DISPOSITION PLANT SEVERANCE

AEP retired several generation plants or units of plants during 2015. These plant closures resulted in involuntary severances. The severance program provides two weeks of base pay for every year of service along with other severance benefits.

The disposition plant severance activity for the nine months ended September 30, 2015 is described in the following table:



	Disposition Plant Severance Activity
	(in millions)
Balance as of December 31, 2014	$	29
Incurred	3
Settled	(21		)
Adjustments	—
Balance as of September 30, 2015	$	11

We recorded a charge of $29 million to Other Operation expense in 2014 primarily related to employees at the disposition plants. These expenses, net of adjustments, relate primarily to severance benefits and are included primarily in Other Operation expense on the condensed statements of income. Of the cumulative expense, approximately 32% was within the Generation & Marketing segment and 68% was within the Vertically Integrated Utilities segment. The remaining liability is included in Other Current Liabilities on the condensed balance sheets. We incurred additional charges during the second quarter of 2015 as severance plans were finalized after the plants were retired. We do not expect additional severance costs to be incurred related to this initiative.

Cost Reduction Programs

DISPOSITION PLANT SEVERANCE

Management retired several generation plants or units of plants during 2015. These plant closures resulted in involuntary severances. The severance program provides two weeks of base pay for every year of service along with other severance benefits.

The Registrant Subsidiaries' disposition plant severance activity for the nine months ended September 30, 2015 is described in the following table:



	Balance as of		Expense Allocation from			Incurred by Registrant									Remaining Balance as of
Company	December 31, 2014		AEPSC			Subsidiaries		Settled				Adjustments			September 30, 2015
	(in thousands)
APCo	$	9,304	$	(6	)	$	849	$	(6,385	)	(a)	$	(119	)	$	3,643
I&M	8,023		(2		)	351		(5,110		)		—			3,262
PSO	134		(3		)	415		(121		)		—			425
SWEPCo	84		(4		)	—		(79		)		—			1

(a) Settled includes amounts received from affiliates for expenses related to joint plant.

The Registrant Subsidiaries recorded charges to Other Operation expense in 2014 primarily related to employees at the disposition plants. The total amount incurred in 2014 by Registrant Subsidiary was as follows:



Company	Total Cost Incurred
	(in thousands)
APCo	$	7,112
I&M	8,185
OPCo	80
PSO	288
SWEPCo	289

These expenses, net of adjustments, relate primarily to severance benefits and are included primarily in Other Operation expense on the condensed statements of income. The remaining liability is included in Other Current Liabilities on the condensed balance sheets. The Registrant Subsidiaries incurred additional charges during the second quarter of 2015 as severance plans were finalized after the plants were retired. Management does not expect additional severance costs to be incurred related to this initiative.

Cost Reduction Programs

DISPOSITION PLANT SEVERANCE

Management retired several generation plants or units of plants during 2015. These plant closures resulted in involuntary severances. The severance program provides two weeks of base pay for every year of service along with other severance benefits.

The Registrant Subsidiaries' disposition plant severance activity for the nine months ended September 30, 2015 is described in the following table:



	Balance as of		Expense Allocation from			Incurred by Registrant									Remaining Balance as of
Company	December 31, 2014		AEPSC			Subsidiaries		Settled				Adjustments			September 30, 2015
	(in thousands)
APCo	$	9,304	$	(6	)	$	849	$	(6,385	)	(a)	$	(119	)	$	3,643
I&M	8,023		(2		)	351		(5,110		)		—			3,262
PSO	134		(3		)	415		(121		)		—			425
SWEPCo	84		(4		)	—		(79		)		—			1

(a) Settled includes amounts received from affiliates for expenses related to joint plant.

The Registrant Subsidiaries recorded charges to Other Operation expense in 2014 primarily related to employees at the disposition plants. The total amount incurred in 2014 by Registrant Subsidiary was as follows:



Company	Total Cost Incurred
	(in thousands)
APCo	$	7,112
I&M	8,185
OPCo	80
PSO	288
SWEPCo	289

These expenses, net of adjustments, relate primarily to severance benefits and are included primarily in Other Operation expense on the condensed statements of income. The remaining liability is included in Other Current Liabilities on the condensed balance sheets. The Registrant Subsidiaries incurred additional charges during the second quarter of 2015 as severance plans were finalized after the plants were retired. Management does not expect additional severance costs to be incurred related to this initiative.

Cost Reduction Programs

DISPOSITION PLANT SEVERANCE

Management retired several generation plants or units of plants during 2015. These plant closures resulted in involuntary severances. The severance program provides two weeks of base pay for every year of service along with other severance benefits.

The Registrant Subsidiaries' disposition plant severance activity for the nine months ended September 30, 2015 is described in the following table:



	Balance as of		Expense Allocation from			Incurred by Registrant									Remaining Balance as of
Company	December 31, 2014		AEPSC			Subsidiaries		Settled				Adjustments			September 30, 2015
	(in thousands)
APCo	$	9,304	$	(6	)	$	849	$	(6,385	)	(a)	$	(119	)	$	3,643
I&M	8,023		(2		)	351		(5,110		)		—			3,262
PSO	134		(3		)	415		(121		)		—			425
SWEPCo	84		(4		)	—		(79		)		—			1

(a) Settled includes amounts received from affiliates for expenses related to joint plant.

The Registrant Subsidiaries recorded charges to Other Operation expense in 2014 primarily related to employees at the disposition plants. The total amount incurred in 2014 by Registrant Subsidiary was as follows:



Company	Total Cost Incurred
	(in thousands)
APCo	$	7,112
I&M	8,185
OPCo	80
PSO	288
SWEPCo	289

These expenses, net of adjustments, relate primarily to severance benefits and are included primarily in Other Operation expense on the condensed statements of income. The remaining liability is included in Other Current Liabilities on the condensed balance sheets. The Registrant Subsidiaries incurred additional charges during the second quarter of 2015 as severance plans were finalized after the plants were retired. Management does not expect additional severance costs to be incurred related to this initiative.

Cost Reduction Programs

DISPOSITION PLANT SEVERANCE

Management retired several generation plants or units of plants during 2015. These plant closures resulted in involuntary severances. The severance program provides two weeks of base pay for every year of service along with other severance benefits.

The Registrant Subsidiaries' disposition plant severance activity for the nine months ended September 30, 2015 is described in the following table:



	Balance as of		Expense Allocation from			Incurred by Registrant									Remaining Balance as of
Company	December 31, 2014		AEPSC			Subsidiaries		Settled				Adjustments			September 30, 2015
	(in thousands)
APCo	$	9,304	$	(6	)	$	849	$	(6,385	)	(a)	$	(119	)	$	3,643
I&M	8,023		(2		)	351		(5,110		)		—			3,262
PSO	134		(3		)	415		(121		)		—			425
SWEPCo	84		(4		)	—		(79		)		—			1

(a) Settled includes amounts received from affiliates for expenses related to joint plant.

The Registrant Subsidiaries recorded charges to Other Operation expense in 2014 primarily related to employees at the disposition plants. The total amount incurred in 2014 by Registrant Subsidiary was as follows:



Company	Total Cost Incurred
	(in thousands)
APCo	$	7,112
I&M	8,185
OPCo	80
PSO	288
SWEPCo	289

These expenses, net of adjustments, relate primarily to severance benefits and are included primarily in Other Operation expense on the condensed statements of income. The remaining liability is included in Other Current Liabilities on the condensed balance sheets. The Registrant Subsidiaries incurred additional charges during the second quarter of 2015 as severance plans were finalized after the plants were retired. Management does not expect additional severance costs to be incurred related to this initiative.

Cost Reduction Programs

DISPOSITION PLANT SEVERANCE

Management retired several generation plants or units of plants during 2015. These plant closures resulted in involuntary severances. The severance program provides two weeks of base pay for every year of service along with other severance benefits.

The Registrant Subsidiaries' disposition plant severance activity for the nine months ended September 30, 2015 is described in the following table:



	Balance as of		Expense Allocation from			Incurred by Registrant									Remaining Balance as of
Company	December 31, 2014		AEPSC			Subsidiaries		Settled				Adjustments			September 30, 2015
	(in thousands)
APCo	$	9,304	$	(6	)	$	849	$	(6,385	)	(a)	$	(119	)	$	3,643
I&M	8,023		(2		)	351		(5,110		)		—			3,262
PSO	134		(3		)	415		(121		)		—			425
SWEPCo	84		(4		)	—		(79		)		—			1

(a) Settled includes amounts received from affiliates for expenses related to joint plant.

The Registrant Subsidiaries recorded charges to Other Operation expense in 2014 primarily related to employees at the disposition plants. The total amount incurred in 2014 by Registrant Subsidiary was as follows:



Company	Total Cost Incurred
	(in thousands)
APCo	$	7,112
I&M	8,185
OPCo	80
PSO	288
SWEPCo	289

These expenses, net of adjustments, relate primarily to severance benefits and are included primarily in Other Operation expense on the condensed statements of income. The remaining liability is included in Other Current Liabilities on the condensed balance sheets. The Registrant Subsidiaries incurred additional charges during the second quarter of 2015 as severance plans were finalized after the plants were retired. Management does not expect additional severance costs to be incurred related to this initiative.