SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________
POST-EFFECTIVE AMENDMENT NO. 3
TO
FORM U-1
__________________________________
APPLICATION OR DECLARATION
under the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
* * *
AMERICAN ELECTRIC POWER COMPANY, INC.
AEP RESOURCES, INC.
1 Riverside Plaza, Columbus, Ohio 43215
(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)
* * *
Susan Tomasky, General Counsel
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
(Names and addresses of agents for service)
Jeffrey D. Cross, General Counsel
AEP RESOURCES, INC.
1 Riverside Plaza, Columbus, Ohio 43215
(Names and addresses of agents for service)
American Electric Power Company, Inc. ("American"), a
registered holding company under the Public Utility Holding Company
Act of 1935, as amended, and its subsidiary, AEP Resources, Inc.
("Resources"), hereby amend their Application or Declaration on
Form U-1 in File No. 70-9021 as follows:
1. By amending and restating the last paragraph of Item 1G
as follows:
"Finance Subsidiaries would be wholly-owned by Project
Parents and would issue securities in the public or private capital
markets both in the U.S. and abroad. The proceeds of any such
securities issuance by a Finance Subsidiary would be loaned to the
Project Parent owner of such Finance Subsidiary pursuant to loan
documentation. The Project Parent would use the proceeds to invest
in Exempt Projects and to finance the existing business of such
Project Parent. The Project Parent will provide the Finance
Subsidiary with payments on the Project Parent's loan which will
allow repayment of the Finance Subsidiary's obligations under the
securities the Finance Subsidiary has issued. Any debt security
issued by a Project Parent to its Finance Subsidiary to evidence
loans made by the Finance Subsidiary will comply with the
requirements of Rule 52(b)(2). The exclusive function and business
activity of any Finance Subsidiary will be the issuance of its
securities, loaning of the proceeds to its Project Parent owner and
transactions incidental thereto. Although a Finance Subsidiary
would not hold the securities of an Exempt Project, it would serve
exclusively as a 'captive' financing adjunct of the Project Parent
that will hold such securities. Using a Finance Subsidiary to
finance the activities contemplated in the Application and the
Orders will provide, in each case in which a Finance Subsidiary is
used, a Project Parent with economic advantages it could not attain
without the use of a Finance Subsidiary."
2. By adding the following paragraphs to the end of Item 1:
"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. As set forth below, all applicable conditions
of Rule 53(a) are currently satisfied and none of the
conditions set forth in Rule 53(b) exist or will exist as a
result of the transactions proposed herein, thereby satisfying
such provision and making Rule 53(c) inapplicable.
Rule 53(a)(1). As of September 30, 1998, American,
through its subsidiary, AEP Resources, Inc., had aggregate
investment in FUCOs of $463,536,000. This investment
represents approximately 28.0% of $1,654,505,000, the average
of the consolidated retained earnings of American reported on
Forms 10-Q and 10-K for the four consecutive quarters ended
September 30, 1998.
Rule 53(a)(2). Each FUCO in which American 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 Companies of American will, at any one time,
directly or indirectly, render services to any FUCO.
Rule 53(a)(4). American has submitted and will submit a
copy of Item 9 and Exhibits G and H of American's Form U5S to
each of the public service commissions having jurisdiction
over the retail rates of American's Utility Subsidiaries.
Rule 53(b). (i) Neither American nor any subsidiary of
American is the subject of any pending bankruptcy or similar
proceeding; (ii) American's average consolidated retained
earnings for the four most recent quarterly periods
($1,654,585,000) represented an increase of approximately
$63,768,000 (or 4%) in the average consolidated retained
earnings from the previous four quarterly periods
($1,590,817,000); and (iii) for the fiscal year ended December
31, 1997, American did not report operating losses
attributable to American's direct or indirect investments in
EWGs and FUCOs.
American was authorized to invest up to 100% of its
consolidated retained earnings in EWGs and FUCOs (HCAR No.
26864, April 27, 1998) (the '100% Order') in File No. 70-9021.
In connection with its consideration of American's application
for the 100% Order, the Commission reviewed American's
procedures for evaluating EWG or FUCO investments. Based on
projected financial ratios and on procedures and conditions
established to limit the risks to American involved with
investments in EWGs and FUCOs, the Commission determined that
permitting American to invest up to 100% of its consolidated
retained earnings in EWGs and FUCOs would not have a
substantial adverse impact upon the financial integrity of the
AEP System, nor would it have an adverse impact on any of the
Utility Subsidiaries or their customers, or on the ability of
state commissions to protect the Utility Subsidiaries or their
customers. Since similar considerations are involved
hereunder with respect to Rule 54, Applicant should not be
required to make subsequent Rule 54 filings once American's
aggregate investment in EWGs and FUCOs exceeds 50% of its
consolidated retained earnings."
3. By adding the following statement to the end of Item 2:
"No additional expenses, other than expenses estimated not to
exceed $2,000 to be billed at cost by American Electric Power
Service Corporation, are expected to be incurred in connection with
this Post-Effective Amendment No. 3."
4. By adding the following sentence to the end of Item 4 as
follows:
"The transactions described in this Post-Effective Amendment
No. 3 are not subject to the jurisdiction of any State commission
or of any federal commission other than this Commission."
5. By filing an Opinion of Counsel as Exhibit F hereto.
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.
AEP RESOURCES, INC.
By_/s/ Henry W. Fayne_______________
Vice President
Dated: December 29, 1998
Exhibit F
614/223-1648
Securities and Exchange Commission
Office of Public Utility Regulation
450 Fifth Street, N.W.
Washington, D.C. 20549
December 29, 1998
Re: American Electric Power Company, Inc. ("AEP")
SEC File No. 70-9021
Gentlemen:
In connection with the transactions proposed and described in the
Application or Declaration on Form U-1 filed with this Commission
by AEP in the captioned proceeding, to which this opinion is an
exhibit, I wish to advise you as follows:
I am of the opinion that AEP is a corporation validly organized
and duly existing under the laws of the state in which it was
incorporated.
I am further of the opinion that, in the event that the proposed
transactions are consummated in accordance with said Application
or Declaration:
(a) all state laws applicable to the proposed transactions
will have been complied with; and
(b) consummation of the proposed transactions will not
violate the legal rights of the holders of any
securities issued by AEP or any associate company
thereof.
I hereby consent to the filing of this opinion as an exhibit to
the above-mentioned Application or Declaration, as amended.
Very truly yours,
/s/ Thomas G. Berkemeyer
Thomas G. Berkemeyer
