Settlement Reached In Lawsuits Challenging John W. Turk, Jr. Power Plant

SHREVEPORT, La., July 25, 2011 /PRNewswire/ -- Southwestern Electric Power Co. (SWEPCO), a unit of American Electric Power (NYSE: AEP), has signed a confidential settlement of lawsuits and other actions that challenged the construction of its John W. Turk, Jr. Power Plant in Hempstead County, Ark. Under terms of the settlement, the litigants are withdrawing all of their challenges to the plant, including the air permit and the U.S. Army Corps of Engineers permit for the plant, and SWEPCO is making commitments regarding its future operations and environmental activities in the area.

Plaintiffs participating in the settlement are the Hempstead County Hunting Club Inc., Dr. Mary O'Boyle, Pat Schultz, the Pat Schultz Family Trust, YCR Limited Partnership, Yancey Reynolds and Charles Mills.

A stipulation of dismissal will be filed with the U.S. District Court for the Western District of Arkansas in Texarkana. The settlement resolves all issues raised by these plaintiffs in their challenges to the U.S. Army Corps of Engineers Section 404 permit for the 600-megawatt Turk project, which is located about 15 miles northeast of Texarkana.  Additional filings will be made to withdraw the air permit appeal and terminate other cases.

Two litigants – the Sierra Club and the National Audubon Society/Audubon Arkansas – are continuing to challenge the air permit before the Arkansas Court of Appeals and the Corps permit in a companion case still pending before the U.S. District Court in Texarkana. SWEPCO will continue to aggressively defend the permits issued for the plant.

"We are pleased to have reached an agreement with the plant's neighbors regarding these long-standing issues," said Michael G. Morris, AEP chairman and chief executive officer. "Construction of the Turk Plant is 70 percent complete. As we move forward with this important project, we will continue to demonstrate our commitment to providing affordable, reliable power for our customers while being good stewards of the environment."

Venita McCellon-Allen, president and chief operating officer of SWEPCO, added "The folks at SWEPCO, the hunting club and the local landowners all want what's best for Hempstead County and the surrounding area – including jobs, economic growth, and protection and enhancement of the environment. With this settlement, we can turn from the time and expense of legal battles to continued work on the plant and actions that will help conserve and protect the area surrounding our plant, including the Little River Bottoms."

The Turk Plant is scheduled to begin operations in 2012. More than 1,800 people are currently working at the site. "The plant has already provided a major economic boost for Southwest Arkansas despite some difficult economic times for our country. So many people in Fulton, McNab, Hope, Texarkana and beyond have supported us in our determination to get this much-needed facility built. I want to thank them for their continuing support," McCellon-Allen said.

Gary Voigt, president of Arkansas Electric Cooperative Corp. (AECC), said, "This settlement helps put us a significant step closer to putting this plant in service for 490,000 co-op members in Arkansas." AECC owns 12 percent of the plant.

Highlights from the settlement include:

• Litigants will withdraw from all lawsuits and administrative actions that challenge construction of the plant.
• No additional generation units will be constructed at the Turk plant site.
• No new coal-fired power plants will be proposed by SWEPCO at any location in Arkansas that is within 30 miles of the Turk Plant site.
• No future transmission lines associated with the Turk Plant will cross sensitive environmental areas.
• SWEPCO will provide funding to support the Hempstead County Hunting Club's longstanding efforts to conserve, restore, preserve and enhance the Little River Bottoms, and the Grassy Lake area.
• SWEPCO will complete a base line mercury study for the Grassy Lake area near the Turk Plant.
• SWEPCO affirmed it will comply with the U.S. Environmental Protection Agency's recently announced Cross-State Air Pollution Rule.
• SWEPCO will complete the installation of clay and synthetic liners for the Turk Plant landfill, which recently received approval from the Arkansas Department of Environmental Quality.
• SWEPCO will monitor the development of carbon capture and storage technology and install it at the Turk Plant if the technology becomes economically feasible and the costs can be recovered through electric rates.

SWEPCO, which owns 73 percent of the Turk plant, serves 520,400 customers in three states: 113,700 in western Arkansas, 225,700 in northwest and central Louisiana and 180,000 in north and eastern Texas. The cities of Hope, Bentonville and Prescott, Ark., are among SWEPCO's wholesale customers.

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.

SOURCE Southwestern Electric Power Co.

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