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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Book Values and Fair Values of Long-term Debt

	September 30, 2012				December 31, 2011
	Book Value		Fair Value		Book Value		Fair Value
	(in millions)
Long-term Debt	$	17,227	$	20,457	$	16,516	$	19,259

Other Temporary Investments

			September 30, 2012
					Gross		Gross		Estimated
					Unrealized		Unrealized		Fair
Other Temporary Investments			Cost		Gains		Losses		Value
			(in millions)
Restricted Cash (a)			$	197	$	-	$	-	$	197
Fixed Income Securities:
	Mutual Funds			64		1		-		65
Equity Securities - Mutual Funds				11		5		-		16
Total Other Temporary Investments			$	272	$	6	$	-	$	278

			December 31, 2011
					Gross		Gross		Estimated
					Unrealized		Unrealized		Fair
Other Temporary Investments			Cost		Gains		Losses		Value
			(in millions)
Restricted Cash (a)			$	216	$	-	$	-	$	216
Fixed Income Securities:
	Mutual Funds			64		-		-		64
Equity Securities - Mutual Funds				11		3		-		14
Total Other Temporary Investments			$	291	$	3	$	-	$	294

(a)		Primarily represents amounts held for the repayment of debt.

Debt and Equity Securities Within Other Temporary Investments

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
	(in millions)
Proceeds from Investment Sales	$	-	$	21	$	-	$	268
Purchases of Investments		-		-		1		153
Gross Realized Gains on Investment Sales		-		4		-		4
Gross Realized Losses on Investment Sales		-		-		-		-

Total Accumulated Other Comprehensive Income (Loss) Activity for Other Temporary Investments

Total Accumulated Other Comprehensive Income (Loss) Activity for Other Temporary Investments
Three Months Ended September 30, 2012

		(in millions)
Balance in AOCI as of June 30, 2012		$	3
Changes in Fair Value Recognized in AOCI			1
Amount of (Gain) or Loss Reclassified from AOCI to Statement of Income:
	Interest Income		-
Balance in AOCI as of September 30, 2012		$	4

Total Accumulated Other Comprehensive Income (Loss) Activity for Other Temporary Investments
Nine Months Ended September 30, 2012

		(in millions)
Balance in AOCI as of December 31, 2011		$	2
Changes in Fair Value Recognized in AOCI			2
Amount of (Gain) or Loss Reclassified from AOCI to Statement of Income:
	Interest Income		-
Balance in AOCI as of September 30, 2012		$	4

Nuclear Trust Fund Investments

		September 30, 2012						December 31, 2011
		Estimated		Gross		Other-Than-		Estimated		Gross		Other-Than-
		Fair		Unrealized		Temporary		Fair		Unrealized		Temporary
		Value		Gains		Impairments		Value		Gains		Impairments
		(in millions)
Cash and Cash Equivalents		$	13	$	-	$	-	$	18	$	-	$	-
Fixed Income Securities:
	United States Government		693		108		(1)		544		61		(1)
	Corporate Debt		36		6		(1)		54		5		(2)
	State and Local Government		226		1		(1)		330		-		(2)
	Subtotal Fixed Income Securities		955		115		(3)		928		66		(5)
Equity Securities - Domestic			732		291		(78)		646		215		(80)
Spent Nuclear Fuel and
	Decommissioning Trusts	$	1,700	$	406	$	(81)	$	1,592	$	281	$	(85)

Securities Activity Within the Decommissioning and SNF Trusts

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
	(in millions)
Proceeds from Investment Sales	$	182	$	361	$	699	$	826
Purchases of Investments		199		379		744		871
Gross Realized Gains on Investment Sales		2		18		7		30
Gross Realized Losses on Investment Sales		1		12		3		21

Contractual Maturities, Fair Value of Debt Securities in Nuclear Trusts

	Fair Value of
	Fixed Income
	Securities
	(in millions)
Within 1 year	$	136
1 year – 5 years		357
5 years – 10 years		265
After 10 years		197
Total	$	955

Fair Value, Assets and Liabilities Measured on Recurring Basis

Assets and Liabilities Measured at Fair Value on a Recurring Basis
September 30, 2012

			Level 1		Level 2		Level 3		Other		Total
Assets:			(in millions)

Cash and Cash Equivalents (a) (e)			$	20	$	1	$	-	$	422	$	443

Other Temporary Investments
Restricted Cash (a) (e)				183		5		-		9		197
Fixed Income Securities:
	Mutual Funds			65		-		-		-		65
Equity Securities - Mutual Funds (b)				16		-		-		-		16
Total Other Temporary Investments				264		5		-		9		278

Risk Management Assets
Risk Management Commodity Contracts (c) (f)				47		1,076		166		(778)		511
Cash Flow Hedges:
	Commodity Hedges (c)			9		37		2		(15)		33
Fair Value Hedges				-		2		-		-		2
De-designated Risk Management Contracts (d)				-		-		-		19		19
Total Risk Management Assets				56		1,115		168		(774)		565

Spent Nuclear Fuel and Decommissioning Trusts
Cash and Cash Equivalents (e)				-		5		-		8		13
Fixed Income Securities:
	United States Government			-		693		-		-		693
	Corporate Debt			-		36		-		-		36
	State and Local Government			-		226		-		-		226
		Subtotal Fixed Income Securities		-		955		-		-		955
Equity Securities - Domestic (b)				732		-		-		-		732
Total Spent Nuclear Fuel and Decommissioning Trusts				732		960		-		8		1,700

Total Assets			$	1,072	$	2,081	$	168	$	(335)	$	2,986

Liabilities:

Risk Management Liabilities
Risk Management Commodity Contracts (c) (f)			$	42	$	994	$	64	$	(797)	$	303
Cash Flow Hedges:
	Commodity Hedges (c)			-		47		-		(15)		32
	Interest Rate/Foreign Currency Hedges			-		39		-		-		39
Total Risk Management Liabilities			$	42	$	1,080	$	64	$	(812)	$	374

Assets and Liabilities Measured at Fair Value on a Recurring Basis
December 31, 2011

			Level 1		Level 2		Level 3		Other		Total
Assets:			(in millions)

Cash and Cash Equivalents (a)			$	6	$	-	$	-	$	215	$	221

Other Temporary Investments
Restricted Cash (a)				191		-		-		25		216
Fixed Income Securities:
	Mutual Funds			64		-		-		-		64
Equity Securities - Mutual Funds (b)				14		-		-		-		14
Total Other Temporary Investments				269		-		-		25		294

Risk Management Assets
Risk Management Commodity Contracts (c) (g)				47		1,299		147		(945)		548
Cash Flow Hedges:
	Commodity Hedges (c)			15		23		-		(18)		20
De-designated Risk Management Contracts (d)				-		-		-		28		28
Total Risk Management Assets				62		1,322		147		(935)		596

Spent Nuclear Fuel and Decommissioning Trusts
Cash and Cash Equivalents (e)				-		5		-		13		18
Fixed Income Securities:
	United States Government			-		544		-		-		544
	Corporate Debt			-		54		-		-		54
	State and Local Government			-		330		-		-		330
		Subtotal Fixed Income Securities		-		928		-		-		928
Equity Securities - Domestic (b)				646		-		-		-		646
Total Spent Nuclear Fuel and Decommissioning Trusts				646		933		-		13		1,592

Total Assets			$	983	$	2,255	$	147	$	(682)	$	2,703

Liabilities:

Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)			$	43	$	1,209	$	78	$	(1,052)	$	278
Cash Flow Hedges:
	Commodity Hedges (c)			-		43		-		(18)		25
	Interest Rate/Foreign Currency Hedges			-		42		-		-		42
Total Risk Management Liabilities			$	43	$	1,294	$	78	$	(1,070)	$	345

(a) Amounts in ''Other'' column primarily represent cash deposits in bank accounts with financial institutions or with third parties. Level 1 amounts primarily represent investments in money market funds.

(b) Amounts represent publicly traded equity securities and equity-based mutual funds.

(c) Amounts in ''Other'' column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for ''Derivatives and Hedging.''

(d) Represents contracts that were originally MTM but were subsequently elected as normal under the accounting guidance for ''Derivatives and Hedging.'' At the time of the normal election, the MTM value was frozen and no longer fair valued. This MTM value will be amortized into revenues over the remaining life of the contracts.

(e) Amounts in ''Other'' column primarily represent accrued interest receivables from financial institutions. Level 2 amounts primarily represent investments in money market funds.

(f) The September 30, 2012 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $12 million in periods 2013-2015 and ($7) million in periods 2016-2018; Level 2 matures $59 million in periods 2013-2015, $14 million in periods 2016-2017 and $9 million in periods 2018-2030; Level 3 matures $7 million in 2012, $35 million in periods 2013-2015, $31 million in periods 2016-2017 and $29 million in periods 2018-2030. Risk management commodity contracts are substantially comprised of power contracts.

(g) The December 31, 2011 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $3 million in 2012, $7 million in periods 2013-2015 and ($6) million in periods 2016-2018; Level 2 matures $21 million in 2012, $50 million in periods 2013-2015, $11 million in periods 2016-2017 and $8 million in periods 2018-2030; Level 3 matures ($19) million in 2012, $44 million in periods 2013-2015, $18 million in periods 2016-2017 and $26 million in periods 2018-2030. Risk management commodity contracts are substantially comprised of power contracts.

Changes in Fair Value of Net Trading Derivatives and Other Investments

		Net Risk Management
Three Months Ended September 30, 2012		Assets (Liabilities)
		(in millions)
Balance as of June 30, 2012		$	97
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (a) (b)			(5)
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets)
	Relating to Assets Still Held at the Reporting Date (a)		7
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income			5
Purchases, Issuances and Settlements (c)			4
Transfers into Level 3 (d) (f)			(3)
Transfers out of Level 3 (e) (f)			(1)
Changes in Fair Value Allocated to Regulated Jurisdictions (g)			-
Balance as of September 30, 2012		$	104

		Net Risk Management
Three Months Ended September 30, 2011		Assets (Liabilities)
		(in millions)
Balance as of June 30, 2011		$	77
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (a) (b)			(16)
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets)
	Relating to Assets Still Held at the Reporting Date (a)		(5)
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income			-
Purchases, Issuances and Settlements (c)			3
Transfers into Level 3 (d) (f)			5
Transfers out of Level 3 (e) (f)			(1)
Changes in Fair Value Allocated to Regulated Jurisdictions (g)			1
Balance as of September 30, 2011		$	64

		Net Risk Management
Nine Months Ended September 30, 2012		Assets (Liabilities)
		(in millions)
Balance as of December 31, 2011		$	69
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (a) (b)			(16)
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets)
	Relating to Assets Still Held at the Reporting Date (a)		20
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income			2
Purchases, Issuances and Settlements (c)			33
Transfers into Level 3 (d) (f)			10
Transfers out of Level 3 (e) (f)			(21)
Changes in Fair Value Allocated to Regulated Jurisdictions (g)			7
Balance as of September 30, 2012		$	104

		Net Risk Management
Nine Months Ended September 30, 2011		Assets (Liabilities)
		(in millions)
Balance as of December 31, 2010		$	85
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (a) (b)			(11)
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets)
	Relating to Assets Still Held at the Reporting Date (a)		-
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income			-
Purchases, Issuances and Settlements (c)			5
Transfers into Level 3 (d) (f)			9
Transfers out of Level 3 (e) (f)			(12)
Changes in Fair Value Allocated to Regulated Jurisdictions (g)			(12)
Balance as of September 30, 2011		$	64

(a) Included in revenues on our condensed statements of income.

(b) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract.

(d) Represents existing assets or liabilities that were previously categorized as Level 2.

(e) Represents existing assets or liabilities that were previously categorized as Level 3.

(f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred.

(g) Relates to the net gains (losses) of those contracts that are not reflected on our condensed statements of income. These net gains (losses) are recorded as regulatory liabilities/assets.

Significant Unobservable Inputs for Level 3

	Fair Value				Valuation	Significant	Input/Range
	Assets		Liabilities		Technique	Unobservable Input	Low		High
	(in millions)
Energy Contracts	$	160	$	57	Discounted Cash Flow	Forward Market Price (a)	$	10.45	$	117.64
						Counterparty Credit Risk (b)		457
FTRs		8		7	Discounted Cash Flow	Forward Market Price (a)		(7.71)		9.92
Total	$	168	$	64

Represents market prices in dollars per MWh.
Represents average price of credit default swaps used to calculate counterparty credit risk, reported in basis points.

Appalachian Power Co [Member]

Book Values and Fair Values of Long-term Debt

	September 30, 2012				December 31, 2011
Company	Book Value		Fair Value		Book Value		Fair Value
	(in thousands)
APCo	$	3,702,283	$	4,597,740	$	3,726,251	$	4,431,912
I&M		2,109,630		2,431,912		2,057,675		2,339,344
OPCo		3,860,242		4,589,998		4,054,148		4,665,739
PSO		949,884		1,187,155		947,364		1,123,306
SWEPCo		2,046,139		2,424,311		1,728,637		2,019,094

Fair Value, Assets and Liabilities Measured on Recurring Basis

Assets and Liabilities Measured at Fair Value on a Recurring Basis
September 30, 2012
APCo
		Level 1		Level 2		Level 3		Other		Total
Assets:		(in thousands)

Risk Management Assets
Risk Management Commodity Contracts (a) (f)		$	4,301	$	219,033	$	23,357	$	(178,608)	$	68,083
Cash Flow Hedges:
	Commodity Hedges (a)		-		1,306		289		(670)		925
De-designated Risk Management Contracts (b)			-		-		-		590		590
Total Risk Management Assets		$	4,301	$	220,339	$	23,646	$	(178,688)	$	69,598

Liabilities:

Risk Management Liabilities
Risk Management Commodity Contracts (a) (f)		$	1,931	$	209,732	$	12,606	$	(186,641)	$	37,628
Cash Flow Hedges:
	Commodity Hedges (a)		-		2,173		-		(670)		1,503
Total Risk Management Liabilities		$	1,931	$	211,905	$	12,606	$	(187,311)	$	39,131

Assets and Liabilities Measured at Fair Value on a Recurring Basis
December 31, 2011
APCo
		Level 1		Level 2		Level 3		Other		Total
Assets:		(in thousands)

Risk Management Assets
Risk Management Commodity Contracts (a) (f)		$	4,680	$	302,128	$	25,423	$	(255,324)	$	76,907
Cash Flow Hedges:
	Commodity Hedges (a)		-		1,095		-		(664)		431
De-designated Risk Management Contracts (b)			-		-		-		1,533		1,533
Total Risk Management Assets		$	4,680	$	303,223	$	25,423	$	(254,455)	$	78,871

Liabilities:

Risk Management Liabilities
Risk Management Commodity Contracts (a) (f)		$	2,535	$	291,194	$	23,379	$	(279,997)	$	37,111
Cash Flow Hedges:
	Commodity Hedges (a)		-		3,009		73		(664)		2,418
Total Risk Management Liabilities		$	2,535	$	294,203	$	23,452	$	(280,661)	$	39,529

(a) Amounts in “Other” column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.”

(b) Represents contracts that were originally MTM but were subsequently elected as normal under the accounting guidance for “Derivatives and Hedging.” At the time of the normal election, the MTM value was frozen and no longer fair valued. This MTM value will be amortized into revenues over the remaining life of the contracts.

(c) Amounts in “Other” column primarily represent cash deposits with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds.

(d) Amounts in “Other” column primarily represent accrued interest receivables from financial institutions. Level 2 amounts primarily represent investments in money market funds.

(e) Amounts represent publicly traded equity securities and equity-based mutual funds.

(f) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo.

Changes in Fair Value of Net Trading Derivatives and Other Investments

Three Months Ended September 30, 2012		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of June 30, 2012		$	12,864	$	9,049	$	18,969	$	-	$	-
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(3,540)		(2,440)		(5,024)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		(1,030)		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		403		277		571		-		-
Purchases, Issuances and Settlements (c)			929		635		1,299		-		-
Transfers into Level 3 (d) (f)			654		460		964		-		-
Transfers out of Level 3 (e) (f)			(287)		(202)		(423)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		17		(193)		253		-		-
Balance as of September 30, 2012		$	11,040	$	7,586	$	15,579	$	-	$	-

Three Months Ended September 30, 2011		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of June 30, 2011		$	5,321	$	3,150	$	6,759	$	-	$	-
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(4,553)		(2,904)		(6,138)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		(939)		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		(7)		(7)		(13)		-		-
Purchases, Issuances and Settlements (c)			358		297		599		-		-
Transfers into Level 3 (d) (f)			-		-		-		-		-
Transfers out of Level 3 (e) (f)			(259)		(154)		(330)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		(91)		112		1,103		-		-
Balance as of September 30, 2011		$	769	$	494	$	1,041	$	-	$	-

Nine Months Ended September 30, 2012		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of December 31, 2011		$	1,971	$	1,263	$	2,666	$	-	$	-
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(5,108)		(3,488)		(7,316)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		4,973		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		312		211		435		-		-
Purchases, Issuances and Settlements (c)			10,605		7,325		15,375		-		-
Transfers into Level 3 (d) (f)			4,142		2,749		5,789		-		-
Transfers out of Level 3 (e) (f)			(4,910)		(3,193)		(6,733)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		4,028		2,719		390		-		-
Balance as of September 30, 2012		$	11,040	$	7,586	$	15,579	$	-	$	-

Nine Months Ended September 30, 2011		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of December 31, 2010		$	5,131	$	3,108	$	6,583	$	1	$	2
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(2,373)		(1,401)		(3,007)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		1,947		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		(45)		(29)		(61)		-		-
Purchases, Issuances and Settlements (c)			2,835		1,656		3,567		-		-
Transfers into Level 3 (d) (f)			1,299		764		1,638		-		-
Transfers out of Level 3 (e) (f)			(3,057)		(1,834)		(3,908)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		(3,021)		(1,770)		(5,718)		(1)		(2)
Balance as of September 30, 2011		$	769	$	494	$	1,041	$	-	$	-

(a) Included in revenues on the condensed statements of income.

(b) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract.

(d) Represents existing assets or liabilities that were previously categorized as Level 2.

(e) Represents existing assets or liabilities that were previously categorized as Level 3.

(f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred.

(g) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory assets/liabilities.

Significant Unobservable Inputs for Level 3

APCo	Fair Value				Valuation	Significant	Forward Price Range
	Assets		Liabilities		Technique	Unobservable Input (a)	Low		High
	(in thousands)
Energy Contracts	$	21,300	$	10,451	Discounted Cash Flow	Forward Market Price	$	10.45	$	63.25
FTRs		2,346		2,155	Discounted Cash Flow	Forward Market Price		(3.81)		9.92
Total	$	23,646	$	12,606

(a) Represents market prices in dollars per MWh.

Indiana Michigan Power Co [Member]

Book Values and Fair Values of Long-term Debt

	September 30, 2012				December 31, 2011
Company	Book Value		Fair Value		Book Value		Fair Value
	(in thousands)
APCo	$	3,702,283	$	4,597,740	$	3,726,251	$	4,431,912
I&M		2,109,630		2,431,912		2,057,675		2,339,344
OPCo		3,860,242		4,589,998		4,054,148		4,665,739
PSO		949,884		1,187,155		947,364		1,123,306
SWEPCo		2,046,139		2,424,311		1,728,637		2,019,094

Nuclear Trust Fund Investments

		September 30, 2012						December 31, 2011
		Estimated		Gross		Other-Than-		Estimated		Gross		Other-Than-
		Fair		Unrealized		Temporary		Fair		Unrealized		Temporary
		Value		Gains		Impairments		Value		Gains		Impairments
		(in thousands)
Cash and Cash Equivalents		$	12,945	$	-	$	-	$	18,229	$	-	$	-
Fixed Income Securities:
	United States Government		693,127		107,721		(612)		543,506		60,946		(547)
	Corporate Debt		35,798		5,531		(1,435)		53,979		4,932		(1,536)
	State and Local Government		226,142		1,301		(660)		329,986		(430)		(2,236)
	Subtotal Fixed Income Securities		955,067		114,553		(2,707)		927,471		65,448		(4,319)
Equity Securities - Domestic			731,679		291,224		(77,662)		646,032		214,748		(79,536)
Spent Nuclear Fuel and
	Decommissioning Trusts	$	1,699,691	$	405,777	$	(80,369)	$	1,591,732	$	280,196	$	(83,855)

Securities Activity Within the Decommissioning and SNF Trusts

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
	(in thousands)
Proceeds from Investment Sales	$	181,988	$	361,001	$	698,567	$	825,689
Purchases of Investments		199,150		378,607		744,131		870,769
Gross Realized Gains on Investment Sales		2,046		17,256		6,978		29,661
Gross Realized Losses on Investment Sales		924		11,313		3,143		20,603

Contractual Maturities, Fair Value of Debt Securities in Nuclear Trusts

	Fair Value of
	Fixed Income
	Securities

	(in thousands)
Within 1 year	$	136,610
1 year – 5 years		356,630
5 years – 10 years		265,125
After 10 years		196,702
Total	$	955,067

Fair Value, Assets and Liabilities Measured on Recurring Basis

Assets and Liabilities Measured at Fair Value on a Recurring Basis
September 30, 2012
I&M
			Level 1		Level 2		Level 3		Other		Total
Assets:			(in thousands)

Risk Management Assets
Risk Management Commodity Contracts (a) (f)			$	2,955	$	154,581	$	16,051	$	(119,809)	$	53,778
Cash Flow Hedges:
	Commodity Hedges (a)			-		880		198		(456)		622
De-designated Risk Management Contracts (b)				-		-		-		406		406
Total Risk Management Assets				2,955		155,461		16,249		(119,859)		54,806

Spent Nuclear Fuel and Decommissioning Trusts
Cash and Cash Equivalents (d)				-		4,995		-		7,950		12,945
Fixed Income Securities:
	United States Government			-		693,127		-		-		693,127
	Corporate Debt			-		35,798		-		-		35,798
	State and Local Government			-		226,142		-		-		226,142
		Subtotal Fixed Income Securities		-		955,067		-		-		955,067
Equity Securities - Domestic (e)				731,679		-		-		-		731,679
Total Spent Nuclear Fuel and Decommissioning Trusts				731,679		960,062		-		7,950		1,699,691

Total Assets			$	734,634	$	1,115,523	$	16,249	$	(111,909)	$	1,754,497

Liabilities:

Risk Management Liabilities
Risk Management Commodity Contracts (a) (f)			$	1,327	$	141,858	$	8,663	$	(125,328)	$	26,520
Cash Flow Hedges:
	Commodity Hedges (a)			-		1,488		-		(456)		1,032
	Interest Rate/Foreign Currency Hedges			-		20,465		-		-		20,465
Total Risk Management Liabilities			$	1,327	$	163,811	$	8,663	$	(125,784)	$	48,017

		Assets and Liabilities Measured at Fair Value on a Recurring Basis
		December 31, 2011
I&M
			Level 1		Level 2		Level 3		Other		Total
Assets:			(in thousands)

Risk Management Assets
Risk Management Commodity Contracts (a) (f)			$	3,001	$	203,175	$	16,305	$	(162,227)	$	60,254
Cash Flow Hedges:
	Commodity Hedges (a)			-		702		-		(425)		277
De-designated Risk Management Contracts (b)				-		-		-		983		983
Total Risk Management Assets				3,001		203,877		16,305		(161,669)		61,514

Spent Nuclear Fuel and Decommissioning Trusts
Cash and Cash Equivalents (d)				-		5,431		-		12,798		18,229
Fixed Income Securities:
	United States Government			-		543,506		-		-		543,506
	Corporate Debt			-		53,979		-		-		53,979
	State and Local Government			-		329,986		-		-		329,986
		Subtotal Fixed Income Securities		-		927,471		-		-		927,471
Equity Securities - Domestic (e)				646,032		-		-		-		646,032
Total Spent Nuclear Fuel and Decommissioning Trusts				646,032		932,902		-		12,798		1,591,732

Total Assets			$	649,033	$	1,136,779	$	16,305	$	(148,871)	$	1,653,246

Liabilities:

Risk Management Liabilities
Risk Management Commodity Contracts (a) (f)			$	1,626	$	185,092	$	14,995	$	(178,022)	$	23,691
Cash Flow Hedges:
	Commodity Hedges (a)			-		1,901		47		(425)		1,523
	Interest Rate/Foreign Currency Hedges			-		10,637		-		-		10,637
Total Risk Management Liabilities			$	1,626	$	197,630	$	15,042	$	(178,447)	$	35,851

(c) Amounts in “Other” column primarily represent cash deposits with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds.

(d) Amounts in “Other” column primarily represent accrued interest receivables from financial institutions. Level 2 amounts primarily represent investments in money market funds.

(e) Amounts represent publicly traded equity securities and equity-based mutual funds.

(f) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo.

Changes in Fair Value of Net Trading Derivatives and Other Investments

Three Months Ended September 30, 2012		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of June 30, 2012		$	12,864	$	9,049	$	18,969	$	-	$	-
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(3,540)		(2,440)		(5,024)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		(1,030)		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		403		277		571		-		-
Purchases, Issuances and Settlements (c)			929		635		1,299		-		-
Transfers into Level 3 (d) (f)			654		460		964		-		-
Transfers out of Level 3 (e) (f)			(287)		(202)		(423)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		17		(193)		253		-		-
Balance as of September 30, 2012		$	11,040	$	7,586	$	15,579	$	-	$	-

Three Months Ended September 30, 2011		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of June 30, 2011		$	5,321	$	3,150	$	6,759	$	-	$	-
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(4,553)		(2,904)		(6,138)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		(939)		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		(7)		(7)		(13)		-		-
Purchases, Issuances and Settlements (c)			358		297		599		-		-
Transfers into Level 3 (d) (f)			-		-		-		-		-
Transfers out of Level 3 (e) (f)			(259)		(154)		(330)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		(91)		112		1,103		-		-
Balance as of September 30, 2011		$	769	$	494	$	1,041	$	-	$	-

Nine Months Ended September 30, 2012		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of December 31, 2011		$	1,971	$	1,263	$	2,666	$	-	$	-
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(5,108)		(3,488)		(7,316)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		4,973		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		312		211		435		-		-
Purchases, Issuances and Settlements (c)			10,605		7,325		15,375		-		-
Transfers into Level 3 (d) (f)			4,142		2,749		5,789		-		-
Transfers out of Level 3 (e) (f)			(4,910)		(3,193)		(6,733)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		4,028		2,719		390		-		-
Balance as of September 30, 2012		$	11,040	$	7,586	$	15,579	$	-	$	-

Nine Months Ended September 30, 2011		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of December 31, 2010		$	5,131	$	3,108	$	6,583	$	1	$	2
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(2,373)		(1,401)		(3,007)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		1,947		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		(45)		(29)		(61)		-		-
Purchases, Issuances and Settlements (c)			2,835		1,656		3,567		-		-
Transfers into Level 3 (d) (f)			1,299		764		1,638		-		-
Transfers out of Level 3 (e) (f)			(3,057)		(1,834)		(3,908)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		(3,021)		(1,770)		(5,718)		(1)		(2)
Balance as of September 30, 2011		$	769	$	494	$	1,041	$	-	$	-

(a) Included in revenues on the condensed statements of income.

(b) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract.

(d) Represents existing assets or liabilities that were previously categorized as Level 2.

(e) Represents existing assets or liabilities that were previously categorized as Level 3.

(f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred.

(g) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory assets/liabilities.

Significant Unobservable Inputs for Level 3

I&M	Fair Value				Valuation	Significant	Forward Price Range
	Assets		Liabilities		Technique	Unobservable Input (a)	Low		High
	(in thousands)
Energy Contracts	$	14,637	$	7,182	Discounted Cash Flow	Forward Market Price	$	10.45	$	63.25
FTRs		1,612		1,481	Discounted Cash Flow	Forward Market Price		(3.81)		9.92
Total	$	16,249	$	8,663

(a) Represents market prices in dollars per MWh.

Ohio Power Co [Member]

Book Values and Fair Values of Long-term Debt

	September 30, 2012				December 31, 2011
Company	Book Value		Fair Value		Book Value		Fair Value
	(in thousands)
APCo	$	3,702,283	$	4,597,740	$	3,726,251	$	4,431,912
I&M		2,109,630		2,431,912		2,057,675		2,339,344
OPCo		3,860,242		4,589,998		4,054,148		4,665,739
PSO		949,884		1,187,155		947,364		1,123,306
SWEPCo		2,046,139		2,424,311		1,728,637		2,019,094

Fair Value, Assets and Liabilities Measured on Recurring Basis

	Assets and Liabilities Measured at Fair Value on a Recurring Basis
	September 30, 2012
OPCo
		Level 1		Level 2		Level 3		Other		Total
Assets:		(in thousands)

Other Cash Deposits (c)		$	-	$	26	$	-	$	39	$	65

Risk Management Assets
Risk Management Commodity Contracts (a) (f)			6,069		318,501		32,962		(260,623)		96,909
Cash Flow Hedges:
	Commodity Hedges (a)		-		1,824		407		(942)		1,289
De-designated Risk Management Contracts (b)			-		-		-		833		833
Total Risk Management Assets			6,069		320,325		33,369		(260,732)		99,031

Total Assets		$	6,069	$	320,351	$	33,369	$	(260,693)	$	99,096

Liabilities:

Risk Management Liabilities
Risk Management Commodity Contracts (a) (f)		$	2,726	$	305,493	$	17,790	$	(271,958)	$	54,051
Cash Flow Hedges:
	Commodity Hedges (a)		-		3,062		-		(942)		2,120
Total Risk Management Liabilities		$	2,726	$	308,555	$	17,790	$	(272,900)	$	56,171

	Assets and Liabilities Measured at Fair Value on a Recurring Basis
	December 31, 2011
OPCo
		Level 1		Level 2		Level 3		Other		Total
Assets:		(in thousands)

Other Cash Deposits (c)		$	26	$	-	$	-	$	22	$	48

Risk Management Assets
Risk Management Commodity Contracts (a) (f)			6,339		421,249		34,425		(356,766)		105,247
Cash Flow Hedges:
	Commodity Hedges (a)		-		1,483		-		(899)		584
De-designated Risk Management Contracts (b)			-		-		-		2,076		2,076
Total Risk Management Assets			6,339		422,732		34,425		(355,589)		107,907

Total Assets		$	6,365	$	422,732	$	34,425	$	(355,567)	$	107,955

Liabilities:

Risk Management Liabilities
Risk Management Commodity Contracts (a) (f)		$	3,433	$	406,259	$	31,659	$	(390,139)	$	51,212
Cash Flow Hedges:
	Commodity Hedges (a)		-		4,038		100		(899)		3,239
Total Risk Management Liabilities		$	3,433	$	410,297	$	31,759	$	(391,038)	$	54,451

(c) Amounts in “Other” column primarily represent cash deposits with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds.

(d) Amounts in “Other” column primarily represent accrued interest receivables from financial institutions. Level 2 amounts primarily represent investments in money market funds.

(e) Amounts represent publicly traded equity securities and equity-based mutual funds.

(f) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo.

Changes in Fair Value of Net Trading Derivatives and Other Investments

Three Months Ended September 30, 2012		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of June 30, 2012		$	12,864	$	9,049	$	18,969	$	-	$	-
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(3,540)		(2,440)		(5,024)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		(1,030)		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		403		277		571		-		-
Purchases, Issuances and Settlements (c)			929		635		1,299		-		-
Transfers into Level 3 (d) (f)			654		460		964		-		-
Transfers out of Level 3 (e) (f)			(287)		(202)		(423)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		17		(193)		253		-		-
Balance as of September 30, 2012		$	11,040	$	7,586	$	15,579	$	-	$	-

Three Months Ended September 30, 2011		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of June 30, 2011		$	5,321	$	3,150	$	6,759	$	-	$	-
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(4,553)		(2,904)		(6,138)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		(939)		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		(7)		(7)		(13)		-		-
Purchases, Issuances and Settlements (c)			358		297		599		-		-
Transfers into Level 3 (d) (f)			-		-		-		-		-
Transfers out of Level 3 (e) (f)			(259)		(154)		(330)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		(91)		112		1,103		-		-
Balance as of September 30, 2011		$	769	$	494	$	1,041	$	-	$	-

Nine Months Ended September 30, 2012		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of December 31, 2011		$	1,971	$	1,263	$	2,666	$	-	$	-
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(5,108)		(3,488)		(7,316)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		4,973		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		312		211		435		-		-
Purchases, Issuances and Settlements (c)			10,605		7,325		15,375		-		-
Transfers into Level 3 (d) (f)			4,142		2,749		5,789		-		-
Transfers out of Level 3 (e) (f)			(4,910)		(3,193)		(6,733)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		4,028		2,719		390		-		-
Balance as of September 30, 2012		$	11,040	$	7,586	$	15,579	$	-	$	-

Nine Months Ended September 30, 2011		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of December 31, 2010		$	5,131	$	3,108	$	6,583	$	1	$	2
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(2,373)		(1,401)		(3,007)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		1,947		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		(45)		(29)		(61)		-		-
Purchases, Issuances and Settlements (c)			2,835		1,656		3,567		-		-
Transfers into Level 3 (d) (f)			1,299		764		1,638		-		-
Transfers out of Level 3 (e) (f)			(3,057)		(1,834)		(3,908)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		(3,021)		(1,770)		(5,718)		(1)		(2)
Balance as of September 30, 2011		$	769	$	494	$	1,041	$	-	$	-

(a) Included in revenues on the condensed statements of income.

(b) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract.

(d) Represents existing assets or liabilities that were previously categorized as Level 2.

(e) Represents existing assets or liabilities that were previously categorized as Level 3.

(f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred.

(g) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory assets/liabilities.

Significant Unobservable Inputs for Level 3

OPCo	Fair Value				Valuation	Significant	Forward Price Range
	Assets		Liabilities		Technique	Unobservable Input (a)	Low		High
	(in thousands)
Energy Contracts	$	30,058	$	14,748	Discounted Cash Flow	Forward Market Price	$	10.45	$	63.25
FTRs		3,311		3,042	Discounted Cash Flow	Forward Market Price		(3.81)		9.92
Total	$	33,369	$	17,790

(a) Represents market prices in dollars per MWh.

Public Service Co Of Oklahoma [Member]

Book Values and Fair Values of Long-term Debt

	September 30, 2012				December 31, 2011
Company	Book Value		Fair Value		Book Value		Fair Value
	(in thousands)
APCo	$	3,702,283	$	4,597,740	$	3,726,251	$	4,431,912
I&M		2,109,630		2,431,912		2,057,675		2,339,344
OPCo		3,860,242		4,589,998		4,054,148		4,665,739
PSO		949,884		1,187,155		947,364		1,123,306
SWEPCo		2,046,139		2,424,311		1,728,637		2,019,094

Fair Value, Assets and Liabilities Measured on Recurring Basis

	Assets and Liabilities Measured at Fair Value on a Recurring Basis
	September 30, 2012
PSO
		Level 1		Level 2		Level 3		Other		Total
Assets:		(in thousands)

Risk Management Assets
Risk Management Commodity Contracts (a) (f)		$	8	$	5,126	$	-	$	(4,511)	$	623
Cash Flow Hedges:
	Commodity Hedges (a)		-		58		-		(12)		46
Total Risk Management Assets		$	8	$	5,184	$	-	$	(4,523)	$	669

Liabilities:

Risk Management Liabilities
Risk Management Commodity Contracts (a) (f)		$	6	$	10,625	$	-	$	(4,515)	$	6,116
Cash Flow Hedges:
	Commodity Hedges (a)		-		18		-		(12)		6
Total Risk Management Liabilities		$	6	$	10,643	$	-	$	(4,527)	$	6,122

	Assets and Liabilities Measured at Fair Value on a Recurring Basis
	December 31, 2011
PSO
		Level 1		Level 2		Level 3		Other		Total
Assets:		(in thousands)

Risk Management Assets
Risk Management Commodity Contracts (a) (f)		$	97	$	7,797	$	-	$	(7,015)	$	879

Liabilities:

Risk Management Liabilities
Risk Management Commodity Contracts (a) (f)		$	53	$	9,542	$	-	$	(7,092)	$	2,503
Cash Flow Hedges:
	Commodity Hedges		-		107		-		-		107
Total Risk Management Liabilities		$	53	$	9,649	$	-	$	(7,092)	$	2,610

(c) Amounts in “Other” column primarily represent cash deposits with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds.

(d) Amounts in “Other” column primarily represent accrued interest receivables from financial institutions. Level 2 amounts primarily represent investments in money market funds.

(e) Amounts represent publicly traded equity securities and equity-based mutual funds.

(f) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo.

Changes in Fair Value of Net Trading Derivatives and Other Investments

Three Months Ended September 30, 2012		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of June 30, 2012		$	12,864	$	9,049	$	18,969	$	-	$	-
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(3,540)		(2,440)		(5,024)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		(1,030)		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		403		277		571		-		-
Purchases, Issuances and Settlements (c)			929		635		1,299		-		-
Transfers into Level 3 (d) (f)			654		460		964		-		-
Transfers out of Level 3 (e) (f)			(287)		(202)		(423)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		17		(193)		253		-		-
Balance as of September 30, 2012		$	11,040	$	7,586	$	15,579	$	-	$	-

Three Months Ended September 30, 2011		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of June 30, 2011		$	5,321	$	3,150	$	6,759	$	-	$	-
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(4,553)		(2,904)		(6,138)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		(939)		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		(7)		(7)		(13)		-		-
Purchases, Issuances and Settlements (c)			358		297		599		-		-
Transfers into Level 3 (d) (f)			-		-		-		-		-
Transfers out of Level 3 (e) (f)			(259)		(154)		(330)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		(91)		112		1,103		-		-
Balance as of September 30, 2011		$	769	$	494	$	1,041	$	-	$	-

Nine Months Ended September 30, 2012		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of December 31, 2011		$	1,971	$	1,263	$	2,666	$	-	$	-
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(5,108)		(3,488)		(7,316)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		4,973		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		312		211		435		-		-
Purchases, Issuances and Settlements (c)			10,605		7,325		15,375		-		-
Transfers into Level 3 (d) (f)			4,142		2,749		5,789		-		-
Transfers out of Level 3 (e) (f)			(4,910)		(3,193)		(6,733)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		4,028		2,719		390		-		-
Balance as of September 30, 2012		$	11,040	$	7,586	$	15,579	$	-	$	-

Nine Months Ended September 30, 2011		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of December 31, 2010		$	5,131	$	3,108	$	6,583	$	1	$	2
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(2,373)		(1,401)		(3,007)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		1,947		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		(45)		(29)		(61)		-		-
Purchases, Issuances and Settlements (c)			2,835		1,656		3,567		-		-
Transfers into Level 3 (d) (f)			1,299		764		1,638		-		-
Transfers out of Level 3 (e) (f)			(3,057)		(1,834)		(3,908)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		(3,021)		(1,770)		(5,718)		(1)		(2)
Balance as of September 30, 2011		$	769	$	494	$	1,041	$	-	$	-

(a) Included in revenues on the condensed statements of income.

(b) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract.

(d) Represents existing assets or liabilities that were previously categorized as Level 2.

(e) Represents existing assets or liabilities that were previously categorized as Level 3.

(f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred.

(g) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory assets/liabilities.

Southwestern Electric Power Co [Member]

Book Values and Fair Values of Long-term Debt

	September 30, 2012				December 31, 2011
Company	Book Value		Fair Value		Book Value		Fair Value
	(in thousands)
APCo	$	3,702,283	$	4,597,740	$	3,726,251	$	4,431,912
I&M		2,109,630		2,431,912		2,057,675		2,339,344
OPCo		3,860,242		4,589,998		4,054,148		4,665,739
PSO		949,884		1,187,155		947,364		1,123,306
SWEPCo		2,046,139		2,424,311		1,728,637		2,019,094

Fair Value, Assets and Liabilities Measured on Recurring Basis

Assets and Liabilities Measured at Fair Value on a Recurring Basis
September 30, 2012
SWEPCo
		Level 1		Level 2		Level 3		Other		Total
Assets:		(in thousands)

Cash and Cash Equivalents (c)		$	14,108	$	-	$	-	$	2,518	$	16,626

Risk Management Assets
Risk Management Commodity Contracts (a) (f)			9		8,303		-		(7,472)		840
Cash Flow Hedges:
	Commodity Hedges (a)		-		55		-		(12)		43
Total Risk Management Assets			9		8,358		-		(7,484)		883

Total Assets		$	14,117	$	8,358	$	-	$	(4,966)	$	17,509

Liabilities:

Risk Management Liabilities
Risk Management Commodity Contracts (a) (f)		$	7	$	11,744	$	-	$	(7,475)	$	4,276
Cash Flow Hedges:
	Commodity Hedges (a)		-		18		-		(12)		6
Total Risk Management Liabilities		$	7	$	11,762	$	-	$	(7,487)	$	4,282

	Assets and Liabilities Measured at Fair Value on a Recurring Basis
	December 31, 2011
SWEPCo
		Level 1		Level 2		Level 3		Other		Total
Assets:		(in thousands)

Risk Management Assets
Risk Management Commodity Contracts (a) (f)		$	122	$	7,023	$	-	$	(6,421)	$	724
Cash Flow Hedges:
	Interest Rate/Foreign Currency Hedges		-		3		-		-		3
Total Risk Management Assets		$	122	$	7,026	$	-	$	(6,421)	$	727

Liabilities:

Risk Management Liabilities
Risk Management Commodity Contracts (a) (f)		$	66	$	11,753	$	-	$	(6,479)	$	5,340
Cash Flow Hedges:
	Commodity Hedges		-		97		-		-		97
	Interest Rate/Foreign Currency Hedges		-		19,143		-		-		19,143
Total Risk Management Liabilities		$	66	$	30,993	$	-	$	(6,479)	$	24,580

(c) Amounts in “Other” column primarily represent cash deposits with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds.

(d) Amounts in “Other” column primarily represent accrued interest receivables from financial institutions. Level 2 amounts primarily represent investments in money market funds.

(e) Amounts represent publicly traded equity securities and equity-based mutual funds.

(f) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo.

Changes in Fair Value of Net Trading Derivatives and Other Investments

Three Months Ended September 30, 2012		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of June 30, 2012		$	12,864	$	9,049	$	18,969	$	-	$	-
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(3,540)		(2,440)		(5,024)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		(1,030)		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		403		277		571		-		-
Purchases, Issuances and Settlements (c)			929		635		1,299		-		-
Transfers into Level 3 (d) (f)			654		460		964		-		-
Transfers out of Level 3 (e) (f)			(287)		(202)		(423)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		17		(193)		253		-		-
Balance as of September 30, 2012		$	11,040	$	7,586	$	15,579	$	-	$	-

Three Months Ended September 30, 2011		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of June 30, 2011		$	5,321	$	3,150	$	6,759	$	-	$	-
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(4,553)		(2,904)		(6,138)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		(939)		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		(7)		(7)		(13)		-		-
Purchases, Issuances and Settlements (c)			358		297		599		-		-
Transfers into Level 3 (d) (f)			-		-		-		-		-
Transfers out of Level 3 (e) (f)			(259)		(154)		(330)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		(91)		112		1,103		-		-
Balance as of September 30, 2011		$	769	$	494	$	1,041	$	-	$	-

Nine Months Ended September 30, 2012		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of December 31, 2011		$	1,971	$	1,263	$	2,666	$	-	$	-
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(5,108)		(3,488)		(7,316)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		4,973		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		312		211		435		-		-
Purchases, Issuances and Settlements (c)			10,605		7,325		15,375		-		-
Transfers into Level 3 (d) (f)			4,142		2,749		5,789		-		-
Transfers out of Level 3 (e) (f)			(4,910)		(3,193)		(6,733)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		4,028		2,719		390		-		-
Balance as of September 30, 2012		$	11,040	$	7,586	$	15,579	$	-	$	-

Nine Months Ended September 30, 2011		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of December 31, 2010		$	5,131	$	3,108	$	6,583	$	1	$	2
Realized Gain (Loss) Included in Net Income
	(or Changes in Net Assets) (a) (b)		(2,373)		(1,401)		(3,007)		-		-
Unrealized Gain (Loss) Included in Net
	Income (or Changes in Net Assets) Relating
	to Assets Still Held at the Reporting Date (a)		-		-		1,947		-		-
Realized and Unrealized Gains (Losses)
	Included in Other Comprehensive Income		(45)		(29)		(61)		-		-
Purchases, Issuances and Settlements (c)			2,835		1,656		3,567		-		-
Transfers into Level 3 (d) (f)			1,299		764		1,638		-		-
Transfers out of Level 3 (e) (f)			(3,057)		(1,834)		(3,908)		-		-
Changes in Fair Value Allocated to Regulated
	Jurisdictions (g)		(3,021)		(1,770)		(5,718)		(1)		(2)
Balance as of September 30, 2011		$	769	$	494	$	1,041	$	-	$	-

(a) Included in revenues on the condensed statements of income.

(b) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract.

(d) Represents existing assets or liabilities that were previously categorized as Level 2.

(e) Represents existing assets or liabilities that were previously categorized as Level 3.

(f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred.

(g) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory assets/liabilities.