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Our new operating units are profiled in this report. I hope you will read about them to get a sense of our front-line operations and the people who run them. 

ACHIEVEMENTS AND CHALLENGES Once again, in 2004, AEP faced many operational challenges. And, once again, our people responded. 

Severe ice storms crippled much of our Ohio service territory in late De- cember. Nearly 2,000 people from 13 states – including AEP employees, contrac- tors and neighboring utilities’ employees – spent time away from their families during the holidays, working in frigid, sometimes hazardous conditions to restore power to our customers. 

Last summer, AEP dispatched hundreds of employees and contractors to Florida to assist utilities ravaged by several hurricanes that hit in rapid succes- sion. Times like these truly demonstrate the skill, dedication and drive of our employees. 

Despite our overall high-quality service, we continue to address service reli- ability issues in areas of our service territory. In Ohio, we have made progress on a program to improve the performance of our least-reliable energy distribution circuits by an average of 40 percent. We are also working hard to improve service reliability in Oklahoma, where new service quality rules took effect last year, and in Louisiana and other states. 

I’m pleased to tell you that, after a permitting process that stretched over some 15 years, construction began in 2004 on the Wyoming-Jacksons Ferry 765- kilovolt transmission line. We hope to complete the 90-mile line in mid-2006. The new line will help reinforce the transmission system serving southern West Vir- ginia, southwestern Virginia and eastern Kentucky, where energy demand has skyrocketed since the last major transmission line was built to serve that region more than 30 years ago. The projected cost of building the line is $271 million. 

All told, AEP invested nearly $800 million in our energy delivery system last year. We plan to invest more than $1 billion in the system this year to improve performance where needed. 

AEP joined PJM Interconnection in October, fulfilling our commitment at the time of the Central & South West merger to join Regional Transmission Or- ganizations (RTOs). PJM, based in Valley Forge, Pa., oversees transmission sys- tem reliability in a 12-state region encompassing AEP’s eastern service territory and provides a larger common market for AEP generation. Our success in the PJM market increases as we gain experience, and we believe our membership will produce long-term benefits for customers and shareholders. 

The Federal Energy Regulatory Commission also has approved Southwest Power Pool (SPP) as an RTO. AEP transmission assets in Oklahoma, Louisiana, Arkansas and a portion of Texas fall within SPP. 

Our D.C. Cook nuclear plant set site records in 2004 for generation and capacity factor, surpassing milestones reached in 1996. Last year, the plant gener- 

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