APPALACHIAN POWER CO
(Q)(1) INCENTIVE COMP DEFERRAL PLAN
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                                                               EXHIBIT 10(q)(1)

                         AMERICAN ELECTRIC POWER SYSTEM

                      INCENTIVE COMPENSATION DEFERRAL PLAN



                                    ARTICLE I

                           PURPOSE AND EFFECTIVE DATE

     1.1 The American Electric Power System Incentive Compensation Deferral Plan
("Plan") is established to allow Eligible Employees to elect to defer receipt of
all or a portion of their  Incentive  Compensation  until their  termination  of
employment.

     1.2 The effective date of the Plan is January 1, 2001.


                                   ARTICLE II

                                   DEFINITIONS

     2.1 "Account" means the separate memo account established and maintained by
the Company or the  recordkeeper  employed by the Company to record  Participant
deferrals of Incentive  Compensation and to record any related Investment Income
on the Fund or Funds selected by the Participant or Former Participant.

     2.2 "Base  Compensation"  means an  employee's  regular base salary or wage
including any salary or wage reductions made pursuant to sections 125 and 402(e)
of the Code and employee  elective  contributions to the American Electric Power
System Supplemental Retirement Savings Plan.

     2.3 "Code" means the Internal  Revenue Code of 1986 as amended from time to
time.

     2.4  "Committee"  means  employees  of the Company  holding  the  following
offices;  Senior Vice  President  Human  Resources,  Executive  Vice President -
Shared Services, and Executive Vice President - Finance and Analysis.

     2.5  "Company"  means  American  Electric  Power Service  Corporation,  its
subsidiaries and affiliates.

     2.6 "Disability" means the Participant's entitlement to disability benefits
under the terms of the American Electric Power System Disability Plan.

     2.7  "Eligible  Employee"  means any  employee  of the  Company  whose Base
Compensation  for the Plan Year  exceeds  $100,000  or is in salary  grade 26 or
higher.

     2.8 "Former Participant" means a Participant who has terminated  employment
or a Participant who is no longer an Eligible  Employee but who has Funds in the
Plan.

     2.9  "Fund"  means  the  investment  options  made  available  to  Eligible
Employees in the American Electric Power System Retirement Savings Plan or other
funds selected by the Committee.

     2.10 "Incentive Compensation" means incentive compensation paid pursuant to
the terms of annual and long-term  incentive  compensation plans approved by the
Committee for  inclusion in the Plan.  Incentive  Compensation  will not include
Base Compensation,  non-annual bonuses  compensation (such as but not limited to
project bonuses and sign-on bonuses), severance pay, or relocation payments

     2.11  "Investment  Income" means with respect to the Fund or Funds selected
by the Participant or Former  Participant the earning,  gains and losses derived
from the investment of deferred compensation in the Fund or Funds.

     2.12  "Participant"  means an Eligible Employee who elects to defer part or
all of his or her Incentive Compensation.

     2.13 "Plan Year" means the  calendar  year  commencing  each  January  1and
ending each December 31.

     2.14 "Retirement" means a Participant or Former  Participant's  termination
of employment after attaining age 55 and the completion of five years of service
with the Company.


                                   ARTICLE III

                                 ADMINISTRATION

     3.1 The  Committee  shall  (i)  administer  and  interpret  the  terms  and
conditions  of  the  Plan,  (ii)  establish  reasonable  procedures  with  which
Participants must comply to exercise any right established hereunder,  and (iii)
be permitted to delegate its  responsibilities or duties hereunder to any person
or entity.  The rights and duties of the  Participants and all other persons and
entities  claiming an interest  under the Plan are subject to, and  governed by,
such acts of administration,  interpretation,  procedure and delegation taken by
the Committee.

     3.2 The  Committee  may employ  agents,  attorneys,  accountants,  or other
persons and allocate or delegate to them powers,  rights,  and duties all as the
Committee  may  consider  necessary  or  advisable  to  properly  carry  out the
administration of the Plan.

     3.3 The Company shall maintain, or cause to be maintained,  records showing
the individual  balances in each Participant's  Account.  Each Participant shall
receive  quarterly  statements  setting  forth the balance of the  Participant's
Account at the end of the quarter.  The  maintenance of the Account  records and
the distribution of the quarterly  statements may be delegated to a recordkeeper
by either the Company or the Committee.


                                   ARTICLE IV

                                  PARTICIPATION

     4.1 Eligible  Employees shall become Plan Participants by making a deferral
election  on a form  prescribed  by the  Company  to  defer  part  or all of the
Eligible Employee's Incentive Compensation earned during the Plan Year but which
is paid after the end of the Plan Year.


                                    ARTICLE V

                                    DEFERRALS

     5.1 A Participant  shall make a separate  Incentive  Compensation  deferral
election for each Plan Year. If a deferral  election for a Plan Year is not made
within the time period  prescribed  by the  Company,  no portion of the Eligible
Employee's Incentive Compensation for the Plan Year shall be deferred.

     5.2 All deferred  Incentive  Compensation  shall be paid in accordance with
the distribution option selected by the Participant in accordance with the terms
of section 7.3.


                                   ARTICLE VI

                         INVESTMENT OF DEFERRED AMOUNTS

     6.1 All  deferred  incentive  compensation  shall be  invested in the Funds
selected by the  Participant.  A  Participant  may change the selected  Funds by
notifying  the  recordkeeper  retained by the  Company.  Any change in the Funds
selected by the Participant shall be implemented as soon as practicable.

     6.2 A  Participant  or Former  Participant  may elect to transfer  all or a
portion  of the  Funds  to any  other  Fund or  Funds by  giving  notice  to the
recordkeeper.  Transfers  between  Funds may be made in any whole  percentage or
dollar amounts and shall be implemented as soon as possible.

     6.3 The Funds  shall be valued  daily at their fair  market  value and each
Participant's and Former Participant's Account shall be valued daily at its fair
market value. The fair market value shall be calculated by the recordkeeper.

     6.4 The Plan is an unfunded  non-qualified  deferred  compensation plan and
amounts  credited to a  Participant's  or Former  Participant's  Account and the
investment  of the  credited  amounts  in the  Fund  or  Funds  selected  by the
Participant  or Former  Participant  are memo accounts that  represent  general,
unsecured  liabilities  of the Company  payable  exclusively  out of the general
assets of the Company.


                                   ARTICLE VII

                                  DISTRIBUTIONS

     7.1 Upon a Participant's or Former Participant's  termination of employment
with the Company for any reason other than  Retirement,  Disability or death the
Company  shall pay the  Participant  or the Former  Participant  the full amount
credited to the Participant's or Former Participant's Account. The payment shall
be made within 60 days of the Participant's or Former Participant's  termination
of employment.

     7.2 Upon a Participant's or Former Participant's  termination of employment
due to  Retirement,  Disability  or  death  benefits  shall  be paid in the form
elected by the Participant or Former  Participant that is in effect at least one
year prior to the payment or the scheduled payment to the Participant  whichever
is sooner.  The payment form elected by a  Participant  or a Former  Participant
shall  apply  to all  Incentive  Compensation  deferral  elections  made  by the
Participant or the Former Participant.

     7.3 The form of benefit payments shall be one of the following:

          1.   A single  lump sum  distribution  at the  time of  Retirement  or
               Disability or up to five years after Retirement or Disability;

          2.   Annual distributions over not less than two and not more than ten
               years   commencing   one  to  five  years  after   Retirement  or
               Disability;

     7.4  Distributions  to Participants  who are not executive  officers of the
Company shall commence as soon as practical (generally within 60 days) after the
Participant's or Former Participant's  Retirement,  Disability or death unless a
Participant has elected to defer  distributions.  Distributions  to Participants
who are executive  officers of the Company shall commence in January of the year
following the Participant's or Former  Participant's  Retirement,  Disability or
death  unless  a  Participant  has  elected  to  defer  distributions.   If  the
Participant or Former Participant elected to defer distributions for one to five
years,  distributions  shall be made on the  selected  deferral  date except for
balances of $5,000 or less as provided in section 7.5.

     7.5 If a Participant's or Former Participant's Account is $5,000 or less on
the date that such  Participant  or Former  Participant  becomes  eligible for a
distribution due to Retirement, Disability, death or the receipt of a withdrawal
request, the full value of the Account shall be distributed as a lump sum.

     7.6 If an annual distribution is selected,  the amount to be distributed in
any  one-year  shall be  determined  by  dividing  the  Participant's  or Former
Participant's   Account  by  the  number  of  years  remaining  in  the  elected
distribution  period.  The  Participant or Former  Participant  electing  annual
distributions  shall  have the  right to make  changes  in the Fund or Funds the
Account is invested in accordance with section 6.2.

     7.7  Notwithstanding  any other  provision  of this Plan a  Participant  or
Former  Participant  shall be entitled to receive,  upon written  request to the
Committee, a lump sum distribution from his or her Account of an amount equal to
or greater than 25% of the Participant's  Account as of the date of the request.
The date of the  request  shall be the date  the  Committee  or the  Committee's
representative  receives  the  request.  The lump sum  amount  to be paid to the
Participant  shall be subject to a 10% early withdrawal  penalty,  which penalty
shall  reduce  the  amount  to be  distributed  to  the  Participant  or  Former
Participant.  The Participant or Former  Participant shall forfeit the amount of
the 10%  withdrawal  penalty.  The lump sum amount  shall be paid within 60 days
after the Committee receives the withdrawal  request.  Any Participant or Former
Participant  who elects to receive a benefit  under  this  section  shall not be
eligible to participate in future Incentive  Compensation deferrals for the Plan
Year in which the request is made and for two consecutive  Plan Years thereafter
and the  Participant  may not request any  additional  withdrawals  prior to the
Participant's termination of employment.


                                  ARTICLE VIII

                                  BENEFICIARIES

     8.1 Each  Participant  or Former  Participant  shall  have the right at any
time,  to  designate  one or more  persons or an entity as a  beneficiary  (both
primary  or  secondary)  to whom  benefits  under this Plan shall be paid in the
event of a  Participant's  or  Former  Participant's  death  prior  to  complete
distribution of the Account. Each beneficiary  designation shall be in a written
form prescribed by the Committee and shall be effective only when filed with the
Committee during the Participant's or Former Participant's lifetime.

     8.2 If the designated  beneficiaries  predecease the  Participant or Former
Participant,  or if the  Participant or Former  Participant  did not designate a
beneficiary,  or if the beneficiary  designation is not valid,  the value of the
Account shall be distributed to the Participant's or Former Participant's spouse
if then living. If the spouse is not living, then the value of the Account shall
be distributed to the representative of the estate. Distributions to a surviving
spouse,  beneficiary  or  representative  of the estate shall be made as soon as
reasonable  in  accordance  with a  distribution  election made by the surviving
spouse,  beneficiary or representative of the estate. If a distribution election
is not completed  within 90 days of the  Participant's  or Former  Participant's
death, the value of the account shall be distributed in a lump sum.

                                   ARTICLE IX

                            MISCELLANEOUS PROVISIONS

     9.1 Each  Participant  agrees that as a condition of  participation  in the
Plan,  the Company may withhold  federal,  state and local income taxes,  Social
Security taxes and Medicare taxes from any distribution  hereunder to the extent
that such taxes are then payable.

     9.2 In the event that a Participant  or  beneficiary  is unable to care for
his or her affairs  because of illness or accident,  the Company may direct that
any payment due the Participant or the beneficiary be paid to the duly appointed
legal representative of the Participant or beneficiary,  and any such payment so
made  shall  be a  complete  discharge  of the  liabilities  of the Plan and the
Company.

     9.3 The Company intends to continue the Plan  indefinitely but reserves the
right to modify the Plan from time to time, or to terminate  the Plan  entirely,
provided  that no such  modification  or  termination  shall affect or otherwise
deprive a Participant or beneficiary of any  distributions  to which they may be
entitled under the Plan.

     9.4 Nothing in the Plan shall  interfere with or limit in any way the right
of the Company to terminate any Participant's  employment at any time, or confer
upon a Participant any right to continue in the employ of the Company.

     9.5 The Plan shall be construed and  administered  according to the laws of
the State of Ohio.



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