E. Linn Draper Jr., 61, the chairman and CEO of American Electric Power (AEP), said Wednesday he will retire in 2004. Draper became president of the Columbus, OH-based utility giant in March 1992 following 13 years with Gulf States Utilities Co. in Beaumont, TX, where he served as CEO. He took over the chair and CEO positions for AEP in May 1993.

“It has been my great privilege to serve AEP for more than 10 years,” said Draper. “However, it is important to renew leadership from time to time at all organizations and the time is right both for me and for AEP to begin an orderly succession process.”

With his leadership, AEP built up its natural gas business beginning in 1998 with the purchase of Equitable Resources’s midstream gas operations (see NGI, Dec. 7, 1998). The addition was AEP’s first midstream gas holding.

In late 2000, Draper helped AEP restructure, placing more focus on its U.S. wholesale power generation, marketing and trading business — a move that has not paid off as well as expected (see Power Market Today, Aug. 24, 2001). At the time, AEP was one of the largest U.S. generators, supplying electricity to nearly 4.8 million customers in 11 states.

By January, AEP’s trading losses had translated into huge losses for the company. Along with more than $1 billion in special charges for the fourth quarter of 2002, the company also announced it would cut its work force by 1,300 jobs, cut spending, trim its dividend by 40% and sell noncore wholesale assets to strengthen its balance sheet (see NGI, Jan. 27).

“The once flourishing wholesale market is no longer the promising business we contemplated three years ago. We will return to the more traditional model of a regulated utility,” said Draper in January.

Before joining Gulf States Utilities, Draper served on the faculty and administration at the University of Texas in Austin, where he had been an associate professor and director of the Nuclear Engineering Program. AEP’s board of directors said it would begin the process of identifying Draper’s successor, and will retain a firm to conduct a search. Both internal and external candidates will be considered.

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