American Electric Power

TermOHTCoOklaunion Power StationOKTCoOPCoOPEBOperating PUCTRacineReference Rate ReformRegistrant SubsidiariesRegistrantsREPRestoration FundingRisk ManagementContractsRockport PlantROERPMRTOSabineSanta Rita EastMeaningAEP Ohio Transmission Company, Inc., a wholly-owned AEPTCo transmissionsubsidiary.A retired, single unit coal-fired generation plant totaling 650 MW located in Vernon,Texas. The plant was jointly-owned by AEP Texas, PSO and certainnonaffiliated entities.AEP Oklahoma Transmission Company, Inc., a wholly-owned AEPTCotransmission subsidiary.Ohio Power Company, an AEP electric utility subsidiary.Other Postretirement Benefits.Agreement, dated January 1, 1997, as amended, by and among PSO and SWEPCogoverning generating capacity allocation, energy pricing, and revenues and costsof third-party sales. AEPSC acts as the agent.Over-the-counter.Ohio Valley Electric Corporation, which is 43.47% owned by AEP.American Electric Power Company, Inc., the equity owner of AEP subsidiarieswithin the AEP consolidation.PATH West Virginia Transmission Company, LLC, a joint venture-owned 50% byFirstEnergy and 50% by AEP.Power Coordination Agreement among APCo, I&M, KPCo and WPCo.Pennsylvania – New Jersey – Maryland regional transmission organization.Particulate Matter.Purchase Power and Sale Agreement.Public Service Company of Oklahoma, an AEP electric utility subsidiary.Production Tax Credits.Public Utilities Commission of Ohio.Public Utility Commission of Texas.A generation plant consisting of two hydroelectric generating units totaling 48 MWslocated in Racine, Ohio and owned by AGR.The global transition away from referencing the London Interbank Offered Rate andother interbank offered rates, and toward new reference rates that are morereliable and robust.AEP subsidiaries which are SEC registrants: AEP Texas, AEPTCo, APCo, I&M,OPCo, PSO and SWEPCo.SEC registrants: AEP, AEP Texas, AEPTCo, APCo, I&M, OPCo, PSO andSWEPCo.Texas Retail Electric Provider.AEP Texas Restoration Funding LLC, a wholly-owned subsidiary of AEP Texasand a consolidated VIE formed for the purpose of issuing and servicingsecuritization bonds related to storm restoration in Texas primarily caused byHurricane Harvey.Trading and non-trading derivatives, including those derivatives designated as cashflow and fair value hedges.A generation plant, consisting of two 1,310 MW coal-fired generating units nearRockport, Indiana. AEGCo and I&M jointly-own Unit 1. In 1989, AEGCo andI&M entered into a sale-and-leaseback transaction with Wilmington TrustCompany, an unrelated, unconsolidated trustee for Rockport Plant, Unit 2.Return on Equity.Reliability Pricing Model.Regional Transmission Organization, responsible for moving electricity over largeinterstate areas.Sabine Mining Company, a lignite mining company that is a consolidated VIE forAEP and SWEPCo.Santa Rita East Wind Holdings, LLC, a consolidated VIE whose sole purpose is toown and operate a 302 MW wind generation facility in west Texas in whichAEP owns an 85% interest.iv

TermSECSEETSempra Renewables LLCSIASIPSNFSO2SPPSSOState TranscosSWEPCoSWTCoTATax ReformTCATCCTexas RestructuringLegislationTNCTransition FundingTransource EnergyTrentTurk PlantUMWAUPAUtility Money PoolVIEVirginia SCCWPCoWVPSCWVTCoMeaningU.S. Securities and Exchange Commission.Significantly Excessive Earnings Test.Sempra Renewables LLC, acquired in April 2019, consists of 724 MWs of windgeneration and battery assets in the United States.System Integration Agreement, effective June 15, 2000, as amended, providescontractual basis for coordinated planning, operation and maintenance of thepower supply sources of the combined AEP.State Implementation Plan.Spent Nuclear Fuel.Sulfur dioxide.Southwest Power Pool regional transmission organization.Standard service offer.AEPTCo’s seven wholly-owned, FERC regulated, transmission only electricutilities, which are geographically aligned with AEP's existing utility operatingcompanies.Southwestern Electric Power Company, an AEP electric utility subsidiary.AEP Southwestern Transmission Company, Inc., a wholly-owned AEPTCotransmission subsidiary.Transmission Agreement, effective November 2010, among APCo, I&M, KGPCo,KPCo, OPCo and WPCo with AEPSC as agent.On December 22, 2017, President Trump signed into law legislation referred to asthe “Tax Cuts and Jobs Act” (the TCJA). The TCJA includes significantchanges to the Internal Revenue Code of 1986, including a reduction in thecorporate federal income tax rate from 35% to 21% effective January 1, 2018.Transmission Coordination Agreement dated January 1, 1997, by and among, PSO,SWEPCo and AEPSC, in connection with the operation of the transmissionassets of the two public utility subsidiaries.Formerly AEP Texas Central Company; now a division of AEP Texas.Legislation enacted in 1999 to restructure the electric utility industry in Texas.Formerly AEP Texas North Company; now a division of AEP Texas.AEP Texas Central Transition Funding II LLC and AEP Texas Central TransitionFunding III LLC, wholly-owned subsidiaries of TCC and consolidated VIEformed for the purpose of issuing and servicing securitization bonds related toTexas Restructuring Legislation. In July 2020, the final AEP Texas CentralTransition Funding II LLC securitization bond matured.Transource Energy, LLC, a consolidated VIE formed for the purpose of investing inutilities which develop, acquire, construct, own and operate transmissionfacilities in accordance with FERC-approved rates.Trent Wind Farm LLC, a 156 MW wind electricity generation facility locatedbetween Abilene and Sweetwater in west Texas in which AEP owns a 100%interest.John W. Turk, Jr. Plant, a 650 MW coal-fired plant in Arkansas that is 73% ownedby SWEPCo.United Mine Workers of America.Unit Power Agreement.Centralized funding mechanism AEP uses to meet the short-term cash requirementsof certain utility subsidiaries.Variable Interest Entity.Virginia State Corporation Commission.Wheeling Power Company, an AEP electric utility subsidiary.Public Service Commission of West Virginia.AEP West Virginia Transmission Company, Inc., a wholly-owned AEPTCotransmission subsidiary.v

FORWARD-LOOKING INFORMATIONThis report made by the Registrants contains forward-looking statements within the meaning of Section 21E of theSecurities Exchange Act of 1934. Many forward-looking statements appear in “Item 7 – Management’s Discussionand Analysis of Financial Condition and Results of Operations,” but there are others throughout this documentwhich may be identified by words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “will,” “should,”“could,” “would,” “project,” “continue” and similar expressions, and include statements reflecting future results orguidance and statements of outlook. These matters are subject to risks and uncertainties that could cause actualresults to differ materially from those projected. Forward-looking statements in this document are presented as ofthe date of this document. Except to the extent required by applicable law, management undertakes no obligation toupdate or revise any forward-looking statement. Among the factors that could cause actual results to differmaterially from those in the forward-looking statements are: Changes in economic conditions, electric market demand and demographic patterns in AEP service territories. The impact of pandemics, including COVID-19, and any associated disruption of AEP’s business operationsdue to impacts on economic or market conditions, electricity usage, employees, customers, service providers,vendors and suppliers. Inflationary or deflationary interest rate trends. Volatility in the financial markets, particularly developments affecting the availability or cost of capital tofinance new capital projects and refinance existing debt. The availability and cost of funds to finance working capital and capital needs, particularly during periodswhen the time lag between incurring costs and recovery is long and the costs are material. Decreased demand for electricity. Weather conditions, including storms and drought conditions, and the ability to recover significant stormrestoration costs. The cost of fuel and its transportation, the creditworthiness and performance of fuel suppliers and transportersand the cost of storing and disposing of used fuel, including coal ash and SNF. The availability of fuel and necessary generation capacity and the performance of generation plants. The ability to recover fuel and other energy costs through regulated or competitive electric rates. The ability to build or acquire renewable generation, transmission lines and facilities (including the ability toobtain any necessary regulatory approvals and permits) when needed at acceptable prices and terms, includingfavorable tax treatment, and to recover those costs. New legislation, litigation and government regulation, including changes to tax laws and regulations, oversightof nuclear generation, energy commodity trading and new or heightened requirements for reduced emissions ofsulfur, nitrogen, mercury, carbon, soot or PM and other substances that could impact the continued operation,cost recovery and/or profitability of generation plants and related assets. Evolving public perception of the risks associated with fuels used before, during and after the generation ofelectricity, including coal ash and nuclear fuel. Timing and resolution of pending and future rate cases, negotiations and other regulatory decisions, includingrate or other recovery of new investments in generation, distribution and transmission service andenvironmental compliance. Resolution of litigation. The ability to constrain operation and maintenance costs. Prices and demand for power generated and sold at wholesale. Changes in technology, p

ITC Investment Tax Credit. IURC Indiana Utility Regulatory Commission. KGPCo Kingsport Power Company, an AEP electric utility subsidiary. . MATS Mercury and Air Toxic Standards. MISO Midcontinent Independent System Operator. MMBtu Million Britis