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File No. 70-09623
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 2
TO
FORM U-1
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APPLICATION OR DECLARATION
under the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza, Columbus, Ohio 43215
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(Name of company or companies filing this statement
and address of principal executive office)
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AMERICAN ELECTRIC POWER COMPANY, INC.
1Riverside Plaza, Columbus, Ohio 43215 (Name of top
registered holding company parent of each applicant or
declarant)
* * *
A. A. Pena, Senior Vice President and Treasurer
American Electric Power Service Corporation
1 Riverside Plaza, Columbus, Ohio 43215
Susan Tomasky, Executive Vice President and General Counsel
American Electric Power Service Corporation
1 Riverside Plaza, Columbus, Ohio 43215
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(Names and addresses of agents for service)
American Electric Power Company, Inc. hereby amends its Declaration on
Form U-1, in File No. 70-09623, as follows:
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION
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By adding to Item 1 the following paragraph:
At the annual meeting of shareholders of American Electric Power
Company, Inc. ("AEP") held on April 26, 2000, the holders of a majority of
the shares of the Common Stock, $6.50 par value, of AEP outstanding and
entitled to vote duly voted to approve the American Electric Power System
2000 Long-Term Incentive Plan.
By amending Item 1, section D, to read as follows:
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. All applicable conditions of Rule 53(a) are currently
satisfied except for clause (1). As of March 31, 2000, AEP, through its
subsidiary, AEP Resources, Inc., had aggregate investment in FUCOs of
$918,907,000. This investment represents approximately 53.2% of
$1,727,264,000, the average of the consolidated retained earnings of AEP
reported on Forms 10-Q and 10-K for the four consecutive quarters ended
March 31, 2000. However, AEP 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. Although AEP's aggregate
investment exceeds the 50% 'safe harbor' limitation contained in Rule 53,
AEP's aggregate investment is below the 100% limitation authorized under
the 100% Order.
As of September 30, 1997, the most recent period for which financial
statement information was evaluated in the 100% Order, AEP's consolidated
capitalization consisted of 47.4% common and preferred equity and 52.6%
debt. As of March 31, 2000, AEP's consolidated capitalization consisted of
38.1% common and preferred equity and 61.9% debt. The requested
authorization will have no impact on AEP's consolidated capitalization
ratios on a pro forma basis. AEP believes this ratio remains within
acceptable ranges and limits. Further, AEP's interests in EWGs and FUCOs
have contributed positively to its consolidated earnings.
AEP will continue to maintain in conformity with United States
generally accepted accounting principles and make available the books and
records required by Rule 53(a)(2). AEP does, and will continue to, comply
with the requirement that no more than 2% of the employees of AEP's
operating utility subsidiaries shall, at any one time, directly or
indirectly, render services to an EWG or FUCO in which AEP directly or
indirectly owns an interest, satisfying Rule 53(a)(3). And lastly, AEP
will continue to submit a copy of Item 9 and Exhibits G and H of AEP's
Form U5S to each of the public service commissions having jurisdiction
over the retail rates of AEP's operating utility subsidiaries, satisfying
Rule 53(a)(4). Rule 53(c) is inapplicable by its terms because the
proposals contained herein do not involve the issue and sale of securities
(including any guarantees) to finance an acquisition of an EWG or FUCO.
Rule 53(b). (i) Neither AEP nor any subsidiary of AEP is the subject
of any pending bankruptcy or similar proceeding; (ii) AEP's average
consolidated retained earnings for the four most recent quarterly periods
($1,727,264,000) represented an increase of approximately $33,566,000 (or
2.0%) in the average consolidated retained earnings from the previous four
quarterly periods ($1,693,698,000); and (iii) for the fiscal year ended
December 31, 1999, AEP did not report operating losses attributable to
AEP's direct or indirect investments in EWGs and FUCOs.
As noted, AEP was authorized to invest up to 100% of its
consolidated retained earnings in EWGs and FUCOs. In connection with its
consideration of AEP's application for the 100% Order, the Commission
reviewed AEP's procedures for evaluating EWG or FUCO investments. Based on
projected financial ratios and on procedures and conditions established to
limit the risks to AEP involved with investments in EWGs and FUCOs, the
Commission determined that permitting AEP 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, 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.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
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The following exhibits are filed as part of this statement:
(a) Exhibit:
A Past-Tense opinion of counsel.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned company has duly caused this Amendment to be signed on its
behalf by the undersigned thereunto duly authorized.
AMERICAN ELECTRIC POWER COMPANY,INC.
By: /s/ A. A. Pena
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A. A. Pena
Treasurer
June 26, 2000
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EXHIBIT A
(614) 223-1628
June 26, 2000
Securities and Exchange Commission
Office of Public Utility Regulation
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
RE: American Electric Power Company, Inc.
Ladies and Gentlemen:
I have acted as counsel to American Electric Power Company, Inc. (the "Company")
in connection with a Declaration on Form U-1 of the Company (the "Declaration")
under the Public Utility Holding Company Act of 1935. In the Declaration, the
Company stated that it proposed to solicit proxies, to be voted at the Annual
Meeting of Shareholders of the Company to be held on April 26, 2000, with
respect to the election of directors, approval of auditors, and a proposal to
authorize approval of the American Electric Power System 2000 Long-Term
Incentive Plan ("2000 Plan") (the "Proposal").
I have been informed by the Company that the 2000 annual meeting of shareholders
of the Company was duly called and held on April 26, 2000, at which a quorum was
present in person or by proxy and acting throughout; and that at such meeting
holders of a majority of the shares of Common Stock outstanding and entitled to
vote duly voted to authorize approval of the 2000 Plan.
In this connection, I have examined the Charter and By-Laws of the Company and
the 2000 Plan and have made such other investigations as I deemed necessary.
Based on the foregoing, it is my opinion that:
1. The Company is a corporation validly organized and duly existing
under the laws of the State of New York; and
2. In the event that the Proposal is effected in accordance with the
Declaration, (a) all state laws applicable to the proposed
transaction will have been complied with, (b) the consummation of
the proposed transaction will not violate the legal rights of the
holders of any securities issued by the Company or any associate
company thereof, (c) shares of Common Stock issued and sold by
the Company pursuant to the 2000 Plan will be validly issued, full
paid and nonassessable, and the holders thereof will be entitled to
the rights and privileges appertaining thereto set forth in the
Charter and (d) the Company will legally acquire any shares of its
Common Stock necessary for the operation of the 2000 Plan.
I consent to this opinion being filed as an exhibit to the Company's Amendment
No. 2 to its Declaration in the above file under the Public Utility Holding
Company Act of 1935.
Very truly yours,
s\Thomas S. Ashford
Thomas S. Ashford