File No. 70-8307
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. 14 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 RESOURCES SERVICE COMPANY
1 Riverside Plaza, Columbus, Ohio 43215
(Name of 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)
* * *
A. A. Pena, Treasurer
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
Susan Tomasky, 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., a registered holding company
("American") and its wholly owned subsidiary AEP Resources Service Company
("RESCO") , whose name was changed from AEP Energy Services, Inc. on March 7,
1997, hereby amend their Application on Form U-1 in File No. 70-8307 as follows:
1. By adding the following to the end of Part D. Investments in
AEPES, Financing and Guaranties under ITEM 1. DESCRIPTION OF PROPOSED
TRANSACTION:
"By orders dated April 5, 1995, December 28, 1995 and December 16,
1998 (HCAR Nos. 26267, 26442 and 26952, respectively) (the 'Orders') the
Commission authorized American, among other things, to: (1) guarantee the
debt of RESCO and its subsidiaries in an amount not to exceed $51 million
through December 31, 2001; and (2) issue guarantees and assumptions of
liability on behalf of RESCO and its subsidiaries to third parties in an
aggregate amount not to exceed $200 million through December 31, 2001
(collectively, the "Guarantee Authority"). American now requests authority
to (i) guarantee debt of RESCO to third parties in an amount not to exceed
$400,000,000 through June 30, 2004 and (ii) issue guarantees and
assumptions of liability on behalf of RESCO to third parties in an amount
not to exceed $400,000,000 through June 30, 2004. Guaranties may take the
form of an agreement by American to guarantee, undertake reimbursement
obligations, assume liabilities or other obligations with respect to, or
act as surety on, bonds, letters of credit, equity commitments,
performance and other obligations. The authority sought herein is
necessary, in part, because RESCO has entered an agreement with National
Power Cooperative, Inc. ('National'), an affiliate of Buckeye Power, Inc.,
to design, engineer, procure all materials and equipment and construct for
National a 510 megawatt gas-fired peaking unit. In addition, Applicants
are investigating several opportunities to, among other things, design,
engineer and procure equipment and materials to construct generating
stations and other projects relating to the generation, transmission and
distribution of electric power. All other terms relating to American's
authority to guarantee RESCO's debt and its subsidiaries' debt and other
obligations, as set forth in the Orders, remain unchanged. American's
authority to invest in RESCO and RESCO's authority to incur debt are
currently permitted under Rules 45 and 52 under the Public Utility Holding
Company Act of 1935 and therefore does not need to be extended." 2. By
amending and restating Part E. Compliance with Rule 54 under
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION:
"C. 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. 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 June 30, 1999, American, through its
subsidiary, Resources, had aggregate investment in FUCOs of $826,236,000.
This investment represents approximately 48.5% of $1,705,250,000, the
average of the consolidated retained earnings of American reported on
Forms 10-Q and 10-K for the four consecutive quarters ended June 30, 1999.
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 utility
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 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 ($1,705,250,000) represented an increase of
approximately $84,051,000 (or 5%) in the average consolidated retained
earnings from the previous four quarterly periods ($1,621,199,000); and
(iii) for the fiscal year ended December 31, 1998, 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 American,
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, Applicants 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 this statement to the end of ITEM 2. FEES,
COMMISSIONS AND EXPENSES:
"No additional expenses are expected to be incurred in
connection with this Post-Effective Amendment No. 14."
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned companies have duly caused this Amendment No. 14 to Form
U-1 to be signed on their behalf by the undersigned thereunto duly authorized.
AMERICAN ELECTRIC POWER COMPANY, INC.
AEP RESOURCES SERVICE COMPANY
By_/s/ A. A. Pena_____________
Treasurer
Dated: October 14, 1999
