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File No. 70-9021
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________
POST-EFFECTIVE AMENDMENT NO. 2
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 Item 1.F. as follows:
"F. Authority of Resources and Project Parents.
American and Resources hereby request authority for
Project Parents to pursue project development activities for
Resources and its subsidiaries. Project development activities
include investigation of sites, preliminary engineering and
licensing activities, acquiring options and rights, contract
drafting and negotiating, preparation of proposals and other
necessary activities to identify and analyze feasible investment
opportunities and to initiate the commercialization of a project
(collectively, 'project development activities'). American and
Resources also request authority for Project Parents to provide
project management and administrative services for Resources and
its subsidiaries. Project management and administrative services
include the ongoing personnel, accounting, engineering, legal,
financial and other support activities necessary to manage
project development activities related to projects and potential
investments therein (collectively, 'administrative services').
Such authority is in addition to Resources' existing authority to
pursue project development activities and perform administrative
services for itself and its subsidiaries."
By adding the following to the end of Item 1. Description of
Proposed Transaction:
"G. Acquisition of Certain Special Purpose and Finance
Subsidiaries.
American and Resources also request approval to acquire
from time to time, directly or indirectly, the securities of or
other interest in one or more subsidiaries ('Special Purpose
Subsidiaries') organized exclusively for the purpose of pursuing
project development activities and performing administrative
services on behalf of both associate Exempt Projects and QFs and
to non-associates. American and Resources anticipate that
Special Purpose Subsidiaries will be needed in order to establish
and manage foreign project development offices, and to provide
operations and maintenance, construction or asset management
services, whether to an associate Exempt Project or QF or to a
non-associate company. Creating separate subsidiaries for such
purposes serves to isolate the risks of one activity from others,
and may be necessary to satisfy the requirements of applicable
foreign or U.S. laws.
All services rendered by Special Purpose Subsidiaries
to non-associates will be based upon the fair market value
thereof and will be subject to such other terms, conditions and
standards of performance as are negotiated on a case-by-case
basis, taking into account the kind and scope of services
involved, the duration of the contract, the levels of warranties
and indemnities that may be negotiated, and other factors that
are unique to each transaction
Similarly, American and Resources propose that Project
Parents and Special Purpose Subsidiaries provide their respective
services and sell related goods to any subsidiary of Resources
that is an EWG, FUCO or QF at fair market prices, and requests an
exemption under Section 13(b) from the requirements of Rules 90
and 91 as applicable to such transaction in any case in which any
one or more of the following circumstances shall apply:
(1) Such entity is a FUCO, or is an EWG which derives
no part of its income, directly or indirectly, from the
generation, transmission or distribution of electric energy
for sale within the Untied States; or
(2) Such entity is an EWG which sells electricity at
market-based rates which have been approved by the Federal
Energy Regulatory Commission ('FERC') or the appropriate
state public utility commission, provided that the purchaser
of such electricity is not an associate company within the
American Electric Power System;
(3) Such entity is a QF that sells electricity
exclusively (i) at rates negotiated at arms'-length to one
or more industrial or commercial customers purchasing such
electricity for their own use, and/or (ii) to an electric
utility company not an associate company within the American
Electric Power System at the purchaser's 'avoided cost' as
determined in accordance with the regulations under the
Public Utility Regulatory Policies Act of 1978; or
(4) Such entity is an EWG or QF that sells electricity
at rates based upon its cost of service, as approved by FERC
or any state public utility commission having jurisdiction,
provided that the purchaser of such electricity is not an
associate company within the American Electric Power System.
The Commission previously authorized such fair market value
pricing for AEP Energy Services, Inc., a wholly-owned subsidiary
of American, in American Electric Power Company, Inc., et al.,
HCAR No. 26267 (April 5, 1995).
American and Resources further request authorization to
acquire from time to time, directly or indirectly, the securities
of, or other interests in, one or more financing subsidiaries
('Financing Subsidiaries'). Regulatory and taxation concerns may
make the use of such Finance Subsidiaries desirable in connection
with the financing by Resources and its direct and indirect
subsidiaries of interests in Exempt Projects in certain
jurisdictions.
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 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."
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: November 20, 1998
