and as an associate general counsel for CenterPoint Energy. Received a law degree from the South Texas College of Law. Kenneth W. Anderson Jr., Commissioner, (Rep.), since September 2008. Past Director of Governmental Appointments under former Governor Perry. Prior to that Anderson served in private practice as a corporate attorney in the area of securities law and regulatory matters. He also served as a member of the Texas Securities Board from 1999-2006. Anderson holds a law degree from Southern Methodist University. Brandy Marty Marquez , Commissioner, (Rep.), since 2013; current term expires September 2019. Formerly Governor Perry’s chief of staff. Has also held positions as: governor’s Deputy Chief of Staff, Director of the Budget, Planning and Policy Division and deputy legislative director/liaison to the Texas House of Representatives. Bachelor’s degree in government from University of Texas and Juris Doctorate from St Mary’s University.

AEP Regulatory Status

AEP Texas provides retail transmission and distribution service on a cost-of-service basis at rates approved by the PUCT and wholesale transmission service under tariffs approved by the FERC consistent with PUCT rules. Distribution rate riders are in place to recover AMI, wholesale transmission expenses and energy efficiency costs. Interim Transmission Cost of Service (TCOS) filings can be filed twice a year to recover transmission investment and Distribution Cost Recovery Factor (DCRF) filings can be filed once a year to recover distribution investment.

52nd EEI Financial Conference | aep.com 82 REGULATED GENERATION

• Regulated Generation Summary • Owned Regulated Generation • Regulated Fuel Procurement – 2018 Projected • Regulated Coal Delivery – 2018 Projected • Jurisdictional Fuel Clause Summary

52nd EEI Financial Conference | aep.com 83 REGULATED GENERATION SUMMARY

Net Maximum Capacity (in MW)

Owned Renewable Gas OVEC Total Company Capacity PPA PPA PPA*** Capacity

AEP Generating Company* 1,310 1,310 Appalachian Power Company 6,632 455 344 7,431 Wheeling Power Company 780 780 Kentucky Power Company 1,060 1,060 Indiana Michigan Power Company 3,626 450 172 4,248 Ohio Power Company 209 437 646 Public Service Company of Oklahoma 3,940 1,137 1,023 6,100 Southwestern Electric Power Company 5,225 469 126 5,820 AEP Texas** 355 355 Total Capacity 22,928 2,720 1,149 953 27,750 Energy Efficiency/Demand Response 2,021 Total Capacity & EE/DR 29,771

* AEP Generating Company has PPA with I&M (70%) and KPCo (30%) for its owned Rockport capacity.

** AEP Texas North has a PPA for its share of Oklaunion (with Competitive operations).

*** Represents AEP's 43.7% interest in Ohio Valley Electric Corporation (OVEC)

See Renewable Resources pages in “Transforming our Generation Fleet” for additional information on Renewable PPAs.

52nd EEI Financial Conference | aep.com 84 OWNED REGULATED GENERATION

Owned Year Plant Owned Owned Owned Owned Owned Plant Name Units State Fuel Type Net Maximum Commissioned Coal / Lignite Gas Nuclear Hydro Solar Capacity (MW)

AEP Generating Company Rockport * 2 IN 1984 Steam - Coal 1,310 1,310

Appalachian Power Company Buck 3 VA 1912 Hydro 9 9 Byllesby 4 VA 1912 Hydro 22 22 Claytor 4 VA 1939 Hydro 76 76 Leesville 2 VA 1964 Hydro 50 50 London 3 WV 1935 Hydro 14 14 Marmet 3 WV 1935 Hydro 14 14 Niagara 2 VA 1906 Hydro 2 2 Winfield 3 WV 1938 Hydro 15 15 Smith Mountain 5 VA 1965 Pumped Storage 586 586 Ceredo 6 WV 2001 Natural Gas 516 516 Clinch River 2 VA 1958/2016 Natural Gas 465 465 Dresden 1 OH 2012 Natural Gas 613 613 Amos 3 WV 1971 Steam - Coal 2,930 2,930 Mountaineer 1 WV 1980 Steam - Coal 1,320 1,320 4,250 1,594 788 6,632 Wheeling Power Company Mitchell 2 WV 1971 Steam - Coal 780 780

Kentucky Power Company Big Sandy 1 KY 1963/2016 Natural Gas 280 280 Mitchell 2 WV 1971 Steam - Coal 780 780 780 280 1,060

* PPA with I&M (70%) and KPCo (30%) for capacity and energy entitlements

52nd EEI Financial Conference | aep.com 85 OWNED REGULATED GENERATION

Owned Year Plant Owned Owned Owned Owned Owned Plant Name Units State Fuel Type Net Maximum Commissioned Coal / Lignite Gas Nuclear Hydro Solar Capacity (MW)

Indiana Michigan Power Company

Berrien Springs 12 MI 1908 Hydro 7 7 Buchanan 10 MI 1919 Hydro 4 4 Constantine 4 MI 1921 Hydro 1 1 Elkhart 3 IN 1913 Hydro 3 3 Mottville 4 MI 1923 Hydro 2 2 Twin Branch 6 IN 1904 Hydro 5 5 Deer Creek 1 IN 2016 Solar 3 3 Olive 1 IN 2016 Solar 5 5 Twin Branch 1 IN 2016 Solar 3 3 Watervliet 1 MI 2016 Solar 5 5 Rockport 2 IN 1984 Steam - Coal 1,310 1,310 Cook 2 MI 1975 Steam - Nuclear 2,278 2,278 1,310 2,278 22 16 3,626

Public Service Company of Oklahoma

Comanche 1 OK 1973 Steam - Natural Gas 248 248 Northeastern (1&2) 2 OK 1961 Steam - Natural Gas 912 912 Riverside (1&2) 2 OK 1974 Steam - Natural Gas 907 907 Riverside (3&4) 2 OK 2008 Steam - Natural Gas 160 160 Southwestern (1-3) 3 OK 1952 Steam - Natural Gas 465 465 Southwestern (4&5) 2 OK 2008 Steam - Natural Gas 170 170 Tulsa 2 OK 1923 Steam - Natural Gas 319 319 Weleetka 3 OK 1975 Steam - Natural Gas 185 185 Northeastern (3) 1 OK 1979 Steam - Coal 469 469 Oklaunion 1 TX 1986 Steam - Coal 105 105 574 3,366 3,940

52nd EEI Financial Conference | aep.com 86 OWNED REGULATED GENERATION

Owned Owned Year Plant Owned Owned Owned Owned Plant Name Units State Fuel Type Coal / Net Maximum Commissioned Gas Nuclear Hydro Solar Lignite Capacity (MW)

Southwestern Electric Power Company

Stall 1 LA 2010 Natural Gas 534 534 Mattison 4 AR 2007 Natural Gas 291 291 Arsenal Hill 1 LA 1960 Steam - Natural Gas 110 110 Lieberman 3 LA 1947 Steam - Natural Gas 242 242 Knox Lee 4 TX 1950 Steam - Natural Gas 475 475 Wilkes 3 TX 1964 Steam - Natural Gas 893 893 Lone Star 1 TX 1954 Steam - Natural Gas 50 50 Welsh 2 TX 1977 Steam - Coal 1,053 1,053 Flint Creek 1 AR 1978 Steam - Coal 264 264 Turk 1 AR 2012 Steam - Coal 477 477 Pirkey 1 TX 1985 Steam - Lignite 580 580 Dolet Hills 1 LA 1986 Steam - Lignite 256 256 2,630 2,595 5,225

AEP Texas

Oklaunion* 1 TX 1986 Steam - Coal 355 355

Total Owned Regulated Net Maximum Capacity 11,989 7,835 2,278 810 16 22,928

* AEP Texas North sells its share of Oklaunion energy to AEP Energy Partners through a PPA

52nd EEI Financial Conference | aep.com 87 REGULATED FUEL PROCUREMENT – 2018 PROJECTED

Total Coal - Regulated Coal – East Regulated

Coal – West Regulated Fuel Stats: - Expected 2018 Consumption: Coal: approx. 34M tons Natural Gas: approx. 90 BCF - Coal 68% contracted for 2018 and 41% contracted for 2019 - Avg. 2017 YTD Regulated Delivered Price: Coal: System - ~$44/ton East - ~$49/ton West - ~$37/ton Natural Gas: ~$3/MMBtu - Projected 2018 Regulated Coal Delivered Price: System - ~$42/ton East - ~$46/ton West - ~$36/ton

52nd EEI Financial Conference | aep.com 88 REGULATED COAL DELIVERY – 2018 PROJECTED

Total AEP Regulated System

AEP East AEP West Belt 7%

Rail/Barge * 33% Barge 57%

Rail * Reflects coal delivered to AEP plants transported 3% through a combination of rail and barge

52nd EEI Financial Conference | aep.com 89 JURISDICTIONAL FUEL CLAUSE SUMMARY

Adjustment Jurisdiction Active Fuel Clause Frequency Arkansas Yes Annually Indiana Yes Biannually Kentucky Yes Monthly Louisiana Yes Monthly Michigan Yes Annually Oklahoma Yes Annually Tennessee Yes Annually Texas (SPP) Yes Triennially* Virginia Yes Annually West Virginia Yes Annually

* Fuel clause may be adjusted more frequently if a prescribed variance occurs

52nd EEI Financial Conference | aep.com 90 TRANSMISSION INITIATIVES

• AEP Transmission Holdco Legal Entity Structure • AEP Transco Business Overview • AEP Transco Project Mix & Footprint • Transmission Investment Needs • Transco State & FERC Regulatory Compacts • FERC Formula Rate & Filings • Active Joint Venture Projects • Competitive Transmission – Transource • Grid Assurance Executive Summary & Timeline • BOLD® Strategy • Evolution of Transmission Trackers • Favorable Recovery of Transmission Investment

52nd EEI Financial Conference | aep.com 91 AEP TRANSMISSION HOLDCO LEGAL ENTITY STRUCTURE

AEP Transmission Company, LLC (“AEP Transco”) is wholly-owned by AEP Transmission Holding Company, LLC (“AEP Trans Holdco”) AEP Trans Holdco is a wholly-owned subsidiary of American Electric Power Company, Inc. (“AEP”), one of the largest utility holding companies in the U.S.

American Electric Power Company, Inc. (AEP)

AEP Transmission Holding Co. LLC. (“AEP Trans Holdco”)

Electric Electric Pioneer Transource AEP Transmission Company, Transmission Transmission Grid Assurance Transmission, Energy, LLC LLC. (“AEP Transco”) LLC America, LLC Texas, LLC

Prairie Wind $143M Net Plant Transource $2,896M Net Plant AEP Indiana Michigan AEP Appalachian Transmission, Missouri, LLC $1,560M Net Plant Transmission Co., Inc. Transmission Company, Inc. LLC $9M Net Plant $148M Net Plant Transource AEP Kentucky AEP Southwestern West Virginia, Transmission Co., Inc. Transmission Company, Inc. LLC $87M Net Plant

Transource AEP Ohio Transmission Maryland, LLC Co., Inc. $2,549M Net Plant

Fully operational Transource AEP Oklahoma Pennsylvania, Regulatory Approval Required LLC $872M Net Plant Transmission Co., Inc. Joint Venture $322M Net Plant

AEP West Virginia $839M Net Plant Transmission Co., Inc. Net Plant totals are as of September 30, 2017, except Pioneer and Prairie Wind, which are as of August 31, 2017.

52nd EEI Financial Conference | aep.com 92 AEP TRANSCO BUSINESS OVERVIEW

• An unbundled transmission business focused on ensuring grid reliability at the regional and local level; formed in 2009 with seven wholly-owned FERC regulated utilities (“State Transcos”) • Active State Transcos located in Indiana and Michigan, Kentucky, Ohio, Oklahoma, Tennessee and West Virginia • AEP Appalachian Transco is authorized to submit projects for commission approval in Virginia • Regulatory approvals in Arkansas & Louisiana (AEP Southwestern Transco) required before operation

• Significant investment opportunities in AEP’s transmission system provides growth opportunities for AEP Transco and provides flexibility to AEP’s integrated utility operating companies to direct capital to their distribution and generation businesses • Improving grid reliability & resiliency • Grid security and technology • Customer growth • Investments to support generation • Upgrading aging system infrastructure

• Favorable regulatory framework including forward-looking formula rates • Allowed returns on equity (“ROEs”) of 11.49% and 11.2% in PJM and SPP, respectively, subject to change pending 206 settlements • Limited revenue risk and have strong counterparties through their participation in the PJM Interconnection (“PJM”) and Southwest Power Pool (“SPP”) RTOs

• Headquartered in Columbus, OH, AEP Transco is supported by the entire AEP Transmission organization. This organization plans, builds and manages all of AEP’s transmission assets.

52nd EEI Financial Conference | aep.com 93 AEP TRANSCO PROJECT MIX

Transmission has asset replacement, local reliability and customer projects combined with RTO mandated projects

AEP Transco Projected Capital Expenditures by Project Category 1,800 $1,578 1,600 47 $1,463 $1,433 $1,446 30 1,400 48 91 $1,222 1,200 729 337 701 1,000 787 874 800 248

600 95 372 446 400 69 417 352 537 45 200 361 16 242 18 164 110 - 2016 2017 (E) 2018 (E) 2019 (E) 2020 (E) RTO Mandated Customer Local Reliability Asset Replacement Telecom

52nd EEI Financial Conference | aep.com 94 AEP TRANSCO FOOTPRINT

The Transcos exist within the expansive service territories of AEP, operating across two RTOs and 10 states.

AEP State Trascos AEP Appalachian Transmission Co., Inc. AEP Indiana Michigan Transmission Co., Inc. AEP Kentucky Transmission Co., Inc. AEP Ohio Transmission Co., Inc. AEP Oklahoma Transmission Co., Inc. AEP Southwestern Transmission Co., Inc. AEP West Virginia Transmission Co., Inc.

Net Transmission Plant 2017-2020 Capital Plan State Transco ($ in Millions)* ($ in Millions) IM Transco $1,560 $1,769 OH Transco $2,549 $2,227 OK Transco $872 $603 WV Transco $839 $1,089 KY Transco $87 $119 AP Transco $9 $112 Total $5,916 $5,919 * As of September 30, 2017

Transco investment opportunity is directly proportional to AEP's footprint. As the largest owner, operator and developer of transmission infrastructure in North America, AEP Transco is well positioned for consistent and stable growth.

52nd EEI Financial Conference | aep.com 95 TRANSMISSION INVESTMENT NEEDS

* Note table and graphs refer to Transmission equipment only. Distribution equipment is not included.

52nd EEI Financial Conference | aep.com 96 TRANSCO REGULATORY COMPACTS

AEP Transco and its seven Transco subsidiaries were formed in 2009 to focus on upgrades to AEP’s transmission system and provide financial flexibility to AEP’s electric utility Operating Companies. A summary of regulatory approval status is provided in the table below:

State State Operational and Approval Status Transco OH Transco No state regulatory agency approval was required to construct and operate transmission assets in the state of Ohio. OH Transco is fully operational with assets in-service.

IM Transco Indiana Utility Regulatory Commission approval for utility status received November 2011; no Michigan approval required. IM Transco is fully operational with assets in-service. OK Transco No state regulatory approval required for utility status. OK Transco is fully operational with assets in-service. WV Transco In a December 2012 order, the West Virginia Public Service Commission (“WVPSC”) required WV Transco to obtain a Certificate of Public Convenience and Necessity (“CPCN”) before beginning construction on each proposed project, until WV Transco established a track record, revenue stream and utility plant base. In September 2015, the WVPSC recognized that WV Transco had established the required track record and granted WV Transco’s petition to exempt projects from the CPCN requirement, when such projects met the “ordinary extension of existing systems” condition, as established for public utilities in the West Virginia Code. WV Transco is fully operational with assets in service.

AP Transco In February 2012, the Virginia State Corporation Commission (“VSCC”) approved a service agreement between AP Transco and APCo limited to studying and evaluating potential transmission projects and for preparation of applications for future submission of project certificate applications to the VSCC. In May 2013, AP Transco and APCo filed a joint application with the Virginia SCC for the approval of the Cloverdale Extra High Voltage Transmission Improvements Project. The VSCC approved the project for APCo to construct. AP Transco can seek certification of future projects in its own name but the Virginia SCC will determine whether the project will ultimately be owned by AP Transco or APCo. AP Transco has not yet filed other project applications. As a result of separate orders issued by the Virginia SCC and the WVPSC in December 2016, AP Transco was granted consent to enter into a joint license agreement that will support investment in Tennessee. AP Transco currently has assets under construction in Tennessee. KY Transco In February 2011, KY Transco filed an application with the Kentucky Public Service Commission (“KPSC”) in Case No. 2011-00042 seeking a CPCN to operate as a transmission-only public utility in Kentucky. In June 2013, the KPSC denied the application, stating that KY Transco could not be defined as a public utility under Kentucky statute and therefore was not subject to KPSC regulatory jurisdiction. KY Transco is fully operational with assets in service.

SW Transco Applied for public utility status in Arkansas and Louisiana in May 2011 and August 2011, respectively, with supplemental filings made in both jurisdictions. The application for regulatory approval to operate in Louisiana is under consideration, while the application for regulatory approval to operate in Arkansas was denied in January 2015.

52nd EEI Financial Conference | aep.com 97 STATE TRANSCOS ARE REGULATED BY FERC Conservative FERC regulation results in timely recovery of costs • In April 2011, the FERC approved a formula rate mechanism for the State Transcos • The FERC order dictates how the State Transcos determine their rates, including the recovery of all authorized expenses and the return on and of invested plant • The approved formula rate mechanism established an annual revenue requirement for transmission services under the PJM and SPP OATTs, as applicable, and implemented a transmission cost of service formula rate • Annual rate updates provide a highly predictable and stable source of revenues and income • For PJM, each State Transco’s annual transmission revenue requirement (“ATRR”) is reset in January, establishing rates for the one-year forward period of January to December. The rate base component of the formula rate calculation includes a beginning and ending average transmission plant in service balance • For SPP, each State Transco’s annual transmission revenue requirement (“ATRR”) is reset in July, establishing rates for the one-year forward period of July to June. The rate base component of the formula rate calculation includes the prior year’s transmission plant in service ending balance, plus the current year’s projected plant in service additions.* • The revenue requirements are derived from the following capital structure and authorized ROEs:

Capital Structure % ATRR** Rate Base Company RTO Authorized ROE* Equity Cap

AP Transco PJM 50% 11.49% $98 KH $73 KH IM Transco PJM 50% 11.49% $150 MH $953 MH KY Transco PJM 50% 11.49% $10 MH $60 MH OH Transco PJM 50% 11.49% $342 MH $1,575 MH WV Transco PJM 50% 11.49% $81 MH $508 MH OK Transco SPP 50% 11.20% $96 MH $681 MH SW Transco SPP 50% 11.20% $125 KH $4 KH

* Subject to change pending 206 application outcome ** PJM effective as of January 2017 and SPP effective as of July 2017

52nd EEI Financial Conference | aep.com 98 9 9 FERC FORMULA RATE The Transcos benefit from a transparent, partially forward-looking formula rate mechanism, authorized by the FERC, which minimizes regulatory lag:

PJM* SPP**

+ Projected + Prior year-end Operating Expenses Operations and maintenance expense + Projected + Prior year-end Depreciation & amortization expense + Projected + Prior year-end Tax expense +

+ Beginning & Ending Average + Prior year-end Plant in-service Rate Base - Beginning & Ending Average - Current year projected Accumulated depreciation & amortization - Beginning & Ending Average - Accumulated Deferred income taxes + Beginning & Ending Average + Average Working capital x

. Beginning & Ending Average . Prior year-end actuals Capital structure WACC . 11.49% . 11.20% ROE for Transcos

+ Prior Year (Over)/Under + Annual true-up revenue amount to (return)/collect any (over)/under recovery of revenues Recovery = = Annual Transmission = Annual Transmission Revenue Revenue Revenue Requirement Requirement (ATRR) for Requirement (ATRR) for collection collection during Rate Year during Rate Year (July of current year to June of * Previously adopted forward-looking mechanism following year) ** Subject to change pending 205 application outcome

52nd EEI Financial Conference | aep.com 99 FERC 205 & 206 FILINGS

East • 206 complaint against AEP East companies filed in October 2016 • AEP filed a 205 application in November 2016 for a modified formula rate that seeks to mitigate regulatory lag • FERC accepted the proposed modifications effective January 1, 2017, subject to refund

West • 206 complaint against AEP West companies in SPP filed in June 2017 • AEP filed a 205 application in October 2017 for a modified formula rate that seeks to mitigate regulatory lag

Transmission investment strategy unchanged

52nd EEI Financial Conference | aep.com 100 ACTIVE JOINT VENTURE PROJECTS

Approved Return on Equity Projected Total Estimated Complete Project costs at Project Project Name Location Date Owners (ownership %) completion Base RTO Risk Total

BHE Texas Transco, LLC (50%), AEP ETT Texas (ERCOT) Ongoing (50%) $3.1 billion 9.60% 0.00% 0.00% 9.60% Prairie Wind Kansas 2014 Westar Energy(50%), ETA (50%) $158.1 million 10.80% 0.50% 1.50% 12.80% Pioneer Indiana 2018 Duke Energy (50%), AEP (50%) $386 million 10.54% 0.50% 1.50% 12.54% AEP (86.5%), Great Plains Energy Transource-Iatan-Nashua Missouri 2015 (13.5%) $64 million 9.80% 0.50% 0.00% 10.30% AEP (86.5%), Great Plains Energy Transource-Nebraska-Sibley Missouri 2016 (13.5%) $248 million 9.80% 0.50% 1.00% 11.30% AEP (86.5%), Great Plains Energy Transource-WV West Virginia 2019 (13.5%) $67 million 10.00% 0.50% 0.00% 10.50% Pennsylvania & AEP (86.5%), Great Plains Energy Transource-PA& MD* Maryland 2020 (13.5%) $225 million 9.90% 0.50% 0.00% 10.40%

* Transource Pennsylvania and Maryland: Pending settlement of a 9.9% base ROE will result in an authorized ROE of 10.4%.

Non-active joint ventures and prospects excluded from the financial forecasts.

52nd EEI Financial Conference | aep.com 101 COMPETITIVE TRANSMISSION -

Transource Missouri

Net CWIP/PPE Balance $312 million • The Iatan – Nashua 345 kV transmission line was placed in-service on April 8, 2015 YTD After-tax Net Income $9.3 million

45% debt Actual Capital Structure 55% equity • The Sibley – Nebraska City 345 kV line project was placed in-service on December 15, 2016

Authorized ROE1 11.15%

Transource West Virginia

Total Estimated Project Size ~$67 million • In 2015, Transource was designated the Clendenin-Fort Walton Area Improvements

YTD After-tax Net Income $0.3 million • The project is a ~25-mile 138kV line from AEP’s Thorofare Creek Station to FirstEnergy’s Powell-Mountain-Goff Run 138 kV line with expected in-service date of June 1, 2019 40% debt Hypothetical Capital Structure 60% equity • Material procurement expected to begin no later than Q4, 2017

Authorized ROE2 10.5%

• On August 2, 2016, PJM Board approved a Transource project that will improve congestion in Transource Pennsylvania & Maryland the AEP-Dominion interface • Independence Energy Connection’s PJM-approved project includes the construction of two Total Estimated Project Size3 ~$225 million greenfield 230 kV lines (each in Pennsylvania and Maryland) and two greenfield 500/230 kV 40% debt Hypothetical Capital Structure substations (both in Pennsylvania) 60% equity • Approved incentives: Recovery of cost upon abandonment, pre-commercial costs/regulatory Authorized ROE4 10.4% asset, 100% CWIP in rate base during construction • CPCN filings required to be submitted by June 1, 2018

1 Transource Missouri is authorized a 10.3% ROE for the Iatan-Nashua and a 11.3% ROE for Sibley-Nebraska City, resulting in a combined authorized ROE of 11.15%. 2 Transource West Virginia is authorized a base ROE of 10.0% with an approved 0.5% adder for RTO participation. 3 Figure in 2020 dollars. 4 Transource Pennsylvania and Maryland: Pending settlement of a 9.9% base will result in an authorized ROE of 10.4%.

52nd EEI Financial Conference | aep.com 102 COMPETITIVE TRANSMISSION - FERC Formula Rate Mechanism Example

Transource benefits from a transparent, FERC-authorized, fully forward-looking formula rate mechanism, with a true-up. This allows for Transource to minimize regulatory lag and ensure full and timely recovery of costs.

Operating Expenses

Rate Base

WACC

+ Prior Year (Over)/Under Recovery = Revenue Requirement

103 52nd EEI Financial Conference | aep.com 103 GRID ASSURANCE EXECUTIVE SUMMARY

• Unregulated company that provides three cost-based services Company • Optimize and purchase shared inventory of strategic spare transformers and circuit breakers Overview • Store and maintain equipment in a secure warehouse with transferrable warranty • Provide logistics to facilitate equipment delivery from warehouse to impacted location

• Company launched May 6, 2016 Status • LLC execution and commencement of active marketing • Staffed key positions – CEO, COO, Regulatory, Finance • Developed technical specifications & operational plans – Transformer RFQ October 2017 • Acceptance/Transition Date (Subscriber and equity owner commitment) – expected December 2017 • Developing nominated quantities – 10-12 companies including founding members • Initial commitments to nominated quantities and cost – December 2017 • Critical mass – Firm interest among core customers, critical mass expected by year end 2017 • Initial Fee Commencement Date (Inventory in warehouse) – expected April 2019

Recent severe weather phenomenon bolster support for grid security and resiliency

52nd EEI Financial Conference | aep.com 104 GRID ASSURANCE TIMELINE

The Grid Assurance operational timeline obtains the appropriate approvals and commitments prior to spending capital for inventory and equipment

2016 2017 2018 20192019+

Administrative, Technical and Marketing Activities

Critical Mass Subscriptions Additional Subscriptions

Subscriber & Equity Investor Commitments with State Equity Contributions Commission Approval

Technical specification, Building & Equipment warehouse and operational plan development Acquisition Ongoing Operations

Company Launch Acceptance/Transition Initial Fee 5/2016 Date (Subscriber Commencement Commitment) Date (Go-Live Date) 12/2017 4/2019

52nd EEI Financial Conference | aep.com 105 BOLD® STRATEGY

BOLD – “Breakthrough Overhead Line Design” – is a patented compact transmission line design developed by AEP that delivers more capacity and more efficiency in a smaller and more aesthetically pleasing low-profile structure

• Awards – Technical and Aesthetic: • 2017 EEI Edison Award Winner – “The BOLD technology is a transformational line design for the electric power industry, increasing efficiency and reliability.” • 2017 CIGRE/KEPCO International Tower Design Award Grand Prize Winner – BOLD was recognized as the top design of 26 competitors for its practical and environmentally friendly design, blending both performance with aesthetics. • Recent Energized AEP Projects: • Robison Park – Sorenson (Fort Wayne, IN); 22 miles, double-circuit 345kV (3-conductor) and 138kV (2-conductor), tubular structures; energized November 2016 • Meadow Lake – Reynolds (Lafayette, IN); 9 miles, double-circuit 345kV (3-conductor), lattice structures; energized July 2017 • International Patents granted by European Patent Office and registered in 17 European countries • Strategic Objectives – Build business through IP licensing fees to utilities within the U.S. and beyond (as opportunities present themselves). • In 2017, BOLD was awarded a continuation patent to expand elements of the original filing, thereby increasing coverage and expanding market opportunities • License Structure – Two license model: • Standards License – marketed to both small group of select top-tier engineering firms • Use License – marketed to transmission line owners deploying BOLD on a $/line mile basis for use on greenfield and rebuild projects

52nd EEI Financial Conference | aep.com 106 EVOLUTION OF TRANSMISSION TRACKERS IN THE OPERATING COMPANIES PJM Trackers

11% 17% 25% Base Rates

75% Trackers 83% 89%

2005 2010 2017 SPP Trackers

26% 32% Base Rates 38%

62% Trackers 74% 68%

2005 2010 2017

ERCOT Trackers

Base Rates 100% 100% 100% Trackers

2005 2010 2017

52nd EEI Financial Conference | aep.com 107 FAVORABLE RECOVERY OF TRANSMISSION INVESTMENT Jurisdictional Capital Investment Recovery Mechanism

• Projected $991 Million of 2017 PJM and SPP Expenses will be • Projected $9.5 Billion of 2017 Net Plant in Service is recovered through Trackers recoverable through Trackers and from Wholesale Customers • Projected $325 Million of 2017 PJM and SPP Expenses must • Projected $1.2 Billion of 2017 Net Plant in Service is be recovered through either existing or future Base Rates recoverable through Base Rates

2017 Recoverable Plant in Service ($M)

2017 Capital – Projected Recovery by RTO Projected 2017 OATT Expense ($M)

Jurisdictional Trackers provide most efficient recovery of Transmission Investment

Note: Investment based on 2017 formula rate filings

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CONTRACTED RENEWABLES & OTHER

• Organizational Structure • Contracted Renewables • Competitive Generation – Owned & PPA • Competitive 2016 Fleet Statistics • Retail - AEP Energy

52nd EEI Financial Conference | aep.com 109 COMPETITIVE OPERATIONS ORGANIZATIONAL STRUCTURE

AEP

AEP Energy Supply

AEP Generation AEP Energy AEP OnSite AEP Energy AEP Renewables Resources Partners Partners

Generation Wholesale Trading Retail Customer Universal Scale & Marketing Solutions Renewable Assets Business with Long-Term Oklaunion PPA Focused on PPAs Assets Backed Wind Operations with Long-Term PPAs

52nd EEI Financial Conference | aep.com 110 CONTRACTED RENEWABLES $1B CAPITAL ALLOCATED 2017-2019

Renewable Generation Asset Owner

“Behind-the-Meter” Energy Assets

Universal Scale Energy Assets

Utilities, Municipalities, Schools, Cities, Hospitals and Key Customers Corporations and Cooperative Commercial / Industrial Accounts Accounts

Distributed Generation, Renewables, Storage, Key Technologies Wind and Solar Substations and Combined Heat and Power

52nd EEI Financial Conference | aep.com 111 CONTRACTED RENEWABLES

Letchworth School District, New York | 1.6 MW

• Committed to nearly $200 million in energy assets

• 21 operating projects in 9 different states (OH, HI, NY, NH, VT, MN, CA, NJ and FL)

• Operating projects include customer sited solar projects, behind the meter energy storage assets and a customer sited substation

• 15 more customer sited solar projects are under construction in 8 different states (CA, CO, MN, NJ, NM, NY, OH and TX)

52nd EEI Financial Conference | aep.com 112 CONTRACTED RENEWABLES

Pavant Solar III (UT)

• 20 MW solar project near Delta, Utah Jacumba Solar (CA) • Output fully contracted with PacifiCorp under 20 year PPA • COD on December 30, 2016 • Constructed by JSI Construction

Boulder Solar II (NV)

• 50 MW solar project near • 20 MW solar project near Jacumba, California Boulder City, Nevada • Output fully contracted with Southern California • Output fully contracted with Edison under a 20 year PPA NV Energy under 20 year PPA • COD on July 25, 2017 • COD on January 27, 2017 • Constructed by BayWa and Swinerton Builders • Constructed by SunPower

52nd EEI Financial Conference | aep.com 113 COMPETITIVE GENERATION – OWNED & PPA

Owned Owned Owned Owned Owned Plant Name State Fuel Type Net Maximum Coal Hydro Wind Solar Capacity (MW) Cardinal 1 OH Steam - Coal 595 595 Conesville 4* OH Steam - Coal 651 651 Conesville 5 & 6 OH Steam - Coal 810 810 Stuart 1-4** OH Steam - Coal 603 603 Racine OH Hydro 48 48 Trent Mesa Wind TX Wind 150 150 Desert Sky Wind TX Wind 161 161 AEP Renewables Solar 90 90 AEP Onsite Partners Solar 26 26 Total Owned 2,659 48 311 116 3,134

PPA PPA Total PPA PPA Resource State Fuel Type Coal Wind Capacity (MW) Oklaunion*** TX Steam - Coal 355 355 Southwest Mesa TX Wind 177 177 Total PPA 355 177 532

Total Coal Hydro Wind Solar Capacity (MW) Total Owned & PPA 3,014 48 488 116 3,666

* Represents AEP’s capacity portion of jointly owned unit, operated by AEP. ** Represents AEP’s capacity portion of jointly owned unit, operated by non-affiliate; Unit 1 representing 150 MW was deactivated as of September 30, 2017. *** Represents capacity owned by AEP Texas North, operated by PSO. Competitive has PPA with AEP Texas North.

52nd EEI Financial Conference | aep.com 114 COMPETITIVE 2016 FLEET STATISTICS

2016 2016 FGD 2016 FOB 2016 MWh Capacity Plant / Unit Fuel Type Delivery Reagent Plant $/Ton $/MMBtu Produced Factor Cardinal 1 NAPP Barge & Truck Limestone 50.29 2.01 3,545,219 67.83% Conesville 4* NAPP Rail & Truck Limestone 66.21 2.82 1,115,562 37.43% Conesville 5 & 6 NAPP Rail & Truck Lime/Limestone 55.03 2.35 1,952,025 27.44% Zimmer* NAPP 30%, ILB 70% Barge Limestone 53.15 2.20 1,327,340 45.79% Stuart 1-4** NAPP 30%, ILB 70% Barge Limestone 45.67 1.93 2,800,168 53.13% Oklaunion Powder River Basin Rail Limestone 34.92 2.15 1,381,779 44.31%

Racine Hydro n/a n/a 179,844 42.65% 12,301,937

* Exchanged Zimmer Plant with Dynegy for an additional 312 MW of Conesville 4 in the second quarter of 2017.

** Plant scheduled to retire in the second quarter of 2018.

52nd EEI Financial Conference | aep.com 115 RETAIL – AEP ENERGY

Customer Accounts* Geography of customers*

C&I New Jersey Maryland 0.8% Delaware 0.1% 11% 0.9% Washington DC 0.1% Pennsylvania 11.1%

Illinois 14.7%

Residential 89%

Delivered Load*

Residential Ohio 72.3% 23%

• Approximately 402,000 retail customer accounts (including approximately 68,000 retail gas accounts)*

• YTD served 11.6 TWh of load* C&I 77% • Seven states, focus on Ohio

* As of September 30, 2017

52nd EEI Financial Conference | aep.com 116