File No. 70-8693
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. 1
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
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 state-
ment 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)
***
A. A. Pena, Treasurer
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)
American Electric Power Company, Inc. ("American"), 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") propose to amend their
Application/Declaration on Form U-1 in File No. 70-8693.
Background: By Order dated December 8, 1995 in this File
(Release No. 35-26424), the Companies were authorized to incur
short-term indebtedness, through December 31, 2000, through the
issuance and sale of short-term notes to banks and commercial paper
to dealers in commercial paper in aggregate amounts not to exceed
the following:
Company Amount
American $150,000,000
Appalachian 250,000,000
Columbus 175,000,000
Indiana 175,000,000
Kentucky 150,000,000
Generating 100,000,000
Kingsport 30,000,000
Ohio 250,000,000
Wheeling 30,000,000
Total: $1,310,000,000
The Companies propose to amend this filing to increase the
amount of short-term debt authorized from $1,310,000,000 to
$2,135,000,000 as follows:
Company Amount
American $500,000,000
Appalachian 325,000,000
Columbus 300,000,000
Indiana 300,000,000
Kentucky 150,000,000
Generating 100,000,000
Kingsport 30,000,000
Ohio 400,000,000
Wheeling 30,000,000
Total: $2,135,000,000
The Companies also propose to extend this authority through
December 31, 2003. In addition, American seeks authority to
guarantee up to $40,000,000 principal amount of short-term debt of
American Electric Power Service Corporation ("AEPSC") its wholly-
owned subsidiary.
Therefore, the entire application on Form U-1 is amended and
restated as follows:
ITEM 1. DESCRIPTION OF TRANSACTIONS
A. Short-Term Indebtedness
The Companies hereby request authorization to incur short-term
indebtedness, from time to time during the period through December
31, 2003, through the issuance and sale of notes to banks and
commercial paper to dealers in commercial paper and AEP Generating
Company ("Generating"), Kingsport Power Company ("Kingsport"), and
Wheeling Power Company ("Wheeling") request authorization to incur
short-term indebtedness during such period through the issuance and
sale of notes to banks, as funds may be required, in an aggregate
amount not to exceed the amounts outstanding at any one time as
follows:
Company Amount
American $500,000,000
Appalachian 325,000,000
Columbus 300,000,000
Indiana 300,000,000
Kentucky 150,000,000
Generating 100,000,000
Kingsport 30,000,000
Ohio 400,000,000
Wheeling 30,000,000
The $500,000,000 authorization requested by American for
short-term indebtedness is in addition to the authority granted to
American in Release No. 35-36200 in File No. 70-8429 (December 22,
1994).
Notes to Banks and Commercial Paper
It is proposed that such notes and commercial paper will be
issued from time to time and be renewed from time to time prior to
January 1, 2004, as funds may be required, provided that no such
notes or commercial paper shall mature later than June 30, 2004.
American, Appalachian, Columbus, Generating, Indiana,
Kentucky, Kingsport, Ohio and Wheeling request authorization for an
increase in the exemption provided from the provisions of Section
6(a) by the first sentence of Section 6(b) of the Public Utility
Holding Company Act of 1935 (the "Act"), to the extent necessary to
cover such issuance and sale of notes to banks and commercial paper
under the conditions described herein.
American, Appalachian, Columbus, Generating, Indiana,
Kentucky, Kingsport, Ohio and Wheeling propose to issue and sell
such short-term notes during calendar years 1998, 1999, 2000, 2001,
2002 and 2003 to several domestic and non-domestic banks through
various "Credit Arrangements", including revolving credit
agreements or shared lines of credit. The shared lines of credit
with such banks are generally available to American, Appalachian,
Columbus, Indiana, Kentucky and Ohio, and are partially available
to Generating, Kingsport, and Wheeling. It is anticipated that, if
this Application or Declaration relating to short-term bank
borrowings through December 31, 2003 is granted as requested,
American, Appalachian, Columbus, Generating, Indiana, Kentucky,
Kingsport, Ohio and Wheeling will be authorized, or otherwise
permitted under Section 6(b), as the case may be, to borrow, in the
aggregate, amounts not to exceed $2,110,000,000 at any one time.
Notes to be issued to banks pursuant to the Credit
Arrangements will mature not more than 270 days after the date of
issuance or renewal thereof. Credit Arrangements with the banks
generally require the payment of a commitment fee. Facility fees
for shared lines of credit or revolving credit obligations are
generally borne by American and participating subsidiaries in
proportion to their respective projected maximum need for such
credit facilities.
American, Appalachian, Columbus, Generating, Indiana,
Kentucky, Kingsport, Ohio and Wheeling may, from time to time,
negotiate increases to existing Credit Arrangements or implemen-
tation of new agreements. Any company granted authority herein
will seek additional authorization from the Commission by Post-
Effective Amendment of any request for an increase in the maximum
amount of short-term indebtedness it proposes to incur.
Commercial paper will be sold directly by American,
Appalachian, Columbus, Indiana, Kentucky, or Ohio to dealers in
commercial paper. The commercial paper will be in the form of
promissory notes in denominations of not less than $50,000, and of
varying maturities, with no maturity more than 270 days after the
date of issue. Such notes will not be prepayable prior to maturity
and will be sold at a discount rate not in excess of the discount
rate per annum prevailing at the time of issuance for commercial
paper of comparable quality and maturity. American, Appalachian,
Columbus, Indiana and Ohio have designated Lehman Commercial Paper
Incorporated as one of their commercial paper dealers to purchase
and resell their commercial paper. Other dealers include Goldman
Sachs Money Markets (Indiana and Ohio), First Chicago Capital
Markets (Appalachian), Citicorp Securities Markets (Columbus),
Merrill Lynch Money Markets Inc. (Kentucky) and Morgan Stanley &
Co. (American, Columbus and Kentucky). American, Appalachian,
Columbus, Indiana, Kentucky and Ohio may designate different or
additional commercial paper dealers to purchase and resell their
commercial paper.
The commercial paper dealers will reoffer the commercial paper
to investors, generally at a discount rate of up to 1/8 of 1% per
annum less than the discount rate at which such commercial paper
notes were purchased from American, Appalachian, Columbus, Indiana,
Kentucky or Ohio. It is expected that the investors of the dealers
will hold the commercial paper notes to maturity. However, if any
such investor wishes to resell the commercial paper prior to
maturity, the dealers generally will repurchase such commercial
paper sold by them and reoffer it to other investors under
substantially the same terms and conditions as are herein
described.
American, Appalachian, Columbus, Indiana, Kentucky and Ohio
believe that by having flexibility to allocate short-term bor-
rowings between sales of notes to banks and sales of commercial
paper to dealers, they will be able to realize economies in meeting
their short-term financing requirements, and such companies
propose, in general, taking appropriate long and short-term
considerations into account, to utilize the most economical means
available at any time to meet their short-term financing require-
ments.
Letters of Credit
American, Appalachian, Columbus, Indiana, Kentucky, Ohio,
Generating, Kingsport and Wheeling also request authorization to
issue unsecured promissory notes or other evidence of their
reimbursement obligations in respect of letters of credit issued on
their behalf by certain banks. Letters of credit, together with
other short-term indebtedness authorized, would be in an aggregate
amount not to exceed the aggregate amounts authorized for each
company for short-term indebtedness for notes issued to banks as
set forth in the first paragraph of this ITEM 1. Drawings under
the letters of credit would bear interest at not more than 125% of
the prime commercial rate in effect from time to time. An annual
fee may be required for the issuance of such letters of credit.
Such fee will not exceed 1% of the face amount of such letter of
credit. Any such promissory note or other evidence of
reimbursement obligations would have a stated maturity date no
later than 270 days after the date of a draw on the related letter
of credit.
B. Guarantee of Indebtedness
American requests authorization herein to guarantee from time
to time through December 31, 2003 on behalf of its wholly-owned
subsidiary American Electric Power Service Corporation ("AEPSC") up
to $40,000,000 principal amount of short-term indebtedness through
the issuance and sale of notes to banks (the "Short-Term Notes") as
funds may be required with terms similar to those contained in the
proposed forms of Agreements attached as Exhibits A-1 and A-2;
provided that the aggregate amount of such guarantees shall not
exceed $40,000,000 at any one time outstanding. In order to induce
a lender to purchase the Short-Term Notes from AEPSC, American
proposes to unconditionally guarantee to pay any lender the amounts
due and unpaid by AEPSC.
C. Application of Proceeds
The proceeds of the short-term debt incurred by each of
American, AEPSC, Appalachian, Columbus, Generating, Indiana,
Kentucky, Kingsport, Ohio and Wheeling 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.
Unless the Commission orders to the contrary, the notes
payable to banks and commercial paper for which authorization is
requested herein will not necessarily be retired with the proceeds
of any permanent financing which may be authorized by the
Commission. Unless otherwise authorized by the Commission, any
short-term debt outstanding after December 31, 2003 will be retired
at or prior to June 30, 2004 from internal cash resources or with
the proceeds of such debt or equity financing or cash capital
contributions.
American desires to consummate the transactions covered by
this Application or Declaration because they are an integral part
in the financing of the American Electric Power System. It has
been the policy of the American Electric Power System to finance
the needs of the public utility operating subsidiaries for funds
additional to those generated internally by means of: (a) the use
of short-term indebtedness of the subsidiaries which is repaid from
the proceeds of long-term financing; (b) the issuance and sale to
the public or institutional investors of operating company senior
securities; and (c) additional investments in the form of capital
contributions, from time to time as required, in the public utility
subsidiaries by American.
D. Certificates of Notification
It is proposed that Certificates of Notification under Rule 24
shall be filed quarterly, with respect to the issuance by American,
Appalachian, Columbus, Generating, Indiana, Kentucky, Kingsport,
Ohio and Wheeling of notes to banks and, where authorized,
commercial paper and as to guaranties by American. Each such
certificate will include the following information with respect to
the issuance of notes and commercial paper:
(a) the principal amount of each note (notes to banks or
commercial paper) issued;
(b) the stated effective interest cost of each note issued
and the prime rate or range of generally prevailing prime
rates.
E. 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 Public Utility Holding Company Act of 1935, 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, American, through
its subsidiaries, 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 American reported on Form 10-K or Form 10-Q, as applicable, for
the four consecutive quarters ended September 30, 1997.
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 company subsidiaries 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 operating company 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 ($1,590,817,000)
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, American did not report operating losses
attributable to American'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 other expenses are to be paid or
incurred, directly or indirectly, by American, Appalachian,
Columbus, Generating, Indiana, Kentucky, Kingsport, Ohio or
Wheeling or any associated company in connection with the proposed
transactions, other than 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
American, Appalachian, Columbus, Generating, Indiana,
Kentucky, Kingsport, Ohio and Wheeling designate Sections 6(a) and
6(b) of the Act as applicable to the issuance and sale of notes to
banks and commercial paper to dealers. The basis of the exemption
from Section 6(a) of the issuance and sale of the above securities
under Section 6(b) is set forth in Item 1.
ITEM 4. REGULATORY APPROVALS
No commission other than the Securities and Exchange
Commission has jurisdiction over the transactions for which
authority is requested herein.
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
May 15, 1998. American, 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.
American, 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-1 Proposed form of Line of Credit
Agreement (previously filed)
Exhibit A-2 Proposed form of Revolving Credit
Agreement (previously filed)
Exhibit B None
Exhibit C None
Exhibit D None
Exhibit E None
Exhibit F Opinion of Counsel (previously filed)
Exhibit G-1 Form of Notice
(b) Financial Statements:
1. Balance Sheets as of December 31, 1997, and
Statements of Income and Retained Earnings for the 12 months
ended December 31, 1997, of American and its subsidiaries con-
solidated and of Generating, Appalachian, Columbus, Indiana,
Kentucky, Kingsport, Ohio and Wheeling (to be filed by
amendment).
2. Funds Flow Statements for American, Appalachian,
Columbus, Generating, Indiana, Kentucky, Kingsport, Ohio and
Wheeling for the years 1998, 1999, 2000, 2001, 2002 and 2003
(to be filed by amendment).
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: A. A. Pena
Treasurer
Dated: February 26, 1998
EXHIBIT G-1
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Release No. ______ / , 1998
:
In the Matter of :
:
AMERICAN ELECTRIC POWER COMPANY, INC., et al.:
1 Riverside Plaza :
Columbus, Ohio 43215 :
:
( ) :
:
NOTICE OF PROPOSED ISSUANCE AND SALE OF SHORT-TERM NOTES AND
GUARANTEE OF SHORT-TERM DEBT
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 Sections 6(a) and 6(b) of the Public Utility Holding
Company Act of 1935 ("Act") and Rules 45 and 54 under the Act.
By Commission order dated December 8, 1995 (HCAR No. 3526424),
the Commission authorized the Companies to incur short-term
indebtedness, through December 31, 2000, through the issuance and
sale of short-term notes in an aggregate amount not to exceed
$1,310,000,000. The Companies propose to increase the amount of
short term debt authorized to $2,135,000,000 and to extend the
authority to incur such indebtedness through December 31, 2003.
During the period ending December 31, 2003, American,
Appalachian, Columbus, Indiana, Kentucky and Ohio propose to
issue and sell short-term notes to banks and commercial paper to
dealers in aggregate principal amounts not to exceed $500
million, $325 million, $300 million, $300 million, $150 million,
and $400 million, respectively, outstanding at any one time.
Generating, Kingsport and Wheeling propose to issue and sell
short-term notes to banks in aggregate principal amounts not to
exceed $100 million, $30 million and $30 million, respectively,
outstanding at any one time during such period.
All bank notes will mature not more than 270 days after the date
of issuance or renewal. None will mature later than June 30,
2004. The notes to banks will be sold through various credit
arrangements, including revolving credit agreements or shared
lines of credit with different terms. Fees and balances for
credit arrangements are borne by the Companies in proportion to
their respective projected maximum need for such credit. With
such fees and with balances maintained solely to fulfill
borrowing requirements, no credit arrangement would result in an
effective cost of borrowing exceeding 125% of the prime
commercial rate in effect from time to time, or not more than
10.94% based on a prime rate of 8.75%.
The commercial paper notes to be sold by American, Appalachian,
Columbus, Indiana, Kentucky and Ohio will not be prepayable, will
have varying maturities not in excess of 270 days, and will be
sold directly to a dealer at a discount not in excess of the
discount rate per annum prevailing at the time of issuance for
commercial paper of comparable quality and maturity.
In addition, American requests authority through December 31,
2003 to guarantee short-term indebtedness of its wholly-owned
subsidiary American Electric Power Service Corporation ("AEPSC")
up to $40,000,000 principal outstanding at any one time through
the issuance and sale of notes to banks.
The proceeds from the borrowings by American, AEPSC, Appalachian,
Generating, Columbus, Indiana, Kentucky, Kingsport, Ohio, and
Wheeling will be used to pay their general obligations including
expenditures incurred in their various construction projects, and
for other corporate purposes.
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 May 15, 1998, 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
