File No. 70-9145
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
__________________________________
AMENDMENT NO. 5
TO
FORM U-1
__________________________________
APPLICATION OR DECLARATION
under the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
* * *
AMERICAN ELECTRIC POWER COMPANY, INC.
AEP RESOURCES, INC.
AEP RESOURCES SERVICE COMPANY
AEP ENERGY SERVICES, 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
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., a holding company
registered under the Public Utility Holding Company Act of 1935, as
amended, AEP Resources, Inc., AEP Resources Service Company and AEP
Energy Services, Inc., wholly-owned non-utility subsidiaries of
American, hereby amend their Application or Declaration on Form U-1
in File No. 70-9145 as follows:
1. By amending and restating the first paragraph of Item
1.B.(5):
"American may guarantee to a third party the obligations
of Resources to invest up to $250 million in the Capital Company
and up to $50 million in the Management Company through December
31, 2002. The third parties to whom American may issue guarantees
include potential joint venture partners and customers. For
example, American may guarantee Resources' obligation to invest in
Capital Company in order to persuade a third party to invest in a
joint venture with Capital Company that will purchase Energy
Facilities."
2. By amending and restating Item 1.B.(6):
"(6) Additional Subsidiaries
Resources may form special purpose subsidiaries to hold
its interests in Management Company and Capital Company. American
and Resources may guarantee the obligations
FN1 These obligations may include financing, debt and non-debt
performance obligations. Any such debt financing will be
subject to the same terms and conditions as those governing
debt financing by Management Company and Capital Company set
forth in Item 1.B.(5).
of these subsidiaries. Any such guarantees, when added to the debt
and other obligations of Management Company and Capital Company
guaranteed by American or Resources, will not exceed the $250
million aggregate guarantee limit specified in Item 1.B.(5).
From time to time it may be advantageous for Capital
Company or Management Company to form subsidiaries to undertake one
or more of the activities described herein. These subsidiaries may
be organized (i) in order to facilitate the making of proposals to
a prospective customer; or (ii) after the award of a bid proposal,
in order to facilitate closing on the purchase or financing of the
underlying assets; or (iii) at any time after the consummation of
a transaction in order, among other things, to comply with
applicable federal or state laws; or (iv) as part of tax planning,
to limit exposure to U.S. and state taxes; or (v) for other lawful
business purposes. American, Resources, Capital Company and
Management Company may guarantee the debt and other obligations of
these subsidiaries.
FN2 Any amounts so guarantied will count against the total amount
of guaranties authorized herein.
In addition, Management Company, Capital Company, AEPSC, the
Utility Subsidiaries, RESCo, AEPES and other subsidiaries of
Resources may provide services to Management and Capital Company's
special purpose subsidiaries upon the same terms and conditions
that they could provide services to Management Company and Capital
Company. No special purpose subsidiary or subsidiary of Management
Company or Capital Company will be a public utility company as
defined in the 1935 Act, and, without further Commission approval,
no such subsidiary will undertake any activity if, as a result, it
would become a public utility company as defined in the 1935 Act."
3. By amending and restating Item 1C:
"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 March 31, 1999, American, through its
subsidiary, Resources, had aggregate investment in FUCOs of
$823,265,000. This investment represents approximately 48.6% of
$1,693,698,000, the average of the consolidated retained earnings
of American reported on Forms 10-Q and 10-K for the four
consecutive quarters ended March 31, 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 ($1,693,698,000)
represented an increase of approximately $19,477,000 (or 1%) in the
average consolidated retained earnings from the previous four
quarterly periods ($1,674,221,000); 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 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, 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."
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.
AEP RESOURCES SERVICE COMPANY
AEP ENERGY SERVICES, INC.
By_/s/ A. A. Pena___________
Treasurer
Dated: July 13, 1999
