<PAGE> File No. 70-7022
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
Post-Effective Amendment No. 12
to
FORM U-1
________________________________
APPLICATION OR DECLARATION
under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
***
AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza, Columbus, Ohio 43215
AEP GENERATING COMPANY
1 Riverside Plaza, Columbus, Ohio 43215
(Names of companies filing this statement and
addresses of principal executive offices)
***
AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza, Columbus, Ohio 43215
(Name of top registered holding company
parent of each applicant or declarant)
***
G. P. Maloney, Executive Vice President
American Electric Power Service Corporation
1 Riverside Plaza, Columbus, Ohio 43215
Jeffrey D. Cross, Assistant General Counsel
American Electric Power Service Corporation
1 Riverside Plaza, Columbus, Ohio 43215
(Names and addresses of agents for service)
The undersigned American Electric Power Company, Inc. ("AEP")
and AEP Generating Company ("AEGCo"), hereby amend as follows the
Application or Declaration on Form U-1 in File No. 70-7022, as
heretofore amended:
1. By adding the following additional paragraphs to the end
of Item 1 of said Form U-1:
"By prior Commission Order, AEGCo acquired one-half
undivided interest in the Rockport Generating Station
('Plant') along with Indiana & Michigan Electric Company, now
Indiana Michigan Power Company ('I&M'), also a subsidiary of
AEP, including responsibility for 50% of the costs associated
with acquiring certain air and water pollution control devices
('Project') (HCAR No. 23399, August 17, 1984). By subsequent
Order, AEGCo was authorized to enter into an Agreement of Sale
('Agreement') with the City of Rockport, Indiana ('City')
providing for the construction and installation of the Project
by the City, and the issuance by the City of pollution control
revenue bonds ('Series 1984 A Bonds') to finance AEGCo's share
of the Project (HCAR No. 23445, October 4, 1984). The Series
1984 A Bonds were issued in a principal amount of
$150,000,000.
By Order dated September 6, 1985 (HCAR No. 23821), the
Commission authorized AEGCo to enter into a First Amendment to
Agreement of Sale ('1985 Agreement') with the City providing
for the issuance and sale of three additional series of
pollution control bonds ('Series 1985 Bonds'), each in the
principal amount of $55,000,000 with a maturity of September
1, 2014. The proceeds of the Series 1985 Bonds were used to
cover a portion of the cost of construction of the Project and
to refund the outstanding short-term Series 1984 A Bonds in
the principal amount of $150,000,000.
The Series 1985 Bonds consisted of: (i) a series of
Variable Rate Bonds which has already been redeemed; (ii) the
Adjustable Rate Tender Pollution Control Revenue Refunding
Bonds with an interest rate which adjusts every five years
based upon an index ('Adjustable Rate Bonds'); and (iii) a
series of Fixed Rate Bonds ('Fixed Rate Bonds') bearing
interest at 9-3/8% per annum, which is subject to optional
redemption on or after September 1, 1995.
By Order dated October 6, 1994 (HCAR No. 26137), the
Commission authorized AEGCo to enter into an agreement with
the City whereby the City would issue and sell an additional
series of Fixed Rate Pollution Control Revenue Refunding Bonds
in the aggregate principal amount of up to $55,000,000, the
proceeds of which would have been used to provide for the
early redemption of the Fixed Rate Bonds.
AEGCo's management now believes that it may be more
advantageous for AEGCo to refund the Fixed Rate Bonds with a
series of adjustable bonds. Management also believes that the
outstanding Adjustable Rate Bonds do not offer AEGCo
sufficient flexibility because the interest rate for that
series, by its terms, adjusts every five years. AEGCo would
like the flexibility to redeem the Fixed Rate Bonds and the
outstanding Adjustable Rate Bonds on a short-term basis as its
cash flow would permit. In addition, AEGCo can take advantage
of better interest rates if it is not locked into pricing the
Adjustable Rate Bonds on the basis of a five-year rate.
Therefore, it is proposed that the City issue and sell one or
more additional series of Pollution Control Revenue Refunding
Bonds in the aggregate principal amount of up to $110,000,000
('Refunding Bonds' or 'Bonds') with an interest rate
adjustment (as determined by AEGCo). AEGCo could convert the
interest rate on the Bonds between the various modes from
changing daily to fixed for a term up to maturity. The
proceeds of such Bonds will be used to redeem (i) the Fixed
Rate Bonds and (ii) the Adjustable Rate Bonds.
In connection with the issuance of the Refunding Bonds,
AEGCo may enter into one or more interest rate hedging
arrangements (including an interest rate swap, cap, collar, or
similar agreement collectively the 'Hedging Facility') with a
bank or other financial institution (the 'Counterparty'). The
Hedging Facility will be an interest rate conversion agreement
designed to allow AEGCo to actively manage and limit its
exposure to variable interest rates or to lower its overall
borrowing cost on any fixed rate Refunding Bond. The Hedging
Facility will set forth the specific terms upon which AEGCo
will agree to pay the Counterparty payments and/or fees for
limiting its exposure to interest rates or lowering its fixed
rate borrowing cost, and the other terms and conditions of any
rights or obligations thereunder.
The terms of each Hedging Facility would be negotiated by
AEGCo with the respective Counterparty and would be the most
favorable terms that can be negotiated by AEGCo.
The Refunding Bonds will be issued pursuant to the
Indenture of Trust dated as of October 1, 1984 between the
City and Lincoln National Bank & Trust Company (now Norwest
Bank Fort Wayne, N.A.), as Trustee (the 'Indenture'), as
supplemented by a Fifth Supplemental Indenture of Trust
between the City and the Trustee, the form of which is filed
as Exhibit B-4-6 hereto ('Supplemental Indenture') and the
Second Amendment to Agreement of Sale, the form of which is
filed as Exhibit B-1-5 hereto. Pursuant to the Indenture and
the Fifth Supplemental Indenture, the proceeds of the sale of
the Refunding Bonds will be deposited with the Trustee and
applied by the Trustee, together with other funds supplied by
AEGCo, to the redemption of (i) the Fixed Rate Bonds at a
price of 102% of the principal amount thereof and (ii) the
Adjustable Rate Bonds at a price equal to the principal amount
thereof.
While AEGCo will not be a party to the underwriting
arrangements for the Refunding Bonds, the Agreement provides
that the Refunding Bonds shall have such terms as shall be
specified by AEGCo. AEGCo understands that interest on the
Refunding Bonds will be exempt from Federal income taxation
under the provisions of Section 103 of the Internal Revenue
Code of 1986, as amended (except for interest on any Refunding
Bond during a period in which it is held by a person who is a
substantial user of the Project or a related person).
It is expected that the Refunding Bonds will mature at a
date or dates not more than 40 years from the date of their
issuance. The Refunding Bonds may be subject to mandatory or
optional redemption under circumstances and terms specified at
the time of pricing or change in interest rate. In addition,
the Refunding Bonds may not, if it is deemed advisable, be
redeemable at the option of the City in whole or in part at
any time for a period to be determined at the time of pricing
or change in interest rate of the Refunding Bonds. No
Refunding Bond may bear interest at an initial interest rate
higher than 9%.
It is not possible to predict precisely the interest rate
which may be obtained in connection with the original issuance
of the Refunding Bonds. However, AEGCo has been advised that,
depending on maturity and other factors, the annual interest
rate on obligations, interest on which is so excludable from
gross income, historically has been, and can be expected at
the time of issuance of the Refunding Bonds to be, 1-1/2% to
2-1/2% or more lower than the rates of obligations of like
terms and comparable quality, interest on which is fully
subject to Federal income tax. In any event, no series of
Refunding Bonds will be issued at rates in excess of those
generally obtained at the time of pricing for sales of
substantially similar tax-exempt bonds (having the same
maturity, issued by entities of comparable credit quality and
having similar terms, conditions and features).
In connection with an adjustment in the interest rate,
the Refunding Bonds may be tendered, or may be deemed to be
tendered, to the Trustee, by the owners thereof. AEGCo
intends to remarket any Refunding Bonds so tendered through a
remarketing agent, and may have a Liquidity Provider back up
AEGCo's obligations. The Refunding Bonds will be subject to
redemption at the direction of AEGCo under certain
circumstances.
If it is deemed advisable, AEGCo may provide some form of
credit enhancement for the Refunding Bonds, such as a guaranty
by AEP, a letter of credit, surety bond or bond insurance, and
AEGCo may pay a fee in connection therewith. In addition,
AEGCo may provide for a Liquidity Provider for interest
payments, remarketing, redemption or maturity of the Refunding
Bonds. Any letter of credit would not exceed $130,000,000.
The type of credit enhancement may change while the Refunding
Bonds are outstanding. Unreimbursed drawings under the letter
of credit would bear interest at not more than 2% above the
bank's prime rate. AEGCo may pay an annual or upfront fee for
the credit enhancement which would not exceed 1.25% annually
of the face amount.
If it is deemed advisable for AEP to issue a guaranty,
payment of the principal of, premium, if any, and interest on
the Refunding Bonds would be absolutely and unconditionally
guaranteed by AEP pursuant to a Guaranty Agreement to be
executed and delivered to the Trustee and the City. The form
of Guaranty Agreement is attached hereto as Exhibit B-5-7.
AEP would unconditionally guarantee the obligations of AEGCo
under said Agreement pursuant to a guaranty agreement, the
form of which is annexed to said agreement.
The Refunding Bonds could be payable from funds drawn
under an irrevocable letter of credit, bond insurance policy,
Standby Bond Purchase Agreement ('SBPA') or other comparable
obligation of a third party. In connection with such credit
enhancement, AEGCo may enter into a reimbursement agreement,
SBPA or other comparable agreement substantially in the form
attached hereto as Exhibit B-12.
AEGCo will not agree, without further order of this
Commission, to the issuance of any Refunding Bond by the City
(i) if the stated maturity of any such Bond shall be more than
forty (40) years, (ii) if the discount from the initial public
offering price of any such Bond shall exceed 5% of the
principal amount thereof, or (iii) if the initial public
offering price shall be less than 95% of the principal amount
thereof. AEGCo will not enter into the proposed refunding
transaction unless the estimated present value savings derived
from the net difference between interest payments on a new
issue of comparable securities and on the securities to be
refunded is, on an after tax basis, greater than the present
value of all redemption and issuing costs, assuming an
appropriate discount rate. The discount rate used shall be
the estimated after-tax interest rate on the Refunding Bonds
to be issued.
The transactions described herein will be consummated no
later than December 31, 1996. AEGCo hereby requests that an
Order be issued by this Commission (i) releasing jurisdiction
with respect to the purchase price of the Project as it is
affected by the sale of the Refunding Bonds and (ii) reserving
jurisdiction with respect to the purchase price of the Project
as it is affected by the sale of further series of Revenue
Bonds (HCAR No. 23445, October 4, 1984 and HCAR No. 23449,
October 10, 1984)."
2. By adding the following paragraph to the end of Item 2 of
said U-1:
"Estimates of the fees, commissions and expenses to be
paid or incurred directly or indirectly by AEGCo in connection
with the preparation for and the issuance of Refunding Bonds
will be filed by a further post-effective amendment to this
Application or Declaration."
3. By adding the following paragraph to the end of Item 4 of
said Form U-1:
"The proposed issuance of the Refunding Bonds has been
authorized by the Indiana Utility Regulatory Commission."
4. By adding the following paragraph at the end of Item 5 of
said Form U-1:
"AEGCo requests that the Commission's order herein with
respect to the Refunding Bonds be issued on or before April
17, 1995 that there be no thirty-day waiting period between
the issuance of the Commission's order and the date on which
it is to become effective."
5. By supplying the following exhibits:
B-1-5 Form of Second Amendment to Agreement of Sale
(to be filed by amendment)
B-4-6 Form of Fifth Supplemental Indenture between
the City and the Trustee (to be filed by
amendment)
B-5-7 Form of Guaranty Agreement (to be filed by
amendment)
B-12 Form of reimbursement agreement (to be filed
by amendment)
H-2 Form of Notice
6. By supplying the following Financial Statements:
Balance sheets as of December 31, 1994 and Statements of
Income and Retained Earnings, per books and pro forma, for the 12
months ended December 31, 1994, of AEGCo and of American Electric
Power Company, Inc. and its subsidiaries consolidated, together
with journal entries reflecting the proposed transactions (to be
filed by amendment).
7. By adding the following paragraph at the end of Item 7 of
said Form U-1:
"It is believed that the granting and permitting to
become effective of this post-effective amendment, as it
relates to the Refunding Bonds, will not constitute a major
Federal action significantly affecting the quality of the
human environment. No other Federal agency has prepared or is
preparing an environmental impact statement with respect to
the proposed transaction."
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned companies have duly caused
this Post-Effective Amendment No. 12 to be signed on their behalf
by the undersigned thereunto duly authorized.
AMERICAN ELECTRIC POWER COMPANY, INC.
AEP GENERATING COMPANY
By /s/ G. P. Maloney
Vice President
Dated: March 22 , 1995
7022pe12.aeg
Exhibit H-2
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Release No. / , 1995
________________________________________
:
In the Matter of :
:
AMERICAN ELECTRIC POWER COMPANY, INC. :
AEP GENERATING COMPANY :
1 Riverside Plaza :
Columbus, Ohio 43215 :
:
(70-7022) :
________________________________________:
NOTICE OF PROPOSED ISSUANCE OF REFUNDING BONDS BY CITY OF ROCKPORT,
INDIANA IN CONNECTION WITH POLLUTION CONTROL FINANCING
NOTICE IS HEREBY GIVEN that AEP Generating Company ("AEGCo"),
Columbus, Ohio, and its parent American Electric Power Company,
Inc. ("AEP"), a registered holding company, have filed with this
Commission a post-effective amendment to an Application or
Declaration previously filed and amended pursuant to the Public
Utility Holding Company Act of 1935 (the "Act"), designating
Sections 9(a), 10 and 12(b) and (d) of the Act and Rule 44(b)
promulgated thereunder as applicable to the proposed transaction.
All interested persons are referred to the Application or Declara-
tion, as amended by said post-effective amendments, which is
summarized below, for a complete statement of the proposed
transaction.
By prior Commission Order, AEGCo acquired one-half undivided
interest in the Rockport Generating Station ("Plant") along with
Indiana & Michigan Electric Company, now Indiana Michigan Power
Company ("I&M"), also a subsidiary of AEP, including responsibility
for 50% of the costs associated with acquiring certain air and
water pollution control devices ("Project") (HCAR No. 23399, August
17, 1984). By subsequent Order, AEGCo was authorized to enter into
an Agreement of Sale ("Agreement") with the City of Rockport,
Indiana ("City") providing for the construction and installation of
the Project by the City, and the issuance by the City of pollution
control revenue bonds ("Series 1984 A Bonds") to finance AEGCo's
share of the Project (HCAR No. 23420, October 4, 1984). The Series
1984 A Bonds were issued in a principal amount of $150,000,000.
By Order dated September 6, 1985 (HCAR No. 23821), the Commission
authorized AEGCo to enter into a First Amendment to Agreement of
Sale (the "1985 Agreement") with the City providing for the
issuance and sale of three additional series of pollution control
bonds ("Series 1985 Bonds"), each in the principal amount of
$55,000,000, with a maturity of September 1, 2014. One series of
Variable Rate Bonds bears interest at a variable rate, based upon
an index and not to exceed 12% per annum, determined weekly and
payable monthly. A second series of Adjustable Bonds bears
interest payable semi-annually at a rate which will be adjusted
every five years based upon an index (the "Adjustable Rate Bonds").
A third series of Fixed Rate Bonds (the "Fixed Rate Bonds") bears
interest at 9-3/8% per annum, payable semi-annually, and is subject
to optional redemption following an initial period not to exceed
ten years. The proceeds of the Series 1985 Bonds were used to
cover a portion of the cost of construction of the Project and to
refund the outstanding short-term Series 1984 A Bonds in the
principal amount of $150,000,000.
By post-effective amendment it is stated that the City now proposes
to issue and sell one or more series of refunding bonds (the
"Refunding Bonds") in the aggregate principal amount of
$110,000,000, the net proceeds from the sale of which will be used
to provide for the principal payment required for the refunding
prior to their stated maturity of $55,000,000 principal amount of
the Fixed Rate Bonds and $55,000,000 principal amount of the
Adjustable Rate Bonds. The Refunding Bonds will be issued under
and secured by the Indenture of Trust dated as of October 1, 1984
between the City and Lincoln National Bank & Trust Company (now
Norwest Bank Fort Wayne, N.A.), as Trustee ("Indenture") and a
fifth supplemental indenture and will mature at a date or dates not
more than forty years from the date of issuance. AEGCo may provide
credit enhancement for the Refunding Bonds in the form of a
guaranty by AEP, a letter of credit, surety bond or bond insurance
and pay any related fees.
The fees and expenses to be incurred in connection with the pro-
posed transaction will be supplied by further amendment. It is
stated that the Indiana Utility Regulatory Commission has
authorized the transaction and that no other state commission and
no federal commission, other than this Commission, has jurisdiction
thereover.
The Application or Declaration and any amendments thereto are
available for public inspection through the Commission's Office of
Public Reference. Interested persons wishing to comment or request
a hearing should submit their views in writing by April __, 1995 to
the Secretary, Securities and Exchange Commission, Washington, D.C.
20549, and serve a copy on the applicant or declarant at the
address specified above. Proof of service (by affidavit or, in
case of any attorney at law, by certificate) should be filed with
the request. Any request for a hearing shall identify specifically
the issues of fact or law that are disputed. A person who so
requests will be notified of any hearing, if ordered, and will
receive a copy of any notice or Order issued in this matter. After
said date, the Application or Declaration, as filed or as it may be
amended, may be permitted to become effective.
For the Commission, by the Office of Public Utility Regulation,
pursuant to delegated authority.
Jonathan G. Katz
Secretary
7022pe12.exh
