Apr. 27 - The Columbus Dispatch, Ohio
American Electric Power's top executive said yesterday that the company is in discussions with the federal government to settle a lawsuit concerning alleged Clean Air Act violations at the company's power plants.
Morris said AEP has participated in the meetings at the request of U.S.
District Judge Edmund Sargus in Columbus, who is scheduled to preside over a
trial this summer.
Morris indicated AEP is prepared to go to trial.
"We would welcome a settlement if it's possible, but we're very
confident of our legal position," he said.
The Justice Department sued several utilities in 1999 after the Environmental
Protection Agency determined that they had made modifications to their power
plants that resulted in increased pollution.
The companies should have applied for permits and installed pollution
controls, the government argued. The utilities say the work was routine
maintenance.
The government has settled with nine companies, including Virginia Electric
Power Co. which paid $1.2 billion, the largest settlement.
During the annual meeting in Tulsa, Okla., Morris recounted progress AEP had
made in the past year.
"Last year, we completed our efforts to refocus the company on what we
do best -- generate, transmit and distribute electricity," he said.
Morris cited several areas where the company had delivered on promises to
shareholders, including:
--Profits: Excluding special items, AEP earned $2.33 per share in 2004,
beating its forecast of between $2.20 and $2.30.
--Shedding non-core assets: By the end of 2004, AEP had sold most of its
assets that weren't related to its utility business. They included plants in the
United Kingdom and natural-gas pipeline businesses in Louisiana and Texas.
--Environmental initiatives: The board produced a detailed report on the
potential financial impact to AEP of tougher clean-air standards and committed
to building a "clean-coal" generating plant by 2010.
--Resolving investigations into AEP's past energy-trading practices: The
company agreed in January to pay $81 million to end probes by the Department of
Justice, the U.S. Commodity Futures Trading Commission and the Federal Energy
Regulatory Commission.
Morris said that shareholders benefited from the moves, noting that the stock
price closed Monday at $35.13, up from about $30 a year ago.
He said a dividend increase is possible this year. It was cut to 35 cents per
share in 2003 but isn't likely to be returned to 60 cents, as in the past, he
said.
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