File No. 70-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
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
_______________________________________
APPALACHIAN POWER COMPANY
40 Franklin Road, S.W., Roanoke, Virginia 24011
_______________________________________________
COLUMBUS SOUTHERN POWER COMPANY
215 North Front Street, Columbus, Ohio 43215
____________________________________________
INDIANA MICHIGAN POWER COMPANY
One Summit Square, P. O. Box 60, Fort Wayne, Indiana 46801
__________________________________________________________
KENTUCKY POWER COMPANY
1701 Central Avenue, Ashland, Kentucky 41101
____________________________________________
KINGSPORT POWER COMPANY
40 Franklin Road, S. W. Roanoke, Virginia 24011
_______________________________________________
OHIO POWER COMPANY
301 Cleveland Avenue, S. W., Canton, Ohio 44701
_______________________________________________
WHEELING POWER COMPANY
51 Sixteenth St., Wheeling, West Virginia 26003
_______________________________________________
(Name of company or 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
John F. DiLorenzo, Jr., Associate General Counsel
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
_______________________________________
(Names and addresses of agents for service)
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION
American Electric Power Company, Inc. ("AEP"), a registered
holding company, and eight electric utility subsidiary companies,
Appalachian Power Company ("Appalachian"), Columbus Southern
Power Company ("Columbus"), AEP Generating Company
("Generating"), Indiana Michigan Power Company ("Indiana"),
Kentucky Power Company ("Kentucky"), Kingsport Power Company
("Kingsport"), Ohio Power Company ("Ohio") and Wheeling Power
Company ("Wheeling") (collectively, the "AEP System") request
authorization to sell certain utility assets without prior
Commission approval.
By HCAR Release No. 26031 dated April 20, 1994, the
Commission amended Rule 44(b) under the Public Utility Holding
Company Act of 1935 (the "Act"). This amendment, among others,
was part of a general attempt to modernize the rules under the
Act and, in particular, to reduce undue regulatory burdens on
companies in a registered holding company system. Rule 44,
adopted under section 12(d) of the Act, governs sales of utility
securities and utility assets by a registered holding company to
any person. Previously, the rule required approval by this
Commission of sales of securities or of utility assets, if the
total consideration to be received was in excess of $100,000 and
the acquisition by the buyer was not subject to Commission
approval. Rule 44, as amended, provides an exemption for all
sales up to an annual aggregate amount of $5 million for all
system operating subsidiaries when the acquisition of the
securities or utility assets does not require Commission approval.
The electric utility industry is in transition to a more
competitive environment. In response to requests of customers,
the AEP System has been willing to transfer substations and
transmission and distribution lines or other utility assets that
serve the customer to that customer or to potential customers.
In addition, there are routine transfer of poles to joint users.
On June 7, 1996, APCO transferred personal property
interests installed at APCO's Skimmer station to serve the
Georgia-Pacific Company's manufacturing facility located in Big
Island, Virginia valued at approximately $2.6 million to the City
of Bedford pursuant to authority of the Virginia State
Corporation Commission.
Pursuant to approval of the Indiana Utility Regulatory
Commission, I&M has agreed to sell to the City of Auburn,Indiana
certain electrical distribution facilities, including
distribution lines, poles and transformers, for a consideration
of approximately $500,000.
Indiana is currently reviewing two requests from large
industrial customers to purchase and lease back (i) a new 69/12
kV substation valued at approximately $2,400,000 and (ii) a 34.5
kV system carried on the books at $150,000 that will receive
$800,000 in upgrades. The customers propose to lease the
equipment so that they can retain their current favorable tariff.
This area is also regulated by state public service
commissions. The Virginia State Corporation Commission has
jurisdiction over the sale of "utility assets" by a public
utility. The West Virginia Public Service Commission regulates
all sales of property in excess of $50,000 by public utilities
subject to its jurisdiction. State commissions in Indiana and
Ohio regulate the sale of assets by two utilities in their
jurisdictions.
In this new environment, it is mandatory that the AEP System
be able to transfer assets quickly. Since the AEP System is
comprised of eight operating companies, the $5 million system-
wide exemption could be exhausted with relatively few
transactions.
Therefore, it is requested that, without further Commission
approval, AEP and its utility subsidiaries be permitted to
transfer utility assets to customers and noncustomers for a
period ending December 31, 2001. The consideration for the
transfers will be not less than the net book value of the assets
and will not exceed $5,000,000 per operating subsidiary per
calendar year ($50,000,000 in any calendar year for the AEP
System). In the case of a lease, the lease payments will be
valued over the term of the lease and be counted against the
exemption amount in the initial year of the lease.
APPLICATION OF PROCEEDS
The proceeds of the sales of utility assets will be added to
the general funds of such companies and used to pay the general
obligations of such companies, including expenditures incurred in
their various construction projects, and for other corporate
purposes.
CERTIFICATES OF NOTIFICATION
It is proposed that Certificates of Notification under Rule
24 shall be filed annually, with respect to sales of assets by
Appalachian, Columbus, Generating, Indiana, Kentucky, Kingsport,
Ohio and Wheeling. Each such certificate will be filed by April
30 for the previous calendar year.
COMPLIANCE WITH RULE 54
Rule 54 provides that in determining whether to approve
certain transactions other than those involving exempt wholesale
generators ("EWG") or foreign utility companies ("FUCO"), as
defined in the 1935 Act, the Commission will not consider the
effect of the capitalization or earnings of any subsidiary which
is an EWG or FUCO if Rule 53(a), (b) and (c) are satisfied. The
requirements of Rule 53(a), (b) and (c) are satisfied.
Rule 53(a)(1): AEP Resources International, Limited
("AEPRI"), an indirect subsidiary of AEP, is an EWG. As of June
30, 1996, AEP, through its subsidiary, AEP Resources, Inc., had
invested $3,265,000 in AEPRI. This investment represents less
than 1% of $1,438,761,000, the average of the consolidated
retained earnings of AEP reported on Form 10-K or Form 10-Q, as
applicable, for the four consecutive quarters ended June 30,
1996.
Rule 53(a)(2): AEPRI will maintain books and records and
make available the books and records required by Rule 53(a)(2).
Rule 53(a)(3): No more than 2% of the employees of the
operating subsidiaries of AEP will, at any one time, directly or
indirectly, render services to AEPRI.
Rule 53(a)(4): AEP has submitted and will continue to
submit a copy of Item 9 and Exhibits G and H of AEP's Form U5S to
each of the public service commissions having jurisdiction over
the retail rates of AEP's operating utility subsidiaries.
Rule 53(b): In addition, (i) neither AEP nor any subsidiary
of AEP is the subject of any pending bankruptcy or similar
proceedings; (ii) AEP's average consolidated retained earnings
for the four most recent quarterly periods ($1,438,761,000)
represented an increase of approximately $38,153,000 (or 0.3%) in
the average consolidated retained earnings from the previous four
quarterly periods ($1,400,608,000); and (iii) for the year ended
December 31, 1995, there were no losses attributable to AEP's
direct or indirect investments in AEPRI other than $93,000 in
preliminary development start-up costs.
Rule 53(c): Rule 53(c) is inapplicable because the
requirements of Rule 53(a) and (b) have been satisfied.
ITEM 2. FEES, COMMISSIONS AND EXPENSES
No fees, commissions or other expenses are to be paid or
incurred, directly or indirectly, by AEP, Appalachian, Columbus,
Generating, Indiana, Kentucky, Kingsport, Ohio or Wheeling or any
associated company in connection with the proposed transactions,
other than this Commission's filing fee of $2,000 and fees and
expenses to be billed at cost by the American Electric Power
Service Corporation and not to exceed $2,000 in the aggregate.
ITEM 3. APPLICABLE STATUTORY PROVISIONS
AEP, Appalachian, Columbus, Generating, Indiana, Kentucky,
Kingsport, Ohio and Wheeling designate Section 12(d) of the Act
and Rule 44(b) thereunder as applicable to the sale of utility
assets to non-affiliates.
ITEM 4. REGULATORY APPROVALS
No commission other than the Securities and Exchange
Commission has jurisdiction over the transactions for which
authority is requested herein. Individual sales of assets may be
governed by other state regulatory commissions.
ITEM 5. PROCEDURE
It is requested, pursuant to Rule 23(c) of the Rules and
Regulations of the Commission, that the Commission's Order
granting this Application or Declaration on Form U-1 be issued on
or before December 1, 1996. AEP, Appalachian, Columbus,
Generating, Indiana, Kentucky, Kingsport, Ohio and Wheeling waive
any recommended decision by a hearing officer or by any other
responsible officer of the Commission and waive the 30-day
waiting period between the issuance of the Commission's Order and
the date it is to become effective, since it is desired that the
Commission's Order, when issued, become effective forthwith.
AEP, Appalachian, Columbus, Generating, Indiana, Kentucky,
Kingsport, Ohio and Wheeling consent to the Office of Public
Utility Regulation assisting in the preparation of the
Commission's decision and/or Order in this matter, unless the
Office of Public Utility Regulation opposes the matters covered
by this Application or Declaration on Form U-1.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
The following exhibits, financial statements, and Source of
Funds Statements are filed as part of this statement:
(a) Exhibits:
Exhibit A None
Exhibit B None
Exhibit C None
Exhibit D None
Exhibit E None
Exhibit F Opinion of Counsel
Exhibit G Form of Notice
(b) Financial Statements:
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS
It is believed that the granting of this Application or
Declaration 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
transactions.
SIGNATURES
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned have duly caused this
statement to be signed on their behalf by the undersigned
thereunto duly authorized.
AMERICAN ELECTRIC POWER COMPANY, INC.
AEP GENERATING COMPANY
APPALACHIAN POWER COMPANY
COLUMBUS SOUTHERN POWER COMPANY
INDIANA MICHIGAN POWER COMPANY
KENTUCKY POWER COMPANY
KINGSPORT POWER COMPANY
OHIO POWER COMPANY
WHEELING POWER COMPANY
By:__________/s/_A._A._Pena_____________
Treasurer
Dated: October 8, 1996<PAGE>
EXHIBIT F
(614) 223-1649
October 8, 1996
Securities and Exchange Commission
Office of Public Utility Regulation
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: AMERICAN ELECTRIC POWER COMPANY, INC. ET. AL.
FILE NO. 70-
Gentlemen:
In connection with the exemption proposed and described in the
Application or Declaration on Form U-1 filed with the Securities
and Exchange Commission by American Electric Power Company, Inc.
and its operating company subsidiaries (the "Companies") to which
this opinion is an exhibit, I have examined, among other things,
the Application or Declaration on Form U-1 and the documents
referred to in it.
In my opinion, if the Application or Declaration is granted and
permitted to become effective; if all of the actions proposed to
be taken by the Boards of Directors of the Applicants or
Declarants are taken; and if all of the proposed transactions are
consummated in accordance with the aforesaid Application or
Declaration:
(a) all state laws applicable to the proposed
transactions will have been complied with;
(b) the consummation of the proposed transactions will
not violate the legal rights of the holders of any
securities issued by the Applicants or Declarants, or any
associate company.
I consent to the use of this opinion as part of the above-
mentioned Application or Declaration.
Very truly yours,
/s/ Ann B. Graf
Ann B. Graf
Counsel for the Companies
ABG:scc<PAGE>
EXHIBIT G
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Release No. ______ / , 1996
_____________________________________________
:
In the Matter of :
:
AMERICAN ELECTRIC POWER COMPANY, INC., et al.:
1 Riverside Plaza :
Columbus, Ohio 43215 :
:
( ) :
_____________________________________________:
NOTICE OF PROPOSED INCREASE IN EXEMPTION UNDER RULE 44
American Electric Power Company, Inc. ("American"), a registered
holding company, and its subsidiaries, AEP Generating Company
("Generating"), Appalachian Power Company ("Appalachian"),
Columbus Southern Power Company ("Columbus"), Indiana Michigan
Power Company ("Indiana"), Kentucky Power Company ("Kentucky"),
Kingsport Power Company ("Kingsport"), Ohio Power Company
("Ohio") and Wheeling Power Company ("Wheeling") (collectively
the "Companies"), have filed a proposal with this Commission
pursuant to Section 12(d) and of the Public Utility Holding
Company Act of 1935 ("Act") and Rule 44 thereunder.
During the period beginning January 1, 1997, and ending December
31, 2001, Appalachian, Columbus, Indiana, Kentucky and Ohio
propose to transfer utility assets as defined under the Act to
customers and noncustomers. The consideration for the transfers
will be not less than the net book value of the assets and will
not exceed $5,000,000 per operating subsidiary in any calendar
year ($50,000,000 in any calendar year for the AEP system). In
the case of a lease, the lease payments will be valued over the
term of the lease and be counted against the exemption amount in
the initial term of the lease.
The proposal 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 November ____, 1996, to the
Secretary, Securities and Exchange Commission, Washington, D.C.
20549, and serve a copy on the applicant at the address specified
above. Proof of service (by affidavit or, in the case of an
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 proposal, as filed or as amended, may be
authorized.
For the Commission, by the Office of Public Utility Regulation,
pursuant to delegated authority.
Jonathan G. Katz
Secretary
