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
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
* * *
AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza, Columbus, Ohio 43215
(Name of top registered holding company
parent of each applicant or declarant)
* * *
A. A. Pena, Senior Vice President
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
John F. Di Lorenzo, Jr., Secretary
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 holding
company registered under the Public Utility Holding Company Act of
1935 ("1935 Act"), and American Electric Power Service Corporation
("AEPSC"), a service company subsidiary of AEP (hereinafter
collectively referred to as the "Applicants"), request
authorization to enter into a transaction which involves the
assignment of a lease from Ohio Power Company ("OPCo"), a public
utility subsidiary of AEP, to AEPSC and AEP's guarantee (the
"Guarantee") of certain obligations of AEPSC under the lease.
Pursuant to a Lease, dated as of October 1, 1979, and an
Agreement to Modify Lease, dated as of October 11, 1979, between
AEPSC and American Property Investors IX (the "Lease"), AEPSC
leased the premises situated at 420 S.W. Fourth Street in Canton,
Ohio for use by certain employees of AEPSC (the "Canton Computer
Center"). The term of the lease ends on December 31, 2009, with
the lessee having the option to extend the Lease for up to four
consecutive additional terms of five years each. From October 1,
1979 through March 1995, AEPSC employees occupied the Canton
Computer Center.
Commencing April 1, 1995, OPCo employees began occupying the
Canton Computer Center. In order to have the proper AEP system
company making the lease payments under the Lease, AEPSC, OPCo and
American Real Estate Holdings Limited Partnership ("American Real
Estate"), as successor to American Property Investors IX, entered
into an Assignment of Lease dated as of April 1, 1995, whereby (i)
AEPSC was released from all liability under the Lease for all
obligations arising on or after April 1, 1995 and (ii) OPCo agreed
to pay all rent and assume all liability for any other obligations
arising under the Lease from and after April 1, 1995. Neither AEP
nor AEPSC guaranteed OPCo's obligations under the Assignment of
Lease or otherwise provided indemnification to American Real Estate
in the event of a default by OPCo. As such, Applicants did not
seek Commission approval for the Assignment of Lease.
Due to the recent realignment of the AEPSC accounting
department, AEPSC employees will once again occupy the Canton
Computer Center. In order to have the proper AEP system company
making the lease payments under the Lease, AEPSC and OPCo desire to
enter into a new Assignment of Lease with American Real Estate
whereby (i) OPCo is released from all liability under the Lease for
all obligations arising on or after May 1, 1998 and (ii) AEPSC
agrees to pay all rent and assume all liability for any other
obligations arising under the Lease from and after May 1, 1998.
However, American Real Estate will consent to the Assignment of
Lease only if AEP guarantees AEPSC's obligations under the Lease.
As such, AEP hereby requests authority to enter into an agreement
with American Real Estate whereby AEP guarantees AEPSC's payment of
rent and other obligations under the Lease.
Compliance with Rule 54
Rule 54 provides that in determining whether to approve
certain transactions other than those involving an exempt wholesale
generator ("EWG") or a foreign utility company ("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). As of September 30, 1997, AEP, through
its subsidiary, AEP Resources, Inc., had aggregate investment in
FUCOs of $388,096,000. This investment represents approximately
24.4% of $1,590,817,000, the average of the consolidated retained
earnings of AEP reported on Form 10-Q for the four consecutive
quarters ended September 30, 1997.
Rule 53(a)(2). Each FUCO in which AEP invests 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 company subsidiaries of AEP will, at any one time,
directly or indirectly, render services to any FUCO.
Rule 53(a)(4). AEP has submitted and will 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 company subsidiaries.
Rule 53(b). (i) Neither AEP nor any subsidiary of AEP is
the subject of any pending bankruptcy or similar proceeding; (ii)
AEP's average consolidated retained earnings for the four most
recent quarterly periods ($1,590,817,000) represented an increase
of approximately $16,165,000 (or 1%) in the average consolidated
retained earnings from the previous four quarterly periods
($1,574,652,000); and (iii) for the fiscal year ended December 31,
1996, AEP did not report operating losses attributable to AEP's
direct or indirect investments in EWGs and FUCOs.
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 expenses, other than expenses billed
at cost by AEPSC (not to exceed $5,000), have been or are to be
paid or incurred by Applicants or any associate company in
connection with the proposed transaction.
Item 3. Applicable Statutory Provisions.
Applicants consider that AEP acting as guarantor for the
obligations of AEPSC as set forth in Item 1 hereof is subject to
Sections 6(a), 7 and 12(b) of the 1935 Act, and Rule 45 thereunder.
Item 4. Regulatory Approval.
The proposed transaction is not subject to the jurisdiction of
any state commission or any federal commission other than this
Commission.
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
and permitting to become effective this Application or Declaration
be issued on or before May 1, 1998. Applicants 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.
Applicants consent to the Division of Investment Management
assisting in the preparation of the Commission's decision and/or
order in this matter, unless the Division opposes the matter
covered by this Application or Declaration.
Item 6. Exhibits and Financial Statements.
The following exhibits and financial statements are filed as
part of this statement:
(a) Exhibits:
Exhibit B Form of Guarantee to be executed by AEP
(to be filed by amendment)
Exhibit F Opinion of Counsel (to be filed by
amendment)
Exhibit G Form of Notice
(b) Financial Statements:
It is not believed that financial statements of AEP and
its subsidiaries consolidated are necessary since Applicants are
wholly-owned subsidiaries of AEP and all intercompany transactions
are eliminated to prepare such financial statements.
Item 7. Information as to Environmental Effects.
It is believed that the granting and permitting to become
effective 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 transaction.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned companies have duly caused
this statement to be signed on their behalf by the undersigned
thereunto duly authorized.
AMERICAN ELECTRIC POWER COMPANY, INC.
By:_/s/ A. A. Pena______________
A. A. Pena, Treasurer
AMERICAN ELECTRIC POWER SERVICE CORPORATION
By:_/s/ A. A. Pena______________
A. A. Pena, Senior Vice President
Date: March 18, 1998
Exhibit G
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Release No. /April , 1998
_____________________________________________
:
In the Matter of :
:
:
AMERICAN ELECTRIC POWER COMPANY, INC. :
AMERICAN ELECTRIC POWER SERVICE CORPORATION :
1 Riverside Plaza :
Columbus, Ohio 43215 :
:
(70- ) :
_____________________________________________:
NOTICE OF PROPOSED GUARANTY OF CERTAIN LEASE OBLIGATIONS
American Electric Power Company, Inc. ("AEP"), a holding company
registered under the Public Utility Holding Company Act of 1935
("1935 Act") and American Electric Power Service Corporation
("AEPSC"), a service company subsidiary of AEP, have filed an
Application or Declaration with this Commission pursuant to
Sections 6(a), 7 and 12(b) of the 1935 Act and Rule 45 thereunder.
Pursuant to a Lease, dated as of October 1, 1979, and an Agreement
to Modify Lease, dated as of October 11, 1979, between AEPSC and
American Property Investors IX (the "Lease"), AEPSC leased the
premises situated at 420 S.W. Fourth Street in Canton, Ohio for use
by certain employees of AEPSC (the "Canton Computer Center"). From
October 1, 1979 through March 1995, AEPSC employees occupied the
Canton Computer Center.
Commencing April 1, 1995, Ohio Power Company ("OPCo") employees
began occupying the Canton Computer Center. In order to have the
proper AEP system company making the lease payments under the
Lease, AEPSC, OPCo and American Real Estate Holdings Limited
Partnership ("American Real Estate"), as successor to American
Property Investors IX, entered into an Assignment of Lease dated as
of April 1, 1995, whereby AEPSC was released from, and OPCo
assumed, all liability under the Lease.
Due to the recent realignment of the AEPSC accounting department,
AEPSC employees will once again occupy the Canton Computer Center.
In order to have the proper AEP system company making the lease
payments under the Lease, AEPSC and OPCo desire to enter into a new
Assignment of Lease with American Real Estate whereby OPCo is
released from, and AEPSC assumes, all liability under the Lease
from and after May 1, 1998. American Real Estate will consent to
the Assignment of Lease only if AEP guarantees AEPSC's obligations
under the Lease. As such, AEP hereby requests authority to enter
into an agreement with American Real Estate whereby AEP guarantees
AEPSC's payment of rent and other obligations under the Lease.
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 , 1998 to
the Secretary, Securities and Exchange Commission, Washington, D.C.
20549, and serve a copy on the 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
