EXHIBIT 10(m)(4)

                              EMPLOYMENT AGREEMENT

     In  consideration  of the mutual promises and covenants  contained  herein,
this  Employment  Agreement  (the  "Agreement")  is entered  into by and between
American Electric Power Service Corporation,  including any of its parent and/or
subsidiary   companies,   divisions,   organizations,   or  affiliated  entities
(collectively  referred to as "AEP"),  and Robert P. Powers (the  "Employee" and
with AEP sometimes collectively referred to as the "Parties"),  this 29th day of
July, 1998.

                          Section I: Term of Employment

     1.01 AEP  agrees  to  employ  Employee  as  Senior  Vice  President-Nuclear
beginning on July 31, 1998 (hereafter referred to as the "Date of Hire").

                         Section II: Duties of Employee

     2.01 Employee shall report to E. Linn Draper,  Jr. or such other individual
as he may designate.  Employee's duties and responsibilities  shall include, but
are not limited to, the following:  operating  AEP's Cook Nuclear Plant and such
other nuclear generation facilities that AEP may periodically acquire, in a safe
and efficient  manner,  ensuring that operations are in full compliance with all
applicable local, state and federal laws,  regulations  and/or  ordinances;  and
perform other related duties that may be assigned from time to time.

     2.02  During   Employee's   employment  with  AEP,  Employee  shall  devote
Employee's  best  efforts,  loyalty,  and  entire  working  time with AEP to the
performance  of Employee's  duties,  and shall not render  services to, or enter
into an employment, independent contractor,  consultancy, or agency relationship
with, any person, firm,  corporation,  other business entity and/or governmental
body or agency other than AEP without AEP's express, prior and written consent.

                     Section III: Compensation and Benefits

     3.01 As compensation  for services and duties rendered under the Agreement,
Employee  shall  receive  from AEP an annual  salary of  $240,000.00  payable in
accordance with AEP's standard payroll practices and subject to withholdings for
FICA and applicable federal, state and local income taxes.

     3.02 Subject to AEP's right to change,  modify,  amend and/or eliminate any
of the  following,  Employee  shall be entitled to  participate  in AEP's Exempt
Salary  Administration  Program, The Management Incentive Program ("MICP"),  The
Performance Share Incentive Program ("PSIP"),  The Nuclear Performance Incentive
Program  ("NPIP"),  The AEP System  Survivor  Benefit Plan (Split  Dollar),  the
American  Electric Power Excess Benefit Plan, and AEP's savings,  retirement and
employee welfare/benefit programs. Upon such terms and conditions established by
AEP, and subject to AEP's right to change,  modify,  amend and/or  eliminate the
following,  the Employee  shall also be entitled to  additional  executive-level
benefits such as a company car and a country club membership.

     3.03 Employee shall be entitled to ten days of paid vacation and three paid
personal days to be used during 1998, and twenty days of paid vacation and three
paid personal days to be used during each year thereafter.

     3.04  Employee  shall  receive a  $300,000.00  bonus  payment,  subject  to
withholding  for FICA and  applicable  federal,  state and local  income tax, as
follows:  $150,000.00  paid at or around the Date of Hire;  $100,000.00  paid on
January 1, 1999;  and  $50,000.00  on January 1,  2000.  The  Employee  can,  at
Employee's  option,  defer some or all of the  $300,000.00  bonus  payment until
Employee  retires,  in the form of a financial  instrument  that is agreeable to
both AEP and the Employee.  AEP shall not be obligated to pay the bonus payments
that are due and owing to  Employee  on January 1, 1999 and  January 1, 2000 if,
prior   to   those   dates,   AEP   terminates    Employee's    employment   for
performance-related reasons or Employee resigns.

                   Section IV: Supplemental Retirement Benefit

     4.01 The Employee shall be entitled to a Supplemental  Retirement  Benefit.
For pension  calculation  purposes,  employee  shall be credited with  seventeen
years of service in addition to the number of years that the  Employee  actually
works for AEP. The Employee shall be entitled to a retirement benefit calculated
as follows:

     (a)  The retirement benefit the Employee would be entitled to receive as of
          the date of the Employee's termination of employment,  under the terms
          of the American  Electric  Power Excess  Benefit Plan, as amended from
          time to time or any successor thereto, based upon the compensation the
          Employee  received  during  the  term  of this  Employment  Agreement,
          including  earned  MICP  awards  and  excluding  earned  PSIP and NPIP
          awards,  based upon the actual  number of years of service to AEP plus
          seventeen years of credited service;

     (b)  Less the retirement  benefit the Employee would be entitled to receive
          as of the date of the Employee's termination of employment,  under the
          terms of the  American  Electric  Power  System  Retirement  Plan,  as
          amended  from time to time or any  successor  thereto,  based upon the
          compensation the Employee  received during the term of this Employment
          Agreement, excluding earned MICP, PSIP and NPIP awards, for the actual
          years of service to AEP;

     (c)  Less any  retirement  benefit the Employee is entitled to receive from
          all qualified and non-qualified  plans sponsored by any prior employer
          of the Employee. The Employee shall provide the Company with a list of
          such other plans within a reasonable time after Employee's  employment
          terminates.

     4.02 The Employee's election under the terms of the American Electric Power
System Retirement Plan of a 50% Joint and Survivor Annuity or any other optional
form of payment, with the valid consent of the Employee's Spouse where required,
shall be deemed to be the payment  election the  Employee  makes for purposes of
the Supplemental Retirement Benefit.

     4.03 In the  event  the  Agreement  is  terminated  due to the death of the
Employee,   the   Employee's   spouse  shall  be  entitled  to  a   Supplemental
Pre-Retirement  Surviving  Spouse  Annuity  provided  that the  Employee and the
Employee's  spouse were  married  for at least one year prior to the  employee's
death.  The amount of the Supplemental  Pre-Retirement  Surviving Spouse Annuity
shall be equal to the following:

     (a)  The  pre-retirement  surviving  spouse annuity the  Employee's  spouse
          would be entitled to receive under the terms of the American  Electric
          Power System Excess  Benefit  Plan,  based upon the  compensation  the
          Employee  received  from the  Company  prior to his  death,  including
          earned MICP awards and excluding earned PSIP and NPIP awards;

     (b)  Less any surviving  spouse annuity the Employee's  surviving spouse is
          entitled to receive from any qualified or non-qualified plan sponsored
          by any prior employer of the Employee;

     (c)  Less any surviving  spouse annuity the Employee's  surviving spouse is
          entitled to receive from the American Electric Power System Retirement
          Plan.

     4.04 The Supplemental Retirement Benefit or the Supplemental Pre-Retirement
Surviving  Spouse  Annuity  shall be paid out of the  general  assets of AEP and
shall be covered by the American  Electric  Power Service  Corporation  Umbrella
Trust for Executives.  The supplemental  benefits provided by this Agreement are
in lieu of any similar  benefit  provided by the American  Electric Power System
Excess Benefit Plan.

                             Section V: Termination

     5.01  Employee's  employment  with AEP is,  and will be at all  times,  "at
will".  Thus,  AEP or Employee  may  terminate  Employee's  employment  and this
Agreement for any or no reason upon written notice to the other.  In the case of
the Employee, the notice shall be furnished not less than fourteen calendar days
prior  to the  designated  date of  termination.  In the  latter  instance,  AEP
reserves  the  right to  accelerate  Employee's  date of  termination  by paying
Employee two weeks'  salary  calculated  on the basis of the  annualized  amount
indicated in Section 3.01.

     5.02 In the event  that  Employee's  employment  is  terminated  under this
Agreement  by either the  Employee or AEP,  AEP shall no longer be  obligated to
provide Employee with any  compensation  under Section 3.01, but Employee shall,
in  accordance  with the  terms  and  conditions  set forth in each plan then in
effect as  applicable,  be entitled to any amounts to which the  Employee may be
eligible to receive  pursuant to Sections  3.02,  Section  3.03,  Section 4, and
Section 5.01 and in accordance  with the terms and  conditions of each plan then
in effect.

     5.03 In the event  that the  Employee's  position  is  eliminated  due to a
change in AEP's  business  strategy or  organization  not related to  Employee's
performance as the Senior Vice President-Nuclear  prior to Employee reaching age
55, AEP will offer Employee either:

     (a)  a   comparable   position   with   comparable   pay,   benefits,   and
          responsibilities within AEP; or

     (b)  if no such position is available, AEP will continue Employee's pay and
          benefits  for a period  not to  exceed  eighteen  months  (hereinafter
          referred to as the  "Transition  Period") to provide  Employee with an
          opportunity to find  employment  outside of AEP.  Payments  during the
          first twelve months of the Transition Period shall include  Employee's
          normal salary,  benefits,  and Employee's  target MICP,  PSIP and NPIP
          incentive payments at target, prorated for partial portions of a year.
          Payment  during the last six  months of the  Transition  Period  shall
          include Employee's base salary and benefits only. In the event that no
          comparable  position is available  within AEP, the Employee  covenants
          and agrees in good faith to diligently  search for a position  outside
          of AEP.  AEP's  obligations  to compensate  Employee any amount of pay
          and/or  benefits  pursuant  to this  provision  shall  cease as of the
          Employee's effective date of hire with a new employer or at the end of
          the Transition Period, whichever occurs first.

     (c)  For purposes of Section 5.03(a) of this Agreement, a position shall be
          deemed to be comparable if Employee's  total  compensation,  including
          incentives at target,  equal at least 90% of the compensation that the
          Employee received with AEP including incentives at target.

     (d)  If, prior to the  expiration of the  Transition  Period,  the Employee
          accepts  employment  with another  company that is not  comparable (as
          defined in Section 5.03(b) of this  Agreement),  AEP will,  during the
          Transition  Period,  pay the difference  between  Employee's new total
          compensation,  including  incentives  at target,  and the payments the
          Employee  would  have  received  had the  Employee  not  accepted  the
          employment with another company.

         Section VI: Confidential Business Information and Trade Secrets

     6.01 Employee  recognizes that during  Employee's  employment with AEP, the
Employee will have access to and become familiar with confidential,  proprietary
and/or trade secret  information which is owned by AEP and regularly used in its
operation. Employee understands and agrees that AEP's confidential,  proprietary
and/or trade secret  information  derives  independent  economic  value for AEP,
actual or potential,  from not being generally known or readily ascertainable by
other persons and entities who can obtain economic value from such  information,
and  that  AEP  takes  reasonable  efforts  to  maintain  the  secrecy  of  this
information.  Employee agrees that during Employee's employment with AEP, except
as required in the performance of Employee's employment with AEP, or at any time
thereafter,  Employee shall not directly or indirectly  possess,  use,  convert,
misappropriate,  copy or duplicate any  confidential,  proprietary  and/or trade
secret  information,  or communicate,  disclose,  sell, transmit or transfer any
confidential,  proprietary and/or trade secret information to any person,  firm,
partnership, corporation,  proprietorship, or business organization or entity of
any kind or description.

     6.02 Employee  acknowledges  that  confidential,  proprietary  and/or trade
secret  information  is defined to include,  but is not limited to, the whole or
any part of paper copies or paper  documents of any kind,  computer  data bases,
computer e-mail,  computer programs and/or computer memory or storage devices of
any  kind  that  contain,  reflect,  or  relate  to:  (a) the  design,  process,
procedure,  method, technique,  formula, or improvement of any current or future
products or services developed,  manufactured,  owned,  produced,  sold, leased,
distributed  or  provided  by  AEP;  (b)  marketing  plans  and  any  associated
information such as customer names and/or contacts, addresses,  telephone or fax
numbers,  mailing  lists,  and customer,  vendor and supplier  account data; (c)
consulting  reports;  (d)  site  assessments;   (e)  business  plans,  financial
information,  billing information, sales figures, price lists, discounts, or any
financial information;  (f) computer passwords or codes; (g) information or data
relating  to the energy  commodity  market and  related  financial  instruments,
and/or statistical and analytical data,  including  analytical  models,  used to
forecast  changes in the pricing of energy  commodities  or the value of related
financial instruments.

     6.03 Employee  understands and agrees that prior to or immediately upon the
termination  of  Employee's   employment  with  AEP,   whether   voluntarily  or
involuntarily and regardless of the  circumstances  relating to the termination,
Employee  shall deliver and leave with AEP in good order all such  confidential,
proprietary  and/or  trade  secret  information,  in  addition  to any other AEP
property, including computer diskettes, laptops and any related equipment, which
is in Employee's possession and/or control.


                           Section VII: Miscellaneous

     7.01 The  Agreement  shall be binding  upon and inure to the benefit of AEP
and its  successors  and assigns,  and Employee and  Employee's  assigns,  legal
representatives  and heirs.  The  Agreement  shall be  assignable  by AEP to any
successor employer.

     7.02 Nothing herein shall be construed as amending the terms and conditions
of the American  Electric Power System  Retirement  Plan, the American  Electric
Power System Employees Savings Plan, the MICP, PSIP or NPIP.

     7.03 The provisions of the Agreement are severable. If any provision of the
Agreement is found by a court of competent  jurisdiction to be unreasonable  and
invalid,  that  determination  shall not affect the  enforceability of the other
provisions,  which shall be enforced in all  respects to the maximum  benefit of
AEP.

     7.04 The Agreement  shall be governed by and  construed in accordance  with
the laws of the State of Ohio. Employee and AEP agree that AEP has the exclusive
right to decide the forum  appropriate  for any  litigation  that relates to the
validity, interpretation,  performance, enforcement, breach or threatened breach
of the Agreement and/or Employee's job performance,  conduct, and/or termination
from  employment  thereunder.  In the  event  that  AEP  determines  that  it is
appropriate for any of the aforementioned issues relating to the Agreement to be
litigated in a state or federal  court located in the State of Ohio, by entering
into this Agreement Employee expressly agrees to confer personal jurisdiction of
Employee upon the common pleas,  municipal,  and federal  courts of the State of
Ohio. In the event that the Employee  initiates any legal action relating to the
aforementioned  issues,  Employee expressly agrees to bring said legal action in
the Franklin  County Court of Common Pleas,  Franklin  County,  Ohio (subject to
AEP's  right to remove  the  action to  federal  court if allowed by law) or the
United States District Court for the Southern District of Ohio, Eastern Division
in Columbus, Ohio.

     7.05 AEP shall have the right to assign this Agreement to any of its parent
and/or subsidiary  companies,  divisions,  organizations or affiliated  entities
that presently exist or which may be established in the future.

     7.06  The  Agreement  contains  the  entire  understanding  of the  Parties
relating to the subject  matter  hereof,  and AEP and Employee each  acknowledge
that they have made no agreements,  representations  or  warranties,  express or
implied, relating to the subject matter of the Agreement which are not set forth
herein or attached  hereto as an addendum.  No provision of the Agreement may be
changed,  modified  or waived  except by an  agreement  in writing and signed by
Employee and E. Linn Draper, Jr.


/s/ Robert P. Powers


/s/ E. Linn Draper, Jr.
Chairman of the Board, President and Chief Executive Officer,
American Electric Power Service Corporation