APPALACHIAN POWER COMPANY Balance Sheets Assets & Other Debits FERC Period II - Beginning & Ending Balances 2008

APPALACHIAN POWER COMPANY Balance Sheets Assets & Other Debits FERC Period II - Beginning & Ending Balances 2008 STATEMENT AA PAGE 1 OF 4 ($000) Line No. Account 12/31/2007 12/31/2008 (a) (b) (c) 1 UTILITY PLANT 2 Utility Plant (101-106, 114) [includes EPIS Leased & associated Reserve] 7,974,614 8,589,271 3 Construction Work in Progress (107) 713,063 746,778 4 Total Utility Plant 8,687,677 9,336,050 5 (Less) Accum. Prov. for Depr., Amort., and Depl. (108, 110, 111, 115) 2,979,225 3,073,081 6 Net Utility Plant, Before Nuclear Fuel 5,708,453 6,262,969 7 Nuclear Fuel (120.1-120.4, 120.6) 0 0 8 (Less) Accum. Prov. For Amort. Of Nuclear Fuel Assem. (120.5) 0 0 9 Net Nuclear Fuel - - 10 Net Utility Plant 5,708,453 6,262,969 11 OTHER PROPERTY AND INVESTMENTS 12 Nonutility Property (121) 11,809 11,809 13 (Less) Accum. Prov. for Depr. & Amort. (122) 5,383 5,383 14 Investments in Associated Companies (123) - - 15 Investments in Subsidiary Companies (123.1) 9,251 9,251 16 Noncurrent Portion of Allowances 33,451 38,351 17 Other Investments (124) 25,340 25,340 18 Special Funds (125-129) 73,122 73,122 19 Long-Term Portion of Derivative Assets (175) 74,729 74,729 20 Long-Term Portion of Derivative Assets - Hedges (176) 225 225 21 Total Other Property and Investments 222,543 227,443 22 CURRENT AND ACCRUED ASSETS 23 Cash (131) & Working Funds (135) &TCI (136) 2,195-24 Special Deposits (132-134) 9,474 9,474 25 Notes Receivable (141) 978 978 26 Customer Accounts Receivable (142) 145,540 145,540 27 Other Accounts Receivable (143) 30,435 30,435 28 (Less) Accum. Prov. for Uncollectible Acct.-Credit (144) 13,948 13,948 29 Notes Receivable from Associated Companies (145) - - 30 Accounts Receivable from Associated Companies (146) 111,812 86,302 31 Fuel Stock (151) 79,977 79,977 32 Fuel Stock Expense Undistributed (152) 2,226 2,226 33 Residuals (Elec.) and Extracted Products (153) - - 34 Plant Material and Operating Supplies (154) 64,264 64,264 35 Merchandise (155) - - 36 Other Materials and Supplies (156) - - 37 Nuclear Materials Held for Sale (157) - - 38 Allowances (158.1 and 158.2) 45,872 45,351 39 (Less) Noncurrent Portion of Allowances 33,451 38,351 40 Stores Expense Undistributed (163) - - 41 Prepayments (165) 7,448 7,295 42 Interest and Dividends Receivable (171) - - 43 Rents Receivable (172) 1,824 1,824 44 Accrued Utility Revenues (173) 38,397 38,397 45 Miscellaneous Current and Accrued Assets (174) 800 800 46 Derivative Instrument Assets (175) 135,663 135,663 47 (Less) Long-Term Portion of Derivative Instrument Assets (175) 74,729 74,729 48 Derivative Instrument Assets - Hedges (176) 3,998 4,795 49 (Less) Long-Term Portion of Derivative Instrument Assets - Hedges (176 225 225 50 Total Current and Accrued Assets 558,551 526,069 Page 1 of 449

APPALACHIAN POWER COMPANY Balance Sheets Assets & Other Debits FERC Period II - Beginning & Ending Balances 2008 STATEMENT AA PAGE 2 OF 4 ($000) Line No. Account 12/31/2007 12/31/2008 (a) (b) (c) 51 DEFERRED DEBITS 52 Unamortized Debt Expense (181) 6,042 9,934 53 Extraordinary Property Losses (182.1) 323 323 54 Other Regulatory Assets (182.3) 653,992 730,439 55 Prelim. Survey and Investigation Charges (183) 12,730 12,730 56 Clearing Accounts/Temp Facilities (184, 185) 196 196 57 Miscellaneous Deferred Debits (186) 54,438 54,438 58 Def. Losses from Disposition of Utility Plant (187) - - 59 Research, Devel. And Demonstration Expend. (188) - - 60 Unamortized Loss on Reacquired Debt (189) 13,541 12,170 61 Accumulated Deferred Income Taxes (190) 302,178 304,171 62 Total Deferred Debits 1,043,439 1,124,401 63 Total Assets and Other Debits 7,532,985 8,140,882 Page 2 of 449

APPALACHIAN POWER COMPANY Balance Sheets Liabilities & Other Credits FERC Period II - Beginning & Ending Balances 2008 ($000) Line No. Account 12/31/2007 12/31/2008 (a) (b) (c) 1 PROPRIETARY CAPITAL 2 Common Stock Issued (201) 260,458 460,458 3 Preferred Stock Issued (204) INCLUDES AMOUNT DUE WITHIN ONE YEAR 17,752 17,752 4 Premium on Capital Stock (207) 761 761 5 Other Paid-In-Capital (208-211) 1,024,388 1,024,541 6 Installments Received on Capital Stock (212) - - 7 (Less) Discount on Capital Stock (213) - - 8 (Less) Capital Stock Expense (214) - - 9 Retained Earnings (215, 215.1, 216) 829,393 996,943 10 Unappropriated Undistr. Subsidiary Earnings (216.1) 2,218 2,218 11 Less: Reacquired Capital Stock (217) - - 12 Accumulated Other Comprehensive Income (219) (19,885) (16,831) 13 Total Proprietary Capital 2,115,086 2,485,843 14 LONG_TERM DEBT 15 Bonds (221) INCLUDES AMOUNT DUE WITHIN ONE YEAR - - 16 (Less) Reacquired Bonds (222) - - 17 Advances from Associated Companies (223) 100,000 100,000 18 Other Long-Term Debt (224) 2,764,473 3,149,668 19 Unamortized Premium on Long-Term Debt (225) - - 20 Less: Unamortized Discount on Long-Term Debt-Debit (226) 17,174 15,757 21 Total Long-Term Debt 2,847,299 3,233,911 22 OTHER NONCURRENT LIABILITIES 23 Obligations Under Capital Leases - Noncurrent (227) 6,280 6,280 24 Accumulated Provision for Property Insurance (228.1) - - 25 Accumulated Provision for Injuries and Damages (228.2) 393 393 26 Accumulated Provision for Pensions and Benefits (228.3) 65,647 65,647 27 Accumulated Miscellaneous Operating Provisions (228.4) - - 28 Accumulated Provision for Rate Refunds (229) - - 29 Long-Term Portion of Derivative Instrument Liabilities 47,281 47,281 30 Long-Term Portion of Derivative Instrument Liabilities - Hedges 135 135 29 Asset Retirement Obligations (230) 40,019 40,019 30 Total Other Non-Current Liabilities 159,755 159,755 31 CURRENT AND ACCRUED LIABILITIES 32 Notes Payable (231) - - 33 Accounts Payable (232) 241,871 237,033 34 Notes Payable Associated Companies (233) 293,455 113,560 35 Accounts Payable to Associated Companies (234) 108,886 108,886 36 Customer Deposits (235) 50,260 50,260 37 Taxes Accrued (236) 59,300 33,174 38 Interest Accrued (237) 44,053 61,183 39 Dividends Declared (238) 133 133 40 Matured Long-Term Debt (239) - - 41 Matured Interest (240) - - 42 Taxes Collections Payable (241) 4,784 4,784 43 Miscellaneous Current and Accrued Liabilities (242) 74,443 70,050 44 Obligations Under Capital Leases - Current (243) 4,821 4,821 45 Derivative Instrument Liabilities (244) 99,231 99,231 46 (Less) Long-Term Portion of Derivative Instrument Liabilities 47,281 47,281 47 Derivative Instrument Liabilities - Hedges (245) 3,140 3,140 48 (Less) Long-Term Portion of Derivative Instrument Liabilities-Hedges 135 135 49 Total Current and Accrued Liabilities 936,962 738,840 STATEMENT AA PAGE 3 OF 4 Page 3 of 449

APPALACHIAN POWER COMPANY Balance Sheets Liabilities & Other Credits FERC Period II - Beginning & Ending Balances 2008 ($000) Line No. Account 12/31/2007 12/31/2008 (a) (b) (c) STATEMENT AA PAGE 4 OF 4 50 DEFERRED CREDITS 51 Customer Advances for Construction (252) - - 52 Other Regulatory Liabilities (254) 107,937 70,026 53 Accumulated DITC (255) 19,284 15,112 54 Deferred Gains from Disposition of Utility Plant (256) - - 55 Other Deferred Credits (253) 48,131 50,526 56 Unamortized Gain on Reacquired Debt (257) - - 57 Accumulated DFIT (281-283) 1,298,531 1,386,870 58 Total Deferred Credits 1,473,884 1,522,533 59 Total Liabilitites and Other Credits 7,532,985 8,140,882 Page 4 of 449

APPALACHIAN POWER COMPANY Income Statement FERC Period II - Twelve Months Ended December 31, 2008 ($000) STATEMENT AB PAGE 1 OF 2 Line No. Account Amount (a) (b) 1 UTILITY OPERATING INCOME 2 Operating Revenues (400) 2,838,877 3 Operating Expenses: 4 Operation Expenses (401) 1,934,632 5 Maintenance Expenses (402) 195,094 6 Depreciation Expense (403.0+403.1002) 189,502 7 Depreciation Expense for Asset Retirement Costs (403.1001) - 8 Amort. & Depl. of Utility Plant (404-405) 17,570 9 Amort. of Utility Plant Acq. Adj. (406) - 10 Amort. of Property Losses (407) - 11 Amort. of Conversion Expenses (407) - 12 Regulatory Debits (407.3) 29,095 13 (Less) Regulatory Credits (407.4) - 14 Taxes Other Than Income Taxes (408.1) 93,940 15 Income Taxes - Federal (409.1) 14,728 16 - Other (409.1) 1,661 17 Provision of Deferred Inc. Taxes (410.1) 86,346 18 (Less) Provision for Deferred Income Taxes - Cr. (411.1) - 19 Investment Tax Credit Adj. - Net (411.4) (3,128) 20 (Less) Gains from Disp. of Utility Plant (411.6) - 21 Losses from Disp. of Utility Plant (411.7) - 22 (Less) Gains from Disposition of Allowances (411.8) 26,583 23 Losses from Disposition of Allowances (411.9) - 24 Accretion Expense (411.10) 2,394 25 Total Utility Operating Expenses 2,535,250 26/27 Net Utility Operating Income 303,627 28 OTHER INCOME and DEDUCTIONS 29 Other Income 30 Nonutility Operating Income 31 Revenues from Merchandising, Jobbing & Contract Work (415) - 32 (Less) Costs & Exp. of Merchandising, Jobbing & Contract Work (416) - 33 Revenues from Nonutility Operations (417) - 34 (Less) Expenses of Nonutility Operations (417.1) - 35 Nonoperating Rental Income (418) 49 36 Equity in Earnings of Subsidiary Companies (418.1) - 37 Interest and Dividend Income (419) 2,853 38 Allowance for Other Funds Used During Construction (419.1) 6,730 39 Miscellaneous Nonoperating Income (421) 32,900 40 Gain on Disposition of Property (421.1) - 41 Total Other Income 42,532 42 Other Income Deductions: 43 Loss on Disposition of Property (421.2) - 44 Miscellaneous Amortization (425) - 45-49 Miscellaneous Income Deductions (426.1-426.5) 9,670 50 Total Other Income Deductions 9,670 Page 5 of 449

APPALACHIAN POWER COMPANY Income Statement FERC Period II - Twelve Months Ended December 31, 2008 ($000) STATEMENT AB PAGE 2 OF 2 Line No. Account Amount (a) (b) OTHER INCOME and DEDUCTIONS CONTINUED: 51 Taxes Applic. to Other Income and Deductions 52 Taxes Other Than Income Taxes (408.2) - 53 Income Taxes - Federal (409.2) (13,884) 54 Income Taxes - Other (409.2) (1,562) 55 Provision for Deferred Inc. Taxes (410.2) - 56 (Less) Provision for Deferred Income Taxes - Cr. (411.2) - 57 Investment Tax Credit Adj. - Net (411.5) (1,044) 58 (Less) Investment Tax Credits (420) - 59 Total Taxes on Other Inc. and Ded. (16,490) 60 Net Other Income and Deductions 49,352 61 INTEREST CHARGES 62 Interest on Long-Term Debt (427) 179,270 63 Amort. of Debt Discount and Expense (428) 2,589 64 Amort. of Loss on Reacquired Debt (428.1) 1,371 65 (Less) Amort. of Premium on Debt - Credit (429) - 66 (Less) Amort. of Gain on Reacquired Debt -Cr. (429.1) - 67 Interest on Debt to Assoc. Companies (430) 9,063 68 Other Interest Expense (431) (1,173) 69 (Less) Allowance for Borrowed Funds Used During Construction -Cr. (432) 6,491 70 Net Interest Charges 184,628 71 Income Before Extraordinary Items 168,351 72 EXTRAORDINARY ITEMS 73 Extraordinary Income (434) - 74 (Less) Extraordinary Deductions (435) - 75 Net Extraordinary Items - 76 Income Taxes - Federal and Other (409.3) - 77 Extraordinary Items After Taxes - 78 Net Income 168,351 79 (LESS) PREFERRED DIVIDEND 800 80 Available for Common 167,550 Page 6 of 449

APPALACHIAN POWER COMPANY Statement of Retained Earnings FERC Period II - Beginning & Ending Balances 2008 ($000) STATEMENT AC PAGE 1 OF 1 Line No. Account Amount (a) (b) 1 APPROPRIATED RETAINED EARNINGS (ACCOUNT 215) 2 Balance - 12/31/07-3 Changes 4 Balance - 12/31/08-5 APPROPRIATED RET. EARN.-AMORTIZATION RESERVE, Federal (A/C215.1) 6 Balance - 12/31/07 9,190 7 Restricted Earnings-Amortization Reserve - 8 Balance - 12/31/08 9,190 9 Accounts 215, 215.1 - Balance - 12/31/08 9,190 10 UNAPPROPRIATED RETAINED EARNINGS ( Account 216) 11 Balance - 12/31/07 820,204 12 Changes 13 Adjustments to Retained earnings (Account 439): 14 Credit: 15 Credit: 16 Credit: 17 TOTAL Credits to Retained Earnings (Account 439) - 18 Debit: Amortization of Preferred Stock Redemption Premium - 19 Debit: 20 Debit: 21 TOTAL Debits to Retained Earnings (Account 439) - 22 Balance Transferred from Income ( Account 433 less Account 418.1) 168,351 23 Appropriations of Retained Earnings (Account 436): 24 Restricted Earnings-Amortization Reserve - 25 TOTAL Appropriations of Retained Earnings (Account 436) - 26 Dividends Declared - Preferred Stock (Account 437): 27 ALL SERIES (800) 28 TOTAL Dividends Declared -Preferred Stock (Account 437) (800) 29 Dividends Declared - Common Stock (Account 438): 0 30 Transfers from A/C 216.1 Unapprop. Undist. Subsidiary Earnings 31 Balance - 12/31/08 987,754 32 Accounts 215, 215.1, 216 - Balance - 12/31/08 996,943 33 UNAPPROPRIATED UNDISTRIBUTED SUBSIDIARY EARNINGS (Account 216.1) 34 Balance - 12/31/07 2,218 35 Equity Earnings in Subsidiary for the Period - CREDIT (Account 418.1) 0 36 (LESS) Dividends Recieved (DEBIT) 37 Other Changes 38 Balance - 12/31/08 2,218 Page 7 of 449

STATEMENT AD PAGE 1 OF 1 APPALACHIAN POWER COMPANY Summary of the Cost of Plant In Service FERC Period II - 13 Mo. End Balances Commencing December 31, 2007 & 13 Mo. Ave. Balance ($000) Line Intangible Production Plant Transmission Distribution General Total No. Month Plant Steam Nuclear Hydraulic Other Total Plant Plant Plant Plant (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (l) 1 December 2007 119,692 3,223,373-200,246 201,084 3,624,703 1,673,183 2,372,577 170,048 7,960,203 2 January 2008 120,671 3,240,727-200,167 201,084 3,641,978 1,676,812 2,382,732 170,103 7,992,295 3 February 2008 121,763 3,258,836-200,088 201,084 3,660,008 1,690,532 2,394,828 170,182 8,037,314 4 March 2008 122,796 3,280,067-200,009 201,084 3,681,160 1,694,058 2,406,262 170,262 8,074,538 5 April 2008 123,820 3,300,117-199,931 201,084 3,701,132 1,697,307 2,421,427 170,447 8,114,132 6 May 2008 124,847 3,299,499-199,852 201,084 3,700,436 1,717,585 2,444,663 170,654 8,158,185 7 June 2008 125,861 3,326,211-199,773 201,084 3,727,069 1,722,672 2,460,214 170,885 8,206,700 8 July 2008 126,841 3,349,818-199,695 201,084 3,750,597 1,726,479 2,475,831 171,341 8,251,089 9 August 2008 128,633 3,369,406-199,616 201,084 3,770,106 1,734,934 2,501,829 171,795 8,307,297 10 September 2008 130,379 3,388,931-199,537 201,084 3,789,552 1,738,631 2,517,556 172,037 8,348,155 11 October 2008 132,134 3,408,523-199,459 201,084 3,809,066 1,742,454 2,532,787 172,269 8,388,710 12 November 2008 133,892 3,459,560-199,380 201,084 3,860,024 1,746,283 2,547,591 172,442 8,460,232 13 December 2008 135,726 3,494,080-199,301 201,084 3,894,466 1,798,628 2,573,643 172,397 8,574,860 14 Total 13 Months 1,647,054 43,399,148-2,597,055 2,614,095 48,610,297 22,359,559 32,031,940 2,224,861 106,873,711 15 13 Mo. Ave. Balance 126,696 3,338,396-199,773 201,084 3,739,254 1,719,966 2,463,995 171,143 8,221,054 ARO Amounts in Avg. Bal. - 13,825-188 - 14,014-3 603 14,620 Page 8 of 449

STATEMENT AE PAGE 1 OF 1 APPALACHIAN POWER COMPANY Accumulated Depreciation and Amortization FERC Period II - 13 Mo. End Balances Commencing December 31, 2007 & 13 Mo. Ave. Balance ($000) Line Production Plant Transmission Distribution General Amortization Total No. Month Steam Nuclear Hydraulic Other Total Plant Plant Plant EPIS Plant (a) (b) (d) (e) (f) (g) (h) (i) (j) (k) (l) 1 December 2007 1,383,792-119,019 121,923 1,624,734 523,793 694,987 55,735 79,794 2,979,043 2 January 2008 1,387,410-119,195 122,182 1,628,786 525,156 695,866 55,732 81,169 2,986,708 3 February 2008 1,389,429-119,370 122,441 1,631,240 526,523 696,797 55,729 82,557 2,992,846 4 March 2008 1,391,369-119,545 122,699 1,633,614 527,910 697,736 55,726 83,962 2,998,947 5 April 2008 1,394,600-119,720 122,958 1,637,278 529,301 698,649 55,723 85,381 3,006,332 6 May 2008 1,398,217-119,895 123,217 1,641,330 530,693 699,567 55,721 86,814 3,014,125 7 June 2008 1,402,266-120,070 123,476 1,645,812 532,116 700,580 55,718 88,263 3,022,490 8 July 2008 1,406,415-120,245 123,734 1,650,395 533,545 701,629 55,716 89,726 3,031,010 9 August 2008 1,410,179-120,420 123,993 1,654,592 534,975 702,691 55,715 91,203 3,039,177 10 September 2008 1,413,632-120,595 124,252 1,658,479 536,422 703,884 55,714 92,705 3,047,204 11 October 2008 1,416,973-120,769 124,510 1,662,253 537,871 705,135 55,713 94,233 3,055,205 12 November 2008 1,420,859-120,944 124,769 1,666,572 539,323 706,441 55,713 95,786 3,063,835 13 December 2008 1,425,061-121,118 125,028 1,671,207 540,784 707,831 55,712 97,364 3,072,899 14 Total 13 Months 18,240,203-1,560,906 1,605,182 21,406,291 6,918,413 9,111,794 724,367 1,148,956 39,309,821 15 13 Mo. Ave. Balance 1,403,093-120,070 123,476 1,646,638 532,186 700,907 55,721 88,381 3,023,833 ARO Amounts in Avg. Bal. 8,228-35 - 8,263-1 319-8,584 Page 9 of 449

APPALACHIAN POWER COMPANY SPECIFIED DEFERRED CREDITS PERIOD ENDED DECEMBER 31, 2008 STATEMENT AF PAGE 1 OF 8 (DEBIT) CREDIT ACCOUNT 281: COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F PER BOOKS NON-APPLICABLE/NON-UTILITY AVERAGE ELECTRIC BALANCE AS BALANCE AS BALANCE AS BALANCE AS UTILITY ACCUMULATED DEFERRED FIT ITEMS OF 12-31-07 OF 12-31-08 OF 12-31-07 OF 12-31-08 (B+C+D+E)/2 1 TX AMORT POLLUTION CONT EQPT 59,591,400 77,769,400 68,680,400 2 3 4 0 5 NON-UTILITY DEFERRED FIT 0 0 6 SFAS 109 FLOW-THRU 281.3 0 0 7 SFAS 109 EXCESS DFIT 281.4 0 0 8 9 TOTAL ACCOUNT 281 59,591,400 77,769,40 68,680,400 10 11 12 ACCOUNT 282: 13 14 BOOK VS. TAX DEPRECIATION 461,148,884 508,115,884 484,632,384 15 FERC ORDER 144 CATCH UP 697,678 697,678 697,678 16 EX L/T DFIT TX RESERVE - 1986 TRA 90,627 35,627 63,127 17 CAPD INTEREST-SECTION 481(a)-CHANGE IN METHD 4,686,651 4,043,651 4,365,151 18 RELOCATION CST-SECTION 481(a)-CHANGE IN METHD 847,204 847,204 847,204 19 PJM INTEGRATION-SEC 481(a)-INTANG-DFD LABOR 463,237 463,237 463,237 20 BK PLANT IN SERVICE - SFAS 143 - ARO 3,188,515 3,188,515 3,188,515 21 DFIT GENERATION PLANT 39,629,626 37,900,626 38,765,126 22 DEFD FIT BENEFIT - PROP RETIRED 49,427,871 47,311,871 48,369,871 23 ABFUDC 1,122,249 3,283,249 2,202,749 24 ABFUDC - TRANSMISSION 1,191,815 1,191,815 1,191,815 25 ABFUDC - GENERAL 34,413 34,413 34,413 26 ABFUDC - DISTRIBUTION 1,769 1,769 1,769 27 TXS CAPD 237,863 163,863 200,863 28 PENS CAPD 79,501 45,501 62,501 29 SEC 481 PENS/OPEB ADJUSTMENT 27,332 27,332 27,332 30 SAV PLAN CAPD 61,997 44,997 53,497 31 PERCENT REPAIR ALLOWANCE 26,490,924 26,359,924 26,425,424 32 CAPITALIZED RELOCATION COSTS 1,399,904 1,563,904 1,481,904 33 EXTRAORDINARY LOSS ON DISP OF PROP 112,900 112,900 112,900 34 DEFD TAX GAIN - FIBER OPTIC LINE 1,923 1,923 1,923 35 AMORT PERPETUAL TERM ELECT PLT 137 137 137 36 GAIN ON DEFERRED DEBT 383,533 283,533 333,533 37 REMOVAL COSTS 3,139,492 3,032,492 3,085,992 38 REMOVAL COSTS REV - SFAS 143 - ARO (798,376) (798,376) (798,376) 39 TAX WRITE OFF MINE DEVEL COSTS (316,319) (316,319) (316,319) 40 BK DEPLETION -- NUEAST 312,822 312,822 312,822 41 NON-UTILITY DEFERRED FIT 0 0 42 SFAS 109 FLOW-THRU 282.3 201,702,793 201,702,793 (201,702,793) (201,702,793) 0 43 SFAS 109 EXCESS DFIT 282.4 (3,075,895) (3,075,895) 3,075,895 3,075,895 0 44 45 TOTAL ACOUNT 282 792,291,068 836,577,068 (198,626,898) (198,626,898) 615,807,172 46 47 48 ACCOUNT 283: 49 50 SV - UNDER RECOVERY FUEL COST 0 16,255,000 8,127,500 51 PROERTY TAX - NEW METHOD - BOOK 2,726,757 2,726,757 2,726,757 52 MTM BK GAIN - A/L - TAX DEFL 8,483,805 8,483,805 8,483,805 53 MARK & SPREAD-DEFL-283-A/L 13,431,871 13,431,871 13,431,871 54 ACCRUED BK PENSION EXPENSE 44,991,369 45,165,369 45,078,369 55 ACCRUED BK PENSION COSTS - SFAS 158 (24,526,292) (24,526,292) (24,526,292) 56 REG ASSET - UNREAL LOSS FWD 362,437 362,437 362,437 57 UMBRELLA TRUST - PLCY CSV EARN 1,108,100 1,108,100 1,108,100 58 DEFD RTO EXPS & CARRYING CHARGES 2,154,449 1,680,449 1,917,449 59 DEFD ENVIRON COMP COSTS & CARRYING CHARGES 20,190,601 27,743,601 23,967,101 60 DEFD SYS RELIABILITY COSTS & CARRYING CHARGES 16,702,557 21,962,557 19,332,557 61 DEFD EQUITY CARRY CHRGS-RELIABILITY CAPITAL (3,641,771) (3,641,771) (3,641,771) 62 RATE CASE DEFD CHGS 149,983 149,983 149,983 63 BOOK > TAX BASIS - EMA - A/C 283 1,793,165 (1,100,835) 346,165 64 DEFD TAX GAIN - EPA AUCTION 2,593,171 2,593,171 2,593,171 65 BK DEFL - MACSS COSTS 1,994,851 1,994,851 1,994,851 66 TRANSITION REGULATORY ASSETS 4,456,777 2,618,777 3,537,777 67 REG ASSET - SFAS 143 - ARO 6,533,037 6,533,037 6,533,037 Page 10 of 449

APPALACHIAN POWER COMPANY SPECIFIED DEFERRED CREDITS PERIOD ENDED DECEMBER 31, 2008 STATEMENT AF PAGE 2 OF 8 (DEBIT) CREDIT COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F PER BOOKS NON-APPLICABLE/NON-UTILITY AVERAGE ELECTRIC BALANCE AS BALANCE AS BALANCE AS BALANCE AS UTILITY ACCUMULATED DEFERRED FIT ITEMS OF 12-31-07 OF 12-31-08 OF 12-31-07 OF 12-31-08 (B+C+D+E)/2 68 REG ASSET - SFAS 158 - PENSIONS 24,526,292 24,526,292 24,526,292 69 REG ASSET - SFAS 158 - SERP 33,516 33,516 33,516 70 REG ASSET - SFAS 158 - OPEB 7,506,714 7,506,714 7,506,714 71 TAX DEFL - NON-DEPRECIABLES (137) (137) (137) 72 BOOK LEASES CAPITALIZED FOR TAX 428,210 428,210 428,210 73 CAPITALIZED SOFTWARE COSTS - BOOK 15,320,018 14,780,018 15,050,018 74 LOSS ON REACQUIRED DEBT 4,593,017 4,113,017 4,353,017 75 POST RETIREMENT BEN - PAYMENT 426,595 426,595 426,595 76 DEFD SFAS 106 BOOK COSTS 21,105 21,105 21,105 77 REG ASSET - ACCRUED SFAS 112 5,928,706 5,928,706 5,928,706 78 NON-UTILITY DEFERRED FIT 5,193,797 5,193,797 (5,193,797) (5,193,797) 0 79 SFAS 109 FLOW-THRU 283.3 147,601,590 147,601,590 (147,601,590) (147,601,590) 0 80 SFAS 109 EXCESS DFIT 283.4 0 0 81 ADIT FED - HEDGE-INTEREST RATE 2830015 2,982,574 2,982,574 (2,982,574) (2,982,574) 0 82 ADIT FED - HEDGE-FOREIGN EXC 2830016 34,518 34,518 (34,518) (34,518) 0 83 SFAS 133 ADIT FED - SFAS 133 NONAFFIL 2830006 1,379,119 1,379,119 (1,379,119) (1,379,119) 84 85 315,480,502 338,496,502 (157,191,598) (157,191,598) 169,796,903 86 87 88 DEFD STATE INCOME TAXES 26,269,000 29,128,000 27,698,500 89 SFAS 109 - DEFD STATE INCOME TAXES 104,899,000 104,899,000 (104,899,000) (104,899,000) 0 90 91 TOTAL ACCOUNT 283 446,648,502 472,523,502 (262,090,598) (262,090,598) 197,495,403 92 93 94 JURISDICTIONAL AMOUNTS FUNCTIONALIZED 95 96 TOTAL COMPANY AMOUNTS FUNCTIONALIZED 97 98 REFUNCTIONALIZED BASED ON JURISDICTIONAL PLANT 99 100 NOTE: POST 1970 ACCUMULATED DEFERRED 101 INV TAX CRED. (JDITC) IN A/C 255 102 SEC ALLOC - ITC - 46F1-10% 6,520,968 5,476,968 5,998,968 103 104 TOTAL ACCOUNT 255 6,520,968 5,476,968 0 0 5,998,968 Page 11 of 449

APPALACHIAN POWER COMPANY SPECIFIED DEFERRED CREDITS PERIOD ENDED DECEMBER 31, 2008 STATEMENT AF PAGE 3 OF 8 COLUMN A COLUMN G COLUMN H COLUMN I FUNCTIONALIZATION AVERAGE ACCUMULATED DEFERRED FIT ITEMS GENERATION TRANSMISSION DISTRIBUTION ACCOUNT 281: 1 TX AMORT POLLUTION CONT EQPT 2 3 4 5 NON-UTILITY DEFERRED FIT 6 SFAS 109 FLOW-THRU 281.3 7 SFAS 109 EXCESS DFIT 281.4 8 9 TOTAL ACCOUNT 281 10 11 12 ACCOUNT 282: 13 14 BOOK VS. TAX DEPRECIATION 15 FERC ORDER 144 CATCH UP 16 EX L/T DFIT TX RESERVE - 1986 TRA 17 CAPD INTEREST-SECTION 481(a)-CHANGE IN METHD 18 RELOCATION CST-SECTION 481(a)-CHANGE IN METHD 19 PJM INTEGRATION-SEC 481(a)-INTANG-DFD LABOR 20 BK PLANT IN SERVICE - SFAS 143 - ARO 21 DFIT GENERATION PLANT 22 DEFD FIT BENEFIT - PROP RETIRED 23 ABFUDC 24 ABFUDC - TRANSMISSION 25 ABFUDC - GENERAL 26 ABFUDC - DISTRIBUTION 27 TXS CAPD 28 PENS CAPD 29 SEC 481 PENS/OPEB ADJUSTMENT 30 SAV PLAN CAPD 31 PERCENT REPAIR ALLOWANCE 32 CAPITALIZED RELOCATION COSTS 33 EXTRAORDINARY LOSS ON DISP OF PROP 34 DEFD TAX GAIN - FIBER OPTIC LINE 35 AMORT PERPETUAL TERM ELECT PLT 36 GAIN ON DEFERRED DEBT 37 REMOVAL COSTS 38 REMOVAL COSTS REV - SFAS 143 - ARO 39 TAX WRITE OFF MINE DEVEL COSTS 40 BK DEPLETION -- NUEAST 41 NON-UTILITY DEFERRED FIT 42 SFAS 109 FLOW-THRU 282.3 43 SFAS 109 EXCESS DFIT 282.4 44 45 TOTAL ACOUNT 282 46 47 48 ACCOUNT 283: 49 50 SV - UNDER RECOVERY FUEL COST 51 PROERTY TAX - NEW METHOD - BOOK 52 MTM BK GAIN - A/L - TAX DEFL 53 MARK & SPREAD-DEFL-283-A/L 54 ACCRUED BK PENSION EXPENSE 55 ACCRUED BK PENSION COSTS - SFAS 158 56 REG ASSET - UNREAL LOSS FWD 57 UMBRELLA TRUST - PLCY CSV EARN 58 DEFD RTO EXPS & CARRYING CHARGES 59 DEFD ENVIRON COMP COSTS & CARRYING CHARGES 60 DEFD SYS RELIABILITY COSTS & CARRYING CHARGES 61 DEFD EQUITY CARRY CHRGS-RELIABILITY CAPITAL 62 RATE CASE DEFD CHGS 63 BOOK > TAX BASIS - EMA - A/C 283 64 DEFD TAX GAIN - EPA AUCTION 65 BK DEFL - MACSS COSTS 66 TRANSITION REGULATORY ASSETS 67 REG ASSET - SFAS 143 - ARO 68,680,40 68,680,40 116,453,176 152,038,154 216,141,054 0 260,649 437,029 0 16,930 46,197 1,366,225 1,842,158 1,156,768 0 0 847,204 0 463,237 0 2,681,002 0 507,512 38,765,126 0 0 9,762,838 6,771,875 31,835,158 1,926,485 194,673 81,591 0 1,191,815 0 0 12,533 21,880 0 0 1,769 0 74,867 125,996 0 23,200 39,301 (25,659) 19,631 33,361 0 20,168 33,329 17,449,457 3,531,833 5,444,133 0 393,659 1,088,245 0 0 112,900 0 1,923 0 137 0 0 0 124,786 208,747 3,085,992 0 0 (798,376) 0 0 (316,319) 0 0 312,822 0 0 190,662,906 166,982,090 258,162,174 8,127,50 247,340 886,764 1,592,654 8,483,805 0 0 13,431,871 0 0 15,929,715 2,528,241 26,620,413 (8,452,213) (1,078,025) (14,996,054) 362,437 0 0 0 0 1,108,100 0 1,917,449 0 23,967,101 0 0 0 6,747,101 12,585,456 0 (2,132,681) (1,509,090) 62,370 28,863 58,750 346,165 0 0 2,593,171 0 0 0 0 1,994,851 0 0 3,537,777 6,533,037 0 0 Page 12 of 449

APPALACHIAN POWER COMPANY SPECIFIED DEFERRED CREDITS PERIOD ENDED DECEMBER 31, 2008 STATEMENT AF PAGE 4 OF 8 COLUMN A COLUMN G COLUMN H COLUMN I FUNCTIONALIZATION AVERAGE ACCUMULATED DEFERRED FIT ITEMS 68 REG ASSET - SFAS 158 - PENSIONS 69 REG ASSET - SFAS 158 - SERP 70 REG ASSET - SFAS 158 - OPEB 71 TAX DEFL - NON-DEPRECIABLES 72 BOOK LEASES CAPITALIZED FOR TAX 73 CAPITALIZED SOFTWARE COSTS - BOOK 74 LOSS ON REACQUIRED DEBT 75 POST RETIREMENT BEN - PAYMENT 76 DEFD SFAS 106 BOOK COSTS 77 REG ASSET - ACCRUED SFAS 112 78 NON-UTILITY DEFERRED FIT 79 SFAS 109 FLOW-THRU 283.3 80 SFAS 109 EXCESS DFIT 283.4 81 ADIT FED - HEDGE-INTEREST RATE 2830015 82 ADIT FED - HEDGE-FOREIGN EXC 2830016 83 SFAS 133 ADIT FED - SFAS 133 NONAFFIL 2830006 84 85 86 87 88 DEFD STATE INCOME TAXES 89 SFAS 109 - DEFD STATE INCOME TAXES 90 91 TOTAL ACCOUNT 283 92 93 94 JURISDICTIONAL AMOUNTS FUNCTIONALIZED 95 96 TOTAL COMPANY AMOUNTS FUNCTIONALIZED 97 98 REFUNCTIONALIZED BASED ON JURISDICTIONAL PLANT 99 100 NOTE: POST 1970 ACCUMULATED DEFERRED 101 INV TAX CRED. (JDITC) IN A/C 255 102 SEC ALLOC - ITC - 46F1-10% 103 104 TOTAL ACCOUNT 255 GENERATION TRANSMISSION DISTRIBUTION 8,452,213 1,078,025 14,996,054 (117) 0 33,633 2,837,153 507,521 4,162,040 137 0 (274) 42,000 9,014 377,197 6,686,693 1,459,782 6,903,543 1,423,665 (221,606) 3,150,958 0 61,198 365,397 0 2,979 18,126 2,838,223 656,590 2,433,892 93,912,266 12,451,217 63,433,421 8,878,500 8,283,000 10,537,000 102,790,766 20,734,217 73,970,421 0 2,890,053 3,108,915 0 2,890,053 3,108,915 Page 13 of 449

APPALACHIAN POWER COMPANY SPECIFIED DEFERRED CREDITS PERIOD ENDED DECEMBER 31, 2008 STATEMENT AF PAGE 5 OF 8 COLUMN A COLUMN J COLUMN K COLUMN L FUNCTIONALIZATION 12/31/07 ACCUMULATED DEFERRED FIT ITEMS GENERATION TRANSMISSION DISTRIBUTION ACCOUNT 281: 1 TX AMORT POLLUTION CONT EQPT 2 3 4 5 NON-UTILITY DEFERRED FIT 6 SFAS 109 FLOW-THRU 281.3 7 SFAS 109 EXCESS DFIT 281.4 8 9 TOTAL ACCOUNT 281 10 11 12 ACCOUNT 282: 13 14 BOOK VS. TAX DEPRECIATION 15 FERC ORDER 144 CATCH UP 16 EX L/T DFIT TX RESERVE - 1986 TRA 17 CAPD INTEREST-SECTION 481(a)-CHANGE IN METHD 18 RELOCATION CST-SECTION 481(a)-CHANGE IN METHD 19 PJM INTEGRATION-SEC 481(a)-INTANG-DFD LABOR 20 BK PLANT IN SERVICE - SFAS 143 - ARO 21 DFIT GENERATION PLANT 22 DEFD FIT BENEFIT - PROP RETIRED 23 ABFUDC 24 ABFUDC - TRANSMISSION 25 ABFUDC - GENERAL 26 ABFUDC - DISTRIBUTION 27 TXS CAPD 28 PENS CAPD 29 SEC 481 PENS/OPEB ADJUSTMENT 30 SAV PLAN CAPD 31 PERCENT REPAIR ALLOWANCE 32 CAPITALIZED RELOCATION COSTS 33 EXTRAORDINARY LOSS ON DISP OF PROP 34 DEFD TAX GAIN - FIBER OPTIC LINE 35 AMORT PERPETUAL TERM ELECT PLT 36 GAIN ON DEFERRED DEBT 37 REMOVAL COSTS 38 REMOVAL COSTS REV - SFAS 143 - ARO 39 TAX WRITE OFF MINE DEVEL COSTS 40 BK DEPLETION -- NUEAST 41 NON-UTILITY DEFERRED FIT 42 SFAS 109 FLOW-THRU 282.3 43 SFAS 109 EXCESS DFIT 282.4 44 45 TOTAL ACOUNT 282 46 47 48 ACCOUNT 283: 49 50 SV - UNDER RECOVERY FUEL COST 51 PROERTY TAX - NEW METHOD - BOOK 52 MTM BK GAIN - A/L - TAX DEFL 53 MARK & SPREAD-DEFL-283-A/L 54 ACCRUED BK PENSION EXPENSE 55 ACCRUED BK PENSION COSTS - SFAS 158 56 REG ASSET - UNREAL LOSS FWD 57 UMBRELLA TRUST - PLCY CSV EARN 58 DEFD RTO EXPS & CARRYING CHARGES 59 DEFD ENVIRON COMP COSTS & CARRYING CHARGES 60 DEFD SYS RELIABILITY COSTS & CARRYING CHARGES 61 DEFD EQUITY CARRY CHRGS-RELIABILITY CAPITAL 62 RATE CASE DEFD CHGS 63 BOOK > TAX BASIS - EMA - A/C 283 64 DEFD TAX GAIN - EPA AUCTION 65 BK DEFL - MACSS COSTS 66 TRANSITION REGULATORY ASSETS 67 REG ASSET - SFAS 143 - ARO 59,591,40 59,591,40 106,366,176 144,700,654 210,082,054 0 260,649 437,029 0 33,930 56,697 1,466,725 1,978,158 1,241,768 0 0 847,204 0 463,237 0 2,681,002 0 507,512 39,629,626 0 0 9,907,338 6,937,875 32,582,658 1,086,985 13,173 22,091 0 1,191,815 0 0 12,533 21,880 0 0 1,769 0 88,867 148,996 0 29,700 49,801 (25,659) 19,631 33,361 0 23,168 38,829 17,210,957 3,709,333 5,570,633 0 324,159 1,075,745 0 0 112,900 0 1,923 0 137 0 0 0 143,286 240,247 3,139,492 0 0 (798,376) 0 0 (316,319) 0 0 312,822 0 0 180,660,906 159,932,090 253,071,174 247,340 886,764 1,592,654 8,483,805 0 0 13,431,871 0 0 15,867,715 2,516,741 26,606,913 (8,452,213) (1,078,025) (14,996,054) 362,437 0 0 0 0 1,108,100 0 2,154,449 0 20,190,601 0 0 0 6,733,101 9,969,456 0 (2,132,681) (1,509,090) 62,370 28,863 58,750 1,793,165 0 0 2,593,171 0 0 0 0 1,994,851 0 0 4,456,777 6,533,037 0 0 Page 14 of 449

APPALACHIAN POWER COMPANY SPECIFIED DEFERRED CREDITS PERIOD ENDED DECEMBER 31, 2008 STATEMENT AF PAGE 6 OF 8 COLUMN A COLUMN J COLUMN K COLUMN L FUNCTIONALIZATION 12/31/07 ACCUMULATED DEFERRED FIT ITEMS 68 REG ASSET - SFAS 158 - PENSIONS 69 REG ASSET - SFAS 158 - SERP 70 REG ASSET - SFAS 158 - OPEB 71 TAX DEFL - NON-DEPRECIABLES 72 BOOK LEASES CAPITALIZED FOR TAX 73 CAPITALIZED SOFTWARE COSTS - BOOK 74 LOSS ON REACQUIRED DEBT 75 POST RETIREMENT BEN - PAYMENT 76 DEFD SFAS 106 BOOK COSTS 77 REG ASSET - ACCRUED SFAS 112 78 NON-UTILITY DEFERRED FIT 79 SFAS 109 FLOW-THRU 283.3 80 SFAS 109 EXCESS DFIT 283.4 81 ADIT FED - HEDGE-INTEREST RATE 2830015 82 ADIT FED - HEDGE-FOREIGN EXC 2830016 83 SFAS 133 ADIT FED - SFAS 133 NONAFFIL 2830006 84 85 86 87 88 DEFD STATE INCOME TAXES 89 SFAS 109 - DEFD STATE INCOME TAXES 90 91 TOTAL ACCOUNT 283 92 93 94 JURISDICTIONAL AMOUNTS FUNCTIONALIZED 95 96 TOTAL COMPANY AMOUNTS FUNCTIONALIZED 97 98 REFUNCTIONALIZED BASED ON JURISDICTIONAL PLANT 99 100 NOTE: POST 1970 ACCUMULATED DEFERRED 101 INV TAX CRED. (JDITC) IN A/C 255 102 SEC ALLOC - ITC - 46F1-10% 103 104 TOTAL ACCOUNT 255 GENERATION TRANSMISSION DISTRIBUTION 8,452,213 1,078,025 14,996,054 (117) 0 33,633 2,837,153 507,521 4,162,040 137 0 (274) 42,000 9,014 377,197 6,806,693 1,486,282 7,027,043 1,485,665 (161,106) 3,268,458 0 61,198 365,397 0 2,979 18,126 2,838,223 656,590 2,433,892 83,575,266 12,749,717 61,963,921 8,341,000 7,828,000 10,100,000 91,916,266 20,577,717 72,063,921 0 3,151,553 3,369,415 0 3,151,553 3,369,415 Page 15 of 449

APPALACHIAN POWER COMPANY SPECIFIED DEFERRED CREDITS PERIOD ENDED DECEMBER 31, 2008 STATEMENT AF PAGE 7 OF 8 COLUMN A COLUMN M COLUMN N COLUMN O FUNCTIONALIZATION 12/31/08 ACCUMULATED DEFERRED FIT ITEMS GENERATION TRANSMISSION DISTRIBUTION ACCOUNT 281: 1 TX AMORT POLLUTION CONT EQPT 2 3 4 5 NON-UTILITY DEFERRED FIT 6 SFAS 109 FLOW-THRU 281.3 7 SFAS 109 EXCESS DFIT 281.4 8 9 TOTAL ACCOUNT 281 10 11 12 ACCOUNT 282: 13 14 BOOK VS. TAX DEPRECIATION 15 FERC ORDER 144 CATCH UP 16 EX L/T DFIT TX RESERVE - 1986 TRA 17 CAPD INTEREST-SECTION 481(a)-CHANGE IN METHD 18 RELOCATION CST-SECTION 481(a)-CHANGE IN METHD 19 PJM INTEGRATION-SEC 481(a)-INTANG-DFD LABOR 20 BK PLANT IN SERVICE - SFAS 143 - ARO 21 DFIT GENERATION PLANT 22 DEFD FIT BENEFIT - PROP RETIRED 23 ABFUDC 24 ABFUDC - TRANSMISSION 25 ABFUDC - GENERAL 26 ABFUDC - DISTRIBUTION 27 TXS CAPD 28 PENS CAPD 29 SEC 481 PENS/OPEB ADJUSTMENT 30 SAV PLAN CAPD 31 PERCENT REPAIR ALLOWANCE 32 CAPITALIZED RELOCATION COSTS 33 EXTRAORDINARY LOSS ON DISP OF PROP 34 DEFD TAX GAIN - FIBER OPTIC LINE 35 AMORT PERPETUAL TERM ELECT PLT 36 GAIN ON DEFERRED DEBT 37 REMOVAL COSTS 38 REMOVAL COSTS REV - SFAS 143 - ARO 39 TAX WRITE OFF MINE DEVEL COSTS 40 BK DEPLETION -- NUEAST 41 NON-UTILITY DEFERRED FIT 42 SFAS 109 FLOW-THRU 282.3 43 SFAS 109 EXCESS DFIT 282.4 44 45 TOTAL ACOUNT 282 46 47 48 ACCOUNT 283: 49 50 SV - UNDER RECOVERY FUEL COST 51 PROERTY TAX - NEW METHOD - BOOK 52 MTM BK GAIN - A/L - TAX DEFL 53 MARK & SPREAD-DEFL-283-A/L 54 ACCRUED BK PENSION EXPENSE 55 ACCRUED BK PENSION COSTS - SFAS 158 56 REG ASSET - UNREAL LOSS FWD 57 UMBRELLA TRUST - PLCY CSV EARN 58 DEFD RTO EXPS & CARRYING CHARGES 59 DEFD ENVIRON COMP COSTS & CARRYING CHARGES 60 DEFD SYS RELIABILITY COSTS & CARRYING CHARGES 61 DEFD EQUITY CARRY CHRGS-RELIABILITY CAPITAL 62 RATE CASE DEFD CHGS 63 BOOK > TAX BASIS - EMA - A/C 283 64 DEFD TAX GAIN - EPA AUCTION 65 BK DEFL - MACSS COSTS 66 TRANSITION REGULATORY ASSETS 67 REG ASSET - SFAS 143 - ARO 77,769,40 77,769,40 126,540,176 159,375,654 222,200,054 0 260,649 437,029 0 (70) 35,697 1,265,725 1,706,158 1,071,768 0 0 847,204 0 463,237 0 2,681,002 0 507,512 37,900,626 0 0 9,618,338 6,605,875 31,087,658 2,765,985 376,173 141,091 0 1,191,815 0 0 12,533 21,880 0 0 1,769 0 60,867 102,996 0 16,700 28,801 (25,659) 19,631 33,361 0 17,168 27,829 17,687,957 3,354,333 5,317,633 0 463,159 1,100,745 0 0 112,900 0 1,923 0 137 0 0 0 106,286 177,247 3,032,492 0 0 (798,376) 0 0 (316,319) 0 0 312,822 0 0 200,664,906 174,032,090 263,253,174 16,255,00 247,340 886,764 1,592,654 8,483,805 0 0 13,431,871 0 0 15,991,715 2,539,741 26,633,913 (8,452,213) (1,078,025) (14,996,054) 362,437 0 0 0 0 1,108,100 0 1,680,449 0 27,743,601 0 0 0 6,761,101 15,201,456 0 (2,132,681) (1,509,090) 62,370 28,863 58,750 (1,100,835) 0 0 2,593,171 0 0 0 0 1,994,851 0 0 2,618,777 6,533,037 0 0 Page 16 of 449

APPALACHIAN POWER COMPANY SPECIFIED DEFERRED CREDITS PERIOD ENDED DECEMBER 31, 2008 STATEMENT AF PAGE 8 OF 8 COLUMN A COLUMN M COLUMN N COLUMN O FUNCTIONALIZATION 12/31/08 ACCUMULATED DEFERRED FIT ITEMS 68 REG ASSET - SFAS 158 - PENSIONS 69 REG ASSET - SFAS 158 - SERP 70 REG ASSET - SFAS 158 - OPEB 71 TAX DEFL - NON-DEPRECIABLES 72 BOOK LEASES CAPITALIZED FOR TAX 73 CAPITALIZED SOFTWARE COSTS - BOOK 74 LOSS ON REACQUIRED DEBT 75 POST RETIREMENT BEN - PAYMENT 76 DEFD SFAS 106 BOOK COSTS 77 REG ASSET - ACCRUED SFAS 112 78 NON-UTILITY DEFERRED FIT 79 SFAS 109 FLOW-THRU 283.3 80 SFAS 109 EXCESS DFIT 283.4 81 ADIT FED - HEDGE-INTEREST RATE 2830015 82 ADIT FED - HEDGE-FOREIGN EXC 2830016 83 SFAS 133 ADIT FED - SFAS 133 NONAFFIL 2830006 84 85 86 87 88 DEFD STATE INCOME TAXES 89 SFAS 109 - DEFD STATE INCOME TAXES 90 91 TOTAL ACCOUNT 283 92 93 94 JURISDICTIONAL AMOUNTS FUNCTIONALIZED 95 96 TOTAL COMPANY AMOUNTS FUNCTIONALIZED 97 98 REFUNCTIONALIZED BASED ON JURISDICTIONAL PLANT 99 100 NOTE: POST 1970 ACCUMULATED DEFERRED 101 INV TAX CRED. (JDITC) IN A/C 255 102 SEC ALLOC - ITC - 46F1-10% 103 104 TOTAL ACCOUNT 255 GENERATION TRANSMISSION DISTRIBUTION 8,452,213 1,078,025 14,996,054 (117) 0 33,633 2,837,153 507,521 4,162,040 137 0 (274) 42,000 9,014 377,197 6,566,693 1,433,282 6,780,043 1,361,665 (282,106) 3,033,458 0 61,198 365,397 0 2,979 18,126 2,838,223 656,590 2,433,892 104,249,266 12,152,717 64,902,921 9,416,000 8,738,000 10,974,000 113,665,266 20,890,717 75,876,921 0 2,628,553 2,848,415 0 2,628,553 2,848,415 Page 17 of 449

APPALACHIAN POWER COMPANY Specified Plant Accounts (Other Than Plant In Service) and Deferred Debits FERC PERIOD II - Average of the Beginning and Ending Balances ($000) STATEMENT AG PAGE 1 OF 1 Line Average No. Description Balance (a) (b) 1 LAND, LAND RIGHTS and STRUCTURES and IMPROVEMENTS in ACCOUNT 105 (1 2 Production 1,085 3 Transmission 1,897 4 Distribution 110 5 General & Intangible 35 6 TOTAL Ave. Land and Land Rights Balances for Electric Plant Held for Future Use 3,128 7 OTHER (2): 8 Extraordinary Property Losses (182.1) 323 9 TOTAL Ave. Other Balances 323 10 ACCUMULATED DEFERRED INCOME TAXES ACCOUNT 190 (3) (4): 11 TOTAL Ave. Accumulated Deferred Income Tax Balances Account 190 235,055 (1) REFER TO STATEMENT AG-1 (2) REFER TO STATEMENT AG-2 (3) REFER TO STATEMENT AG-3 (4) REFER TO STATEMENT BK FOR FUNCTIONALIZATION AMOUNTS. Page 18 of 449

APPALACHIAN POWER COMPANY Electric Plant Held for Future Use - A\C 105 FERC PERIOD II - Average of the Beginning and Ending Balances ($000) STATEMENT AG-1 PAGE 1 OF 1 Line Average No. Description 12/31/2007 12/31/2008 Balance (a) (b) (c) (d) 1 Production: 2 Land 1,085 1,085 1,085 3 Land Rights - - - 4 Structures and Improvements - - - 5 Total Production 1,085 1,085 1,085 6 Transmission: 7 Land 615 615 615 8 Land Rights 1,127 1,127 1,127 9 Structures and Improvements 155 155 155 10 Total Transmission 1,897 1,897 1,897 11 Distribution: 12 Land 110 110 110 13 Land Rights - - - 14 Structures and Improvements - - - 15 Total Distribution 110 110 110 16 General & Intangible: 17 Land 32 32 32 18 Land Rights 4 4 4 19 Structures and Improvements - - - 20 Total General & Intangible 35 35 35 21 Electric Plant Held for Future Use: 22 Land 1,843 1,843 1,843 23 Land Rights 1,131 1,131 1,131 24 Structures and Improvements 155 155 155 25 Total Elect. Plant Held for Future Use 3,128 3,128 3,128 Page 19 of 449

APPALACHIAN POWER COMPANY Deferred Debits FERC PERIOD II - Average of the Beginning and Ending Balances ($000) STATEMENT AG-2 PAGE 1 OF 1 Line Average No. Description 12/31/2007 12/31/2008 Balance (a) (b) (c) (d) 1 Extraordinary Property Losses (182.1) 323 323 323 2 TOTAL 323 323 323 Page 20 of 449

APPALACHIAN POWER COMPANY ACCUMULATED DEFERRED INCOME TAX IN ACCOUNT 190 PERIOD ENDED DECEMBER 31, 2008 STATEMENT AG-3 PAGE 1 OF 8 DEBIT (CREDIT) COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F PER BOOKS NON-APPLICABLE/NON-UTILITY AVERAGE ELECTRIC BALANCE AS BALANCE AS BALANCE AS BALANCE AS UTILITY ACCUMULATED DEFERRED FIT ITEMS OF 12-31-07 OF 12-31-08 OF 12-31-07 OF 12-31-08 (B+C+D+E)/2 ACCOUNT 190: 1 BOOK VS. TAX DEPRECIATION 20,489 20,489 20,489 2 INT EXP CAPITALIZED FOR TAX 40,490,176 51,524,176 46,007,176 3 CIAC-BOOK RECEIPTS - DISTR - SV 9,399,778 10,362,778 9,881,278 4 CIAC-BOOK RECEIPTS - TRANS 1,253,569 1,253,569 1,253,569 5 CIAC-BOOK RECEIPTS - DISTR - SW 3,348,817 4,296,817 3,822,817 6 CIAC - MUSSER ACQUISTION 343,638 343,638 343,638 7 CUST ADV INC FOR TA- SV 579 579 579 8 SW - OVER RECOVERY FUEL COSTS 11,711,658 (18,379,342) (3,333,842) 9 SV - OVER RECOVERY FUEL COSTS 3,847,075 20,669,075 12,258,075 10 PROVS POSS REV REFDS 3,750,471 3,750,471 3,750,471 11 SALE/LEASE BK RKE SERV CTR 10 10 10 12 LOSS ON DISP OF PROP - SFAS 143 - ARO - BK (0) (0) 0 13 SALE/LEASE - GRUNDY 5,306 5,306 5,306 14 MTM BK LOSS - A/L - TAX DEFL (82,853) (82,853) (82,853) 15 MARK & SPREAD-DEFL-190-A/L 4,800,980 4,800,980 4,800,980 16 PROV WORKERS COMP 62,829 62,829 62,829 17 ACCRUED BK SUP SAVINGS PLAN EXP (0) (0) 0 18 SUPPLEMENTAL EXECUTIVE RETIRE PLAN (135,004) (135,004) (135,004) 19 ACCD SUP EXEC RETIR PLAN COSTS-SFAS 158 33,516 33,516 33,516 20 ACCRD BK SUP. SAVINGS PLAN EXP 103,229 103,229 103,229 21 EMPLOYER SAVINGS PLAN MATCH (0) (0) 0 22 ACCRUED PSI PLAN EXP 307,946 307,946 307,946 23 BK PROV UNCOLL ACCTS 4,328,608 4,328,608 4,328,608 24 PROV - TRADING CREDIT RISK - A/L 289,008 289,008 289,008 25 DEFD COMPENASTION - BOOK EXPENSE 4,986 4,986 4,986 26 ACCRD COMPANYWIDE INCENTV PLAN (208,751) (208,751) (208,751) 27 ACCRUED BOOK VACATION PAY 3,749,258 3,749,258 3,749,258 28 ACCRUED MGMT INCENTIVE BONUS (124,609) (124,609) (124,609) 29 ACCRD BK SEI EMP BENEFIT COSTS (0) (0) 0 30 ACCRUED BK SEVERANCE BENEFITS (0) (0) 0 31 ACCRUED INTEREST EXPENSE - STATE 1,017,969 1,017,969 1,017,969 32 ACCRUED INTEREST-LONG-TERM - FIN 48 1,113,238 (1,003,762) 54,738 33 ACCRUED INTEREST-SHORT-TERM - FIN 48 (792,051) (792,051) (792,051) 34 ACCRUED STATE INCOME TAX EXPENSE 1,117,196 1,117,196 1,117,196 35 BK DFL RAIL TRANS REV/EXP (177,579) (177,579) (177,579) 36 ACCRUED RTO CARRYING CHARGES 2 2 2 37 DEFERRED RTO EXPENSES & CARRYING CHAR 38 DEFD EQUITY CARRYING CHRGS-ENVIRON COMP COS (0) (0) 0 39 FEDERAL MITIGATION PROGRAMS 4,178,160 5,571,160 4,874,660 40 STATE MITIGATION PROGRAMS 2,785,440 2,785,440 2,785,440 41 DEFD BK CONTRACT REVENUE 943,884 943,884 943,884 42 DEFD STORM DAMAGES 4 4 4 Page 21 of 449

APPALACHIAN POWER COMPANY ACCUMULATED DEFERRED INCOME TAX IN ACCOUNT 190 PERIOD ENDED DECEMBER 31, 2008 STATEMENT AG-3 PAGE 2 OF 8 DEBIT (CREDIT) COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F PER BOOKS NON-APPLICABLE/NON-UTILITY AVERAGE ELECTRIC BALANCE AS BALANCE AS BALANCE AS BALANCE AS UTILITY ACCUMULATED DEFERRED FIT ITEMS OF 12-31-07 OF 12-31-08 OF 12-31-07 OF 12-31-08 (B+C+D+E)/2 43 FK BK WRITE-OFF BLUE RIDGE EASE 13,422 13,422 13,422 44 FR BK WRITE-OFF BLUE RIDGE EASE 15,660 15,660 15,660 45 SV BK WRITE-OFF BLUE RIDGE EASE 99,325 99,325 99,325 46 CV BK WRITE-OFF BLUE RIDGE EASE 6,218 6,218 6,218 47 DEFD TX LOSS-INTERCO SALE-EMA 26,110 26,110 26,110 48 DEFD BOOK GAIN - EPA AUCTION 49 PREPD ROYALTIES BK DEFR 50 ADVANCE RENTAL INC (CUR MO) 512,917 512,917 512,917 51 DEFERRED BOOK RENTS 966,788 966,788 966,788 52 REG - LIAB - UNREAL MTM GAIN - DEFL 7,043,535 7,043,535 7,043,535 53 REG ASSET/LIAB-CENTURY ALUMINUM 368,762 368,762 368,762 54 WVA RATE STABILIZATION LIAB 55 CAPITALIZED SOFTWARE COSTS - TAX 4,092 4,092 4,092 56 CAPITALIZED ADVERTISING EXP - TAX 1,562,326 1,562,326 1,562,326 57 BK DEFL - GAIN REACQUIRED DEBT (7) (7) (7) 58 ACCRD SFAS 106 PST RETIRE EXP 15,543,177 17,470,177 16,506,677 59 SFAS 106 PST RETIRE EXP - NON-DEDUCT CONT 4,854,690 4,854,690 4,854,690 60 ACCRD OPEB COSTS - SFAS 158 7,506,714 7,506,714 7,506,714 61 ACCRD SFAS 112 EMPLOY BEN 5,956,574 5,956,574 5,956,574 62 ACCRD BOOK ARO EXPENSE-SFAS 143 13,625,681 14,463,681 14,044,681 63 ACCRUED BK REMOVAL COST - ACRS 45,395,202 44,670,202 45,032,702 64 DEFD STATE INCOME TAXES 8,568,257 9,569,257 9,068,757 65 ACCRD SIT/FRANCHISE TAX RESERVE 638,590 638,590 638,590 66 ACCRUED SALES & USE TAX RESERVE 117,600 117,600 117,600 67 ACCRD SIT TX RES-LNG-TERM-FIN 48 2,236,872 2,236,872 2,236,872 68 SFAS 109 - DEFD SIT LIABILITY 69 1977-1980 IRS AUDIT SETTLEMENT 2 2 2 70 1985-1987 IRS AUDIT SETTLEMENT 1,205,918 1,205,918 1,205,918 71 1988-1990 IRS AUDIT SETTLEMENT 604,135 604,135 604,135 72 1991-1996 IRS AUDIT SETTLEMENT (2,289,546) (2,289,546) (2,289,546) 73 1994-1996 IRS AUDIT SETTLEMENT 36,165 36,165 36,165 74 1997-2003 IRS AUDIT SETTLEMENT 2,202,887 2,202,887 2,202,887 75 DEFD FIT - CAPITAL LOSS CARRYBACK (0) (0) 0 76 0 77 0 78 NON-UTILITY DEFERRED FIT 1,471,365 1,471,365 (1,471,365) (1,471,365) 0 79 SFAS 109 FLOW-THRU 190.3 48,891,300 48,891,300 (48,891,300) (48,891,300) 0 80 SFAS 109 EXCESS DFIT 190.4 1,656,251 1,656,251 (1,656,251) (1,656,251) 0 81 SFAS 133 ADIT FED - SFAS NONAFFIL 1900006 956,601 956,601 (956,601) (956,601) 0 82 ADIT FED - PENSION OCI NAF 1900009 7,506,715 7,506,715 (7,506,715) (7,506,715) 0 83 ADIT FED - HEDGE-INTEREST RATE 1900015 6,537,629 6,537,629 (6,537,629) (6,537,629) 0 84 ADIT FED - HEDGE-FOREIGN EXC 1900016 102,508 102,508 (102,508) (102,508) 0 85 DEFERRED SIT 1901002 20,746,296 20,746,296 20,746,296 86 87 TOTAL ACCOUNT 190 302,177,702 304,170,702 (67,122,370) (67,122,370) 236,051,834 Page 22 of 449

APPALACHIAN POWER COMPANY ACCUMULATED DEFERRED INCOME TAX IN ACCOUNT PERIOD ENDED DECEMBER 31, 2008 STATEMENT AG-3 PAGE 3 OF 8 COLUMN A COLUMN G COLUMN H COLUMN I FUNCTIONALIZATION AVERAGE ACCUMULATED DEFERRED FIT ITEMS ACCOUNT 190: 1 BOOK VS. TAX DEPRECIATION 2 INT EXP CAPITALIZED FOR TAX 3 CIAC-BOOK RECEIPTS - DISTR - SV 4 CIAC-BOOK RECEIPTS - TRANS 5 CIAC-BOOK RECEIPTS - DISTR - SW 6 CIAC - MUSSER ACQUISTION 7 CUST ADV INC FOR TA- SV 8 SW - OVER RECOVERY FUEL COSTS 9 SV - OVER RECOVERY FUEL COSTS 10 PROVS POSS REV REFDS 11 SALE/LEASE BK RKE SERV CTR 12 LOSS ON DISP OF PROP - SFAS 143 - ARO - BK 13 SALE/LEASE - GRUNDY 14 MTM BK LOSS - A/L - TAX DEFL 15 MARK & SPREAD-DEFL-190-A/L 16 PROV WORKERS COMP 17 ACCRUED BK SUP SAVINGS PLAN EXP 18 SUPPLEMENTAL EXECUTIVE RETIRE PLAN 19 ACCD SUP EXEC RETIR PLAN COSTS-SFAS 158 20 ACCRD BK SUP. SAVINGS PLAN EXP 21 EMPLOYER SAVINGS PLAN MATCH 22 ACCRUED PSI PLAN EXP 23 BK PROV UNCOLL ACCTS 24 PROV - TRADING CREDIT RISK - A/L 25 DEFD COMPENASTION - BOOK EXPENSE 26 ACCRD COMPANYWIDE INCENTV PLAN 27 ACCRUED BOOK VACATION PAY 28 ACCRUED MGMT INCENTIVE BONUS 29 ACCRD BK SEI EMP BENEFIT COSTS 30 ACCRUED BK SEVERANCE BENEFITS 31 ACCRUED INTEREST EXPENSE - STATE 32 ACCRUED INTEREST-LONG-TERM - FIN 48 33 ACCRUED INTEREST-SHORT-TERM - FIN 48 34 ACCRUED STATE INCOME TAX EXPENSE 35 BK DFL RAIL TRANS REV/EXP 36 ACCRUED RTO CARRYING CHARGES 37 DEFERRED RTO EXPENSES & CARRYING CHAR 38 DEFD EQUITY CARRYING CHRGS-ENVIRON COMP COS 39 FEDERAL MITIGATION PROGRAMS 40 STATE MITIGATION PROGRAMS 41 DEFD BK CONTRACT REVENUE 42 DEFD STORM DAMAGES GENERATION TRANSMISSION DISTRIBUTION 0 20,489 0 30,200,195 10,884,127 4,922,854 0 64,604 9,816,675 0 1,253,569 0 0 19,077 3,803,740 0 0 343,638 0 0 579 (3,333,842) 0 0 12,258,075 0 0 (0) 2,941,663 808,808 0 0 10 (0) 0 0 0 0 5,306 (82,853) 0 0 4,800,98 15,445 13,238 34,145 0 (0) 0 55 0 (135,059) (117) 0 33,633 99,530 0 3,699 0 0 (0) 111,528 0 196,418 529,161 1,136,654 2,662,793 289,008 0 0 0 0 4,986 (91,114) (178,239) 60,603 1,721,483 308,061 1,719,715 (4,107) 0 (120,502) (0) 0 0 (1) 0 1 371,284 120,864 525,821 14,350 15,989 24,400 (395,850) (158,481) (237,720) 351,639 55,751 709,806 (177,579) 0 0 0 2 0 (0) 0 0 4,874,66 2,785,44 (0) 943,884 0 0 4 0 Page 23 of 449

APPALACHIAN POWER COMPANY ACCUMULATED DEFERRED INCOME TAX IN ACCOUNT PERIOD ENDED DECEMBER 31, 2008 STATEMENT AG-3 PAGE 4 OF 8 COLUMN A COLUMN G COLUMN H COLUMN I FUNCTIONALIZATION AVERAGE ACCUMULATED DEFERRED FIT ITEMS 43 FK BK WRITE-OFF BLUE RIDGE EASE 44 FR BK WRITE-OFF BLUE RIDGE EASE 45 SV BK WRITE-OFF BLUE RIDGE EASE 46 CV BK WRITE-OFF BLUE RIDGE EASE 47 DEFD TX LOSS-INTERCO SALE-EMA 48 DEFD BOOK GAIN - EPA AUCTION 49 PREPD ROYALTIES BK DEFR 50 ADVANCE RENTAL INC (CUR MO) 51 DEFERRED BOOK RENTS 52 REG - LIAB - UNREAL MTM GAIN - DEFL 53 REG ASSET/LIAB-CENTURY ALUMINUM 54 WVA RATE STABILIZATION LIAB 55 CAPITALIZED SOFTWARE COSTS - TAX 56 CAPITALIZED ADVERTISING EXP - TAX 57 BK DEFL - GAIN REACQUIRED DEBT 58 ACCRD SFAS 106 PST RETIRE EXP 59 SFAS 106 PST RETIRE EXP - NON-DEDUCT CONT 60 ACCRD OPEB COSTS - SFAS 158 61 ACCRD SFAS 112 EMPLOY BEN 62 ACCRD BOOK ARO EXPENSE-SFAS 143 63 ACCRUED BK REMOVAL COST - ACRS 64 DEFD STATE INCOME TAXES 65 ACCRD SIT/FRANCHISE TAX RESERVE 66 ACCRUED SALES & USE TAX RESERVE 67 ACCRD SIT TX RES-LNG-TERM-FIN 48 68 SFAS 109 - DEFD SIT LIABILITY 69 1977-1980 IRS AUDIT SETTLEMENT 70 1985-1987 IRS AUDIT SETTLEMENT 71 1988-1990 IRS AUDIT SETTLEMENT 72 1991-1996 IRS AUDIT SETTLEMENT 73 1994-1996 IRS AUDIT SETTLEMENT 74 1997-2003 IRS AUDIT SETTLEMENT 75 DEFD FIT - CAPITAL LOSS CARRYBACK 76 77 78 NON-UTILITY DEFERRED FIT 79 SFAS 109 FLOW-THRU 190.3 80 SFAS 109 EXCESS DFIT 190.4 81 SFAS 133 ADIT FED - SFAS NONAFFIL 1900006 82 ADIT FED - PENSION OCI NAF 1900009 83 ADIT FED - HEDGE-INTEREST RATE 1900015 84 ADIT FED - HEDGE-FOREIGN EXC 1900016 85 DEFERRED SIT 1901002 86 87 TOTAL ACCOUNT 190 GENERATION TRANSMISSION DISTRIBUTION 13,422 0 0 15,66 99,325 0 0 6,218 0 0 26,11 3,697 0 509,220 0 966,788 0 7,043,535 0 0 0 0 368,762 2,000 (3) 2,094 0 1,562,326 0 (9,092) (10,212) 19,297 6,375,431 1,034,164 9,097,082 1,951,188 376,750 2,526,752 2,837,153 507,521 4,162,040 2,866,095 656,588 2,433,890 13,512,408 0 532,273 2,477,272 14,963,037 27,592,394 2,794,449 2,774,259 3,500,049 638,59 47,705 0 69,895 2,009,937 90,785 136,149 0 0 2 0 0 1,205,918 0 0 604,135 0 0 (2,289,546) 0 0 36,165 0 0 2,202,887 0 0 (0) 20,746,296 0 0 117,794,768 40,363,260 77,893,804 Page 24 of 449

APPALACHIAN POWER COMPANY ACCUMULATED DEFERRED INCOME TAX IN ACCOUNT PERIOD ENDED DECEMBER 31, 2008 STATEMENT AG-3 PAGE 5 OF 8 COLUMN A COLUMN J COLUMN K COLUMN L FUNCTIONALIZATION 12/31/07 ACCUMULATED DEFERRED FIT ITEMS ACCOUNT 190: 1 BOOK VS. TAX DEPRECIATION 2 INT EXP CAPITALIZED FOR TAX 3 CIAC-BOOK RECEIPTS - DISTR - SV 4 CIAC-BOOK RECEIPTS - TRANS 5 CIAC-BOOK RECEIPTS - DISTR - SW 6 CIAC - MUSSER ACQUISTION 7 CUST ADV INC FOR TA- SV 8 SW - OVER RECOVERY FUEL COSTS 9 SV - OVER RECOVERY FUEL COSTS 10 PROVS POSS REV REFDS 11 SALE/LEASE BK RKE SERV CTR 12 LOSS ON DISP OF PROP - SFAS 143 - ARO - BK 13 SALE/LEASE - GRUNDY 14 MTM BK LOSS - A/L - TAX DEFL 15 MARK & SPREAD-DEFL-190-A/L 16 PROV WORKERS COMP 17 ACCRUED BK SUP SAVINGS PLAN EXP 18 SUPPLEMENTAL EXECUTIVE RETIRE PLAN 19 ACCD SUP EXEC RETIR PLAN COSTS-SFAS 158 20 ACCRD BK SUP. SAVINGS PLAN EXP 21 EMPLOYER SAVINGS PLAN MATCH 22 ACCRUED PSI PLAN EXP 23 BK PROV UNCOLL ACCTS 24 PROV - TRADING CREDIT RISK - A/L 25 DEFD COMPENASTION - BOOK EXPENSE 26 ACCRD COMPANYWIDE INCENTV PLAN 27 ACCRUED BOOK VACATION PAY 28 ACCRUED MGMT INCENTIVE BONUS 29 ACCRD BK SEI EMP BENEFIT COSTS 30 ACCRUED BK SEVERANCE BENEFITS 31 ACCRUED INTEREST EXPENSE - STATE 32 ACCRUED INTEREST-LONG-TERM - FIN 48 33 ACCRUED INTEREST-SHORT-TERM - FIN 48 34 ACCRUED STATE INCOME TAX EXPENSE 35 BK DFL RAIL TRANS REV/EXP 36 ACCRUED RTO CARRYING CHARGES 37 DEFERRED RTO EXPENSES & CARRYING CHAR 38 DEFD EQUITY CARRYING CHRGS-ENVIRON COMP COS 39 FEDERAL MITIGATION PROGRAMS 40 STATE MITIGATION PROGRAMS 41 DEFD BK CONTRACT REVENUE 42 DEFD STORM DAMAGES GENERATION TRANSMISSION DISTRIBUTION 0 20,489 0 24,844,195 10,667,627 4,978,354 0 64,604 9,335,175 0 1,253,569 0 0 19,077 3,329,740 0 0 343,638 0 0 579 11,711,658 0 0 3,847,075 0 0 (0) 2,941,663 808,808 0 0 10 (0) 0 0 0 0 5,306 (82,853) 0 0 4,800,98 15,445 13,238 34,145 0 (0) 0 55 0 (135,059) (117) 0 33,633 99,530 0 3,699 0 0 (0) 111,528 0 196,418 529,161 1,136,654 2,662,793 289,008 0 0 0 0 4,986 (91,114) (178,239) 60,603 1,721,483 308,061 1,719,715 (4,107) 0 (120,502) (0) 0 0 (1) 0 1 371,284 120,864 525,821 294,350 327,489 491,400 (395,850) (158,481) (237,720) 351,639 55,751 709,806 (177,579) 0 0 0 2 0 (0) 0 0 4,178,16 2,785,44 (0) 943,884 0 0 4 0 Page 25 of 449

APPALACHIAN POWER COMPANY ACCUMULATED DEFERRED INCOME TAX IN ACCOUNT PERIOD ENDED DECEMBER 31, 2008 STATEMENT AG-3 PAGE 6 OF 8 COLUMN A COLUMN J COLUMN K COLUMN L FUNCTIONALIZATION 12/31/07 ACCUMULATED DEFERRED FIT ITEMS 43 FK BK WRITE-OFF BLUE RIDGE EASE 44 FR BK WRITE-OFF BLUE RIDGE EASE 45 SV BK WRITE-OFF BLUE RIDGE EASE 46 CV BK WRITE-OFF BLUE RIDGE EASE 47 DEFD TX LOSS-INTERCO SALE-EMA 48 DEFD BOOK GAIN - EPA AUCTION 49 PREPD ROYALTIES BK DEFR 50 ADVANCE RENTAL INC (CUR MO) 51 DEFERRED BOOK RENTS 52 REG - LIAB - UNREAL MTM GAIN - DEFL 53 REG ASSET/LIAB-CENTURY ALUMINUM 54 WVA RATE STABILIZATION LIAB 55 CAPITALIZED SOFTWARE COSTS - TAX 56 CAPITALIZED ADVERTISING EXP - TAX 57 BK DEFL - GAIN REACQUIRED DEBT 58 ACCRD SFAS 106 PST RETIRE EXP 59 SFAS 106 PST RETIRE EXP - NON-DEDUCT CONT 60 ACCRD OPEB COSTS - SFAS 158 61 ACCRD SFAS 112 EMPLOY BEN 62 ACCRD BOOK ARO EXPENSE-SFAS 143 63 ACCRUED BK REMOVAL COST - ACRS 64 DEFD STATE INCOME TAXES 65 ACCRD SIT/FRANCHISE TAX RESERVE 66 ACCRUED SALES & USE TAX RESERVE 67 ACCRD SIT TX RES-LNG-TERM-FIN 48 68 SFAS 109 - DEFD SIT LIABILITY 69 1977-1980 IRS AUDIT SETTLEMENT 70 1985-1987 IRS AUDIT SETTLEMENT 71 1988-1990 IRS AUDIT SETTLEMENT 72 1991-1996 IRS AUDIT SETTLEMENT 73 1994-1996 IRS AUDIT SETTLEMENT 74 1997-2003 IRS AUDIT SETTLEMENT 75 DEFD FIT - CAPITAL LOSS CARRYBACK 76 77 78 NON-UTILITY DEFERRED FIT 79 SFAS 109 FLOW-THRU 190.3 80 SFAS 109 EXCESS DFIT 190.4 81 SFAS 133 ADIT FED - SFAS NONAFFIL 1900006 82 ADIT FED - PENSION OCI NAF 1900009 83 ADIT FED - HEDGE-INTEREST RATE 1900015 84 ADIT FED - HEDGE-FOREIGN EXC 1900016 85 DEFERRED SIT 1901002 86 87 TOTAL ACCOUNT 190 GENERATION TRANSMISSION DISTRIBUTION 13,422 0 0 15,66 99,325 0 0 6,218 0 0 26,11 3,697 0 509,220 0 966,788 0 7,043,535 0 0 0 0 368,762 2,000 (3) 2,094 0 1,562,326 0 (9,092) (10,212) 19,297 5,989,431 972,664 8,581,082 1,951,188 376,750 2,526,752 2,837,153 507,521 4,162,040 2,866,095 656,588 2,433,890 13,107,908 0 517,773 2,478,772 15,094,037 27,822,394 2,606,449 2,614,759 3,347,049 638,59 47,705 0 69,895 2,009,937 90,785 136,149 0 0 2 0 0 1,205,918 0 0 604,135 0 0 (2,289,546) 0 0 36,165 0 0 2,202,887 0 0 (0) 20,746,296 117,679,768 40,368,260 77,007,304 Page 26 of 449