AEP, Duke Energy to Develop New Transmission Project With TVA in Indiana and Kentucky

INDIANAPOLIS, June 2, 2011 /PRNewswire/ — Pioneer Transmission LLC, a joint
venture between American Electric Power and Duke Energy (NYSE: DUK), will
develop a 55-mile, extra-high-voltage transmission project with Tennessee Valley
Authority in Indiana and Kentucky.

Under the terms of a memorandum of understanding with TVA, the parties propose
to build a 765-kilovolt (kV) transmission line connecting AEP’s Rockport Station
(east of Evansville, Ind.) with TVA’s Paradise Station in Drakesboro, Ky. The
cost of the project, which would also include construction of a new 765-kV
substation at Paradise, is estimated at $275 million, subject to approved
routing.

“This project, which is the result of thoughtful and creative collaboration
between the Pioneer partners and TVA, has the potential to enhance regional
reliability in the Indiana and Kentucky areas for decades to come,” said Duke
Energy Commercial Businesses Senior Vice President Phil Grigsby.

“By bringing additional extra-high-voltage transmission into service, the
Pioneer partners and TVA are taking steps to enhance transmission reliability in
this region, meeting needs for today and the future,” said Susan Tomasky,
president, AEP Transmission.

Pioneer and TVA will submit the Rockport-Paradise proposal to the PJM
Interconnection (PJM) for consideration in its regional planning process. In
addition, the project will require siting approval from the Kentucky Public
Service Commission.

Ownership shares of the final project will be determined by TVA and the PJM
approval process.

The Rockport-Paradise project complements the 240-mile Greentown-Rockport
transmission line that AEP and Duke proposed in August 2008, when the companies
formed Pioneer.

Through a final order issued on Jan. 21, 2009, the Federal Energy Regulatory
Commission granted the 765-kV Greentown-Rockport project a formula rate and
project incentives.

Pioneer is working with PJM and MISO to move the project through their
respective approval processes. Pioneer expects to file for utility status in
Indiana later this year.

AEP and Duke Energy continue to pursue commercial transmission projects both
jointly and independently, per the terms of their joint venture agreement.

Duke Energy’s interest in Pioneer is owned by the company’s Commercial
Businesses, which operate independently from its regulated Franchised Electric
and Gas unit.

More information about Pioneer Transmission LLC is available at
www.pnrtransmission.com.

About American Electric Power

American Electric Power is one of the largest electric utilities in the United
States, delivering electricity to more than 5 million customers in 11 states.
AEP ranks among the nation’s largest generators of electricity, owning nearly
38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s
largest electricity transmission system, a nearly 39,000-mile network that
includes more 765-kilovolt extra-high voltage transmission lines than all other
U.S. transmission systems combined.

AEP’s transmission system directly or indirectly serves about 10 percent of the
electricity demand in the Eastern Interconnection, the interconnected
transmission system that covers 38 eastern and central U.S. states and eastern
Canada, and approximately 11 percent of the electricity demand in ERCOT, the
transmission system that covers much of Texas.

AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in
Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana
Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and
Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas).
AEP’s headquarters are in Columbus, Ohio. Visit AEP on the web at www.aep.com.

About Duke Energy

Duke Energy is one of the largest electric power holding companies in the United
States. Its regulated utility operations serve approximately 4 million customers
located in five states in the Southeast and Midwest, representing a population
of approximately 12 million people. Its commercial power and international
business segments own and operate diverse power generation assets in North
America and Latin America, including a growing portfolio of renewable energy
assets and transmission projects in the United States. Headquartered in
Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York
Stock Exchange under the symbol DUK. More information about the company is
available on the Internet at: www.duke-energy.com.

MEDIA CONTACTS
AEP Melissa McHenry 614-716-1120
Duke Energy Greg Efthimiou 704-382-1925
24-Hour 800-559-3853
INVESTOR CONTACT Bill Currens, 704-382-1603

SOURCE Duke Energy