File No. 70-6171
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
POST-EFFECTIVE AMENDMENT NO. 26
TO
FORM U-1
__________________________________
APPLICATION OR DECLARATION
under the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
* * *
APPALACHIAN POWER COMPANY
40 Franklin Road, Roanoke, Virginia 24011
(Name of company 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, Senior Vice President
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)
The undersigned Appalachian Power Company ("Appalachian"), a
wholly-owned utility subsidiary of American Electric Power Company, Inc.
("AEP"), a holding company registered under the Public Utility Holding
Company Act of 1935 ("1935 Act"), hereby amends as follows its Application or
Declaration on Form U-1 in File No. 70-6171, as heretofore amended:
1. By adding the following paragraphs to the end of Item 1 of said
Form U-1:
"It is proposed that the County will issue and sell an additional
series of Bonds in the aggregate principal amount of up to $30,000,000
(the 'Series K Bonds'), the proceeds of which will be used to provide
for the early redemption of $30,000,000 principal amount of Bonds of
the County, bearing interest at 7.40% and maturing on January 1, 2014
(the 'Series G Bonds'). It is contemplated that the Series K Bonds
will be issued pursuant to the Indenture as supplemented by a Tenth
Supplemental Indenture of Trust between the County and the Trustee, the
form of which is filed as Exhibit B-11 hereto ('Supplemental
Indenture'). Pursuant to the Indenture and the Supplemental Indenture,
the proceeds of the sale of the Series K Bonds will be deposited by the
County with the Trustee and applied by the Trustee to the payment at no
greater than 102.00% of the entire $30,000,000 principal amount of
Series G Bonds.
The Series G Bonds may be redeemed beginning January 1, 2000 at a
redemption price of 102.00%. Appalachian may consider the payment of
such premium prudent in light of the amounts of interest expense that
could be saved by early redemption thereof, and proposes to treat a
portion of said premium corresponding to the West Virginia jurisdiction
as an issuance expense of the Series K Bonds to be amortized over the
life of the Series K Bonds. Appalachian intends to utilize deferred
tax accounting for the amortized portion of the premium expense, in
order to properly match the amortization of the expense and related tax
effect.
It is contemplated that the Series K Bonds will be sold by the
County pursuant to arrangements with a group of underwriters. While
Appalachian will not be a party to the underwriting arrangements for
the Series K Bonds, the Agreement provides that the Series K Bonds
shall have such terms as shall be specified by Appalachian.
Appalachian understands that interest on the Series K Bonds will be
exempt from Federal income taxation under the provisions of Section 103
of the Internal Revenue Code of 1986, as amended (except for interest
on any Series K Bond during a period in which it is held by a person
who is a substantial user of the Project or a related person).
Appalachian is advised that the Series K Bonds will bear interest
semi-annually. It is expected that the Series K Bonds will mature at a
date or dates not more than 40 years from the date of their issuance.
The Series K Bonds may be subject to mandatory redemption under the
circumstances and terms specified in the Supplemental Indenture,
including, if it is deemed advisable, a sinking fund provision. In
addition, the Series K Bonds may not, if it is deemed advisable, be
redeemable at the option of the County in whole or in part at any time
for a period of up to forty years. If it is deemed advisable, the
Series K Bonds may be provided some form of credit enhancement, such as
a letter of credit, surety bond or bond insurance, any of which may
necessitate a fee be paid in connection therewith. The Series K Bonds
will be on a parity with and secured in the same manner as the other
Series issued pursuant to the Indenture.
It is not possible to predict precisely the interest rate which
may be obtained in connection with the issuance of the Series K Bonds.
However, Appalachian has been advised that, depending on maturity and
other factors, the annual interest rate on obligations, interest on
which is excludable from gross income, historically have been, and can
be expected at the time of issuance of the Series K Bonds to be, 1-1/2%
to 2-1/2% or more lower than the rates of obligations of like terms and
comparable quality, interest on which is fully subject to Federal
income tax. Moreover, Appalachian will not agree, without further
Order of this Commission, to the issuance of any Series K Bond by the
County (i) if the stated maturity of any such Bond shall be more than
forty (40) years; (ii) if the rate of interest to be borne by any such
Bond shall exceed 8% per annum; (iii) if the discount from the initial
public offering price of any such Bond shall exceed 5% of the principal
amount thereof; or (iv) if the initial public offering price shall be
less than 95% of the principal amount thereof. Appalachian will not
enter into the proposed refunding transaction unless the estimated
present value savings derived from the net difference between interest
payments on a new issue of comparable securities and on the securities
to be refunded is, on an after tax basis, greater than the present
value of all redemption and issuing costs, assuming an appropriate
discount rate. The discount rate used shall be the estimated after-tax
interest rate on the Series K Bonds to be issued.
Since Appalachian believes that every effort should be made to
minimize, to the extent possible, carrying costs of facilities employed
by Appalachian in the rendition of utility services and the County will
apply the funds derived from the issuance of Series K Bonds to the
payment of up to $30,000,000 aggregate principal amount of Series G
Bonds, Appalachian believes that the public interest will be served by
the issuance of the Series K Bonds.
Appalachian believes that the consummation of the transactions
herein proposed will be in the best interests of Appalachian's
consumers and investors and consistent with sound and prudent financial
policy. Moreover, because the proceeds from the sale of the Series K
Bonds will be deposited by the County with the Trustee and will be
applied to the payment of up to $30,000,000 aggregate principal amount
of Series G Bonds, none of the proceeds of the sale of the Series K
Bonds will be received by Appalachian.
The transactions described herein will be consummated no later
than January 1, 2000.
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, AEP, through its
subsidiary, AEP Resources, Inc., 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 AEP
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 AEP 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
CompaniesFN1 of AEP will, at any one time, directly or indirectly, render
services to any FUCO.
FN1 Appalachian, Columbus Southern Power Company, Kentucky Power Company,
Kingsport Power Company, Indiana Michigan Power Company, Ohio Power
Company and Wheeling, electric utility subsidiaries of AEP (sometimes
collectively referred to herein as 'Operating Companies'). AEP is
primarily engaged, through the Operating Companies, in the generation,
transmission and distribution of electric energy. The Operating
Companies operate an integrated public utility system that provides
service in Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and
West Virginia.
Rule 53(a)(4). AEP has submitted and will 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
Companies.
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
($1,693,698,000) represented an increase of approximately $19,477,000 (or 1%)
in the average consolidated retained earnings from the previous four
quarterly periods ($1,674,221,000); and (iii) for the fiscal year ended
December 31, 1998, AEP did not report operating losses attributable to AEP's
direct or indirect investments in EWGs and FUCOs.
AEP was authorized to invest up to 100% of its consolidated retained
earnings in EWGs and FUCOs (HCAR No. 26864, April 27, 1998) (the '100%
Order') in File No. 70-9021. In connection with its consideration of AEP's
application for the 100% Order, the Commission reviewed AEP's procedures for
evaluating EWG or FUCO investments. Based on projected financial ratios and
on procedures and conditions established to limit the risks to AEP involved
with investments in EWGs and FUCOs, the Commission determined that permitting
AEP to invest up to 100% of its consolidated retained earnings in EWGs and
FUCOs would not have a substantial adverse impact upon the financial
integrity of the AEP System, nor would it have an adverse impact on any of
the Operating Companies or their customers, or on the ability of state
commissions to protect the Operating Companies or their customers."
2. By supplying the following list of estimated expenses with
respect to the transactions contemplated in Post-Effective Amendment No. 26:
Printing Official Statement, etc..............................$ 25,000
Independent Auditors' Fees.................................... 15,000
Charges of Trustee (including counsel fees)................... 20,000
Legal Fees.................................................... 110,000
Underwriter Fees.............................................. 375,000
Rating Agency Fees............................................ 40,000
Insurance or Credit Enhancement Costs......................... 640,000
Miscellaneous Expenses........................................ 30,000
TOTAL.............................................$1,255,000
3. By adding the following paragraph to the end of Item 4 of said
Form U-1:
"The proposed issuance of the Series K Bonds is the subject of an
application to, and has been authorized by, the Virginia State Corporation
Commission."
4. By adding the following paragraph at the end of Item 5 of said
Form U-1:
It is requested, pursuant to Rule 23(c) of the Rules and Regulations of
the Commission, that the Commission's order granting and permitting to become
effective this Application or Declaration be issued on or before August 1,
1999. Appalachian waives any recommended decision by a hearing officer or by
any other responsible officer of the Commission and waives 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. Appalachian consents to the Division of
Investment Management assisting in the preparation of the Commission's
decision and/or order in this matter, unless the Division opposes the matter
covered by this Application or Declaration."
5. By supplying the following exhibits:
Exhibit B-11 Form of Tenth Supplemental Indenture between
the County and the Trustee
Exhibit D-18 Copy of Application to State Corporation
Commission of Virginia
Exhibit D-19 Copy of Order of State Corporation Commission
of Virginia
Exhibit H-4 Form of Notice
(b) Financial Statements:
It is believed that financial statements of Appalachian and AEP and its
subsidiaries are not necessary or relevant to the disposition of this
proceeding."
6. By adding the following paragraph at the end of Item 7 of said
Form U-1:
"It is believed that the granting and permitting to become effective 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 transaction."
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly caused this
Post-Effective Amendment No. 26 to be signed on its behalf by the undersigned
thereunto duly authorized.
APPALACHIAN POWER COMPANY
By /s/ A. A. Pena
Vice President
Dated: July 2, 1999
Exhibit B-11
TENTH SUPPLEMENTAL INDENTURE OF TRUST
BETWEEN
MASON COUNTY, WEST VIRGINIA
and
ONE VALLEY BANK, NATIONAL ASSOCIATION
(Formerly Kanawha Valley Bank, N.A.)
Trustee
Dated as of __________ __, 1999
THIS TENTH SUPPLEMENTAL INDENTURE OF TRUST (the "Tenth Supplemental
Indenture"), made as of the __________ day of __________, 1999, by and
between MASON COUNTY, WEST VIRGINIA, a political subdivision of the State of
West Virginia, by and through its County Commission (the "County"), and ONE
VALLEY BANK, NATIONAL ASSOCIATION (formerly Kanawha Valley Bank, N.A.), a
national banking association within the State of West Virginia, organized,
existing and authorized to accept and execute trusts of the character herein
set out under and by virtue of the laws of the United States, with its
principal corporate trust office located in Charleston, West Virginia, as
Trustee (the "Trustee");
W I T N E S S E T H :
WHEREAS, the County has issued $40,000,000 aggregate principal amount
of its Pollution Control Revenue Bonds (Appalachian Power Company Project),
Series A (the "Series A Bonds"), pursuant to the Industrial Development and
Commercial Development Bond Act, Chapter 13, Article 2C, of the West Virginia
Code, as amended (the "Act"), under the Indenture of Trust dated as of July
1, 1978 (the "Indenture"), between the County and the Trustee for the purpose
of acquiring, constructing, installing, equipping and financing, in part,
certain facilities designed for the abatement or control of atmospheric and
water pollution (the "Project") at Units 1 and 3 (the "Sporn Plant") of
Appalachian Power Company (the "Company") at the Philip Sporn Generating
Station located in the County and the Company's Mountaineer Generating
Station (the "Mountaineer Plant") located in the County (the Sporn Plant and
Mountaineer Plant are herein referred to as the "Plants"), which were sold to
the Company pursuant to an Agreement of Sale dated as of July 1, 1978 (the
"Agreement") between the County and the Company; and
WHEREAS, the County has issued $50,000,000 aggregate principal amount
of its Pollution Control Revenue Bonds (Appalachian Power Company Project),
Series B (the "Series B Bonds"), as Additional Bonds pursuant to Section 2.10
of the Indenture and a First Supplemental Indenture of Trust dated as of June
1, 1979 between the County and the Trustee (the "First Supplemental
Indenture") to provide additional funds to finance a portion of the estimated
Cost of Construction of the Project, as defined in the Agreement, not
theretofore paid by the application of the Series A Bonds' proceeds; and
WHEREAS, the County has issued $40,000,000 aggregate principal amount
of its Pollution Control Revenue Bonds (Appalachian Power Company Project),
Series C (the "Series C Bonds"), as Additional Bonds pursuant to Section 2.10
of the Indenture and a Second Supplemental Indenture of Trust dated as of
February 1, 1981 between the County and the Trustee (the "Second Supplemental
Indenture") to provide additional funds to finance a portion of the estimated
Cost of Construction of the Project, as defined in the Agreement, not
theretofore paid by the application of the Series A or Series B Bonds'
proceeds; and
WHEREAS, the County has issued $30,000,000 aggregate principal amount
of its Pollution Control Revenue Bonds (Appalachian Power Company Project),
Series D (the "Series D Bonds"), as Refunding Bonds pursuant to Section 2.11
of the Indenture and a Third Supplemental Indenture of Trust dated as of
January 1, 1984 between the County and the Trustee (the "Third Supplemental
Indenture") to refund $30,000,000 aggregate principal amount of Series C
Bonds which matured on February 1, 1984; and
WHEREAS, the County has issued $30,000,000 aggregate principal amount
of its Pollution Control Revenue Bonds (Appalachian Power Company Project),
Series E (the "Series E Bonds"), as Refunding Bonds pursuant to Section 2.11
of the Indenture and a Fourth Supplemental Indenture of Trust dated as of
April 1, 1984 between the County and the Trustee (the "Fourth Supplemental
Indenture") to refund the Series D Bonds which matured on May 1, 1984; and
WHEREAS, the County has issued $30,000,000 aggregate principal amount
of its Pollution Control Revenue Bonds (Appalachian Power Company Project),
Series F (the "Series F Bonds"), as Refunding Bonds pursuant to Section 2.11
of the Indenture and a Fifth Supplemental Indenture of Trust dated as of
March 1, 1985 between the County and the Trustee (the "Fifth Supplemental
Indenture") to refund the Series E Bonds which matured on April 1, 1985; and
WHEREAS, the County has issued $30,000,000 aggregate principal amount
of its Pollution Control Revenue Bonds (Appalachian Power Company Project),
Series G (the "Series G Bonds"), as Refunding Bonds pursuant to Section 2.11
of the Indenture and a Sixth Supplemental Indenture of Trust dated as of
January 1, 1990 between the County and the Trustee (the "Sixth Supplemental
Indenture") to refund the Series F Bonds which matured on March 1, 1990; and
WHEREAS, the County has issued $10,000,000 aggregate principal amount
of its Pollution Control Revenue Bonds (Appalachian Power Company Project),
Series H (the "Series H Bonds"), as Refunding Bonds pursuant to Section 2.11
of the Indenture and a Seventh Supplemental Indenture of Trust dated as of
October 15, 1990 between the County and the Trustee (the "Seventh
Supplemental Indenture") to refund $10,000,000 aggregate principal amount of
Series C Bonds at their redemption on February 1, 1991; and
WHEREAS, the County has issued $40,000,000 aggregate principal amount
of its Pollution Control Revenue Bonds (Appalachian Power Company Project),
Series I (the "Series I Bonds"), as Refunding Bonds pursuant to Section 2.11
of the Indenture and an Eighth Supplemental Indenture of Trust dated as of
May 15, 1992 between the County and the Trustee (the "Eighth Supplemental
Indenture") to refund the Series A Bonds at their redemption on August 1,
1992; and
WHEREAS, the County has issued $50,000,000 aggregate principal amount
of its Pollution Control Revenue Bonds (Appalachian Power Company Project),
Series J (the "Series J Bonds"), as Refunding Bonds pursuant to Section 2.11
of the Indenture and a Ninth Supplemental Indenture of Trust dated as of
September 15, 1992 between the County and the Trustee (the "Ninth
Supplemental Indenture") to refund the Series B Bonds at their redemption on
December 1, 1992; and
WHEREAS, the County has determined to issue $30,000,000 aggregate
principal amount of its Pollution Control Revenue Bonds (Appalachian Power
Company Project), Series K (the "Series K Bonds"), as Refunding Bonds
pursuant to Section 2.11 of the Indenture to refund the Series G Bonds at
their redemption on January 1, 2000; and
WHEREAS, the County has determined in the resolution authorizing the
issuance of the Series K Bonds that the statutory mortgage lien provided by
Section 13-2C-8 of the Act shall not be applicable to the Project or this
financing; and
WHEREAS, the County has determined that the Series K Bonds issuable
hereunder, and the certificate of authentication by the Trustee to be
endorsed on all Series K Bonds shall be, respectively, substantially in the
following forms with such variations, omissions and insertions as are
required or permitted by the Indenture or this Tenth Supplemental Indenture:
(FORM OF FRONT OF BOND)
No. R-______ $___________
UNITED STATES OF AMERICA
STATE OF WEST VIRGINIA
MASON COUNTY
POLLUTION CONTROL REVENUE BOND
(APPALACHIAN POWER COMPANY PROJECT)
SERIES K
MATURITY DATE: _________ __, ____ CUSIP: 575200 __ _
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
Mason County, a political subdivision of the State of West Virginia, by
and through its County Commission (the "County"), for value received, hereby
promises to pay, solely from the source and as hereinafter provided, to the
registered owner stated above, or registered assigns or legal
representatives, upon presentation and surrender hereof at the principal
office of One Valley Bank, National Association (formerly Kanawha Valley
Bank, N.A.), as Trustee, or its successor in trust (the "Trustee"), in
Charleston, West Virginia, or, at the option of the registered owner hereof,
at the principal office of such paying agent as may be designated pursuant to
the Indenture hereinafter referred to, the principal sum stated above on the
maturity date stated above, subject to prior redemption as hereinafter
provided, and to pay from such source to the registered owner hereof interest
hereon by check or draft mailed to the registered owner at his address as it
appears on the registration books kept by the Trustee, as Bond Registrar,
such interest payable semiannually on ________ __ and ________ __ of each
year, commencing ________ __, ____, from the ________ __ or ________ __, as
the case may be, next preceding the date on which this Bond is authenticated,
unless this Bond is authenticated prior to ________ __, ____, in which case
it will bear interest from ________ __, ____, or unless this Bond is
authenticated on an ________ __ or ________ __, in which case it will bear
interest from such ________ __ or ________ __, as the case may be, until
payment of said principal sum at the rate of ______________________________
per centum (______%) per annum. Both principal and interest are payable in
lawful money of the United States of America.
This Bond and the issue of which it is a part and the interest thereon
are limited obligations of the County payable solely from the revenues and
receipts derived from the Agreement of Sale hereinafter referred to (except
to the extent paid from Bond proceeds and income from temporary investments),
which revenues and receipts (except for payments of County expenses under
Section 4.3 of the Agreement of Sale and payments for indemnification under
Sections 4.5 and 6.1 of the Agreement of Sale) have been pledged and assigned
to the Trustee to secure payment thereof. The Bonds and the interest thereon
and any other obligation, agreement, covenant or representation contained in
the Indenture hereinafter referred to shall never constitute an indebtedness
of the County or the State of West Virginia within the meaning of the
Constitution of West Virginia or of any constitutional provision or statutory
limitation and shall never constitute or give rise to or impose any pecuniary
liability of the County or the State of West Virginia. Neither shall the
Bonds, the interest thereon nor the costs incident thereto be a charge
against the general credit or taxing power of the County or the State of West
Virginia. Neither the County, the State of West Virginia nor any other
political subdivision thereof shall be obligated to pay the principal, and
premium (if any) of the Bonds, the interest thereon or other costs incident
thereto except from the revenues and receipts pledged therefor.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET
FORTH ON THE REVERSE SIDE HEREOF WHICH, FOR ALL PURPOSES HEREOF, SHALL HAVE
THE SAME FORCE AND EFFECT AS IF PRINTED IN FULL ON THE FRONT HEREOF.
This Bond shall not become obligatory for any purpose or be entitled to
any security or benefit under the Indenture or be valid until the Trustee
shall have manually executed the Certificate of Authentication appearing
hereon.
IN WITNESS WHEREOF, Mason County, West Virginia, by and through its
County Commission, has caused this Bond to be signed by the manual or
facsimile signature of the President of its County Commission, the seal,
which may be the facsimile seal, of its County Commission to be printed
hereon and attested by the manual or facsimile signature of the Clerk of its
County Commission, and this Bond to be dated as of __________ __, ____.
COUNTY COMMISSION OF MASON COUNTY
By______________________________________
President
(SEAL)
Attest:
______________________________
Clerk
(FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This Bond is one of the Bonds of the Series described in the
within-mentioned Indenture.
ONE VALLEY BANK, NATIONAL ASSOCIATION
as Trustee
By_________________________________
Authorized Officer
Date: _______________________
(FORM OF REVERSE OF BOND)
This Bond is one of an issue of $50,000,000 Mason County, West
Virginia, Pollution Control Revenue Bonds (Appalachian Power Company
Project), Series K (the "Bonds"), of like date and tenor, except as to number
and principal amount, authorized and issued pursuant to the Industrial
Development and Commercial Development Bond Act (Chapter 13, Article 2C, of
the West Virginia Code, as amended) for the purpose of refunding certain
Pollution Control Revenue Bonds (Appalachian Power Company Project), Series
G, which were previously issued by the County for the purpose of its
acquisition, construction, installation, equipping and financing of certain
facilities for the abatement or control of atmospheric and water pollution
and the disposal of solid waste (the "Project") located within the County at
Units 1 and 3 of Appalachian Power Company, a Virginia corporation (the
"Company"), at the Philip Sporn Generating Station and at the Company's
Mountaineer Generating Station (Units 1 and 3 of the Philip Sporn Generating
Station and the Mountaineer Generating Station being collectively referred to
as the "Plants"), and sale of the same to the Company pursuant to an
Agreement of Sale dated as of July 1, 1978 (the "Agreement of Sale"), between
the County and the Company. The Bonds are issued under and, together with
other series of bonds, are equally and ratably secured by an Indenture of
Trust dated as of July 1, 1978, as supplemented and amended, and as
supplemented and amended by a Tenth Supplemental Indenture of Trust dated as
of ________ __, ____ (the Indenture of Trust as supplemented and amended
being referred to herein as the "Indenture"), between the County and the
Trustee which assigns to the Trustee, as security for the Bonds, the County's
rights under the Agreement of Sale (except for payment of County expenses and
for indemnification of the County). Reference is hereby made to the
Indenture, the Agreement of Sale and to all amendments and supplements
thereto for a description of the provisions, among others, with respect to
the nature and extent of the security, the rights, duties and obligations of
the County and the Trustee and the rights of the owners of the Bonds and the
terms upon which the Bonds are issued and secured. Additional bonds and
refunding bonds ranking equally with the Bonds and other bonds issued under
the Indenture may be issued on the terms provided in the Indenture.
The Bonds may not be called for redemption by the County prior to
________ __, ____, except that in the event of the exercise by the Company of
its option to prepay the entire purchase price of the Project under
circumstances involving (i) the imposition of unreasonable burdens or
excessive liabilities on the Company or the County with respect to the
Project or either of the Plants, or the operation of the Project or either of
the Plants, including taxes not imposed on July 1, 1978, and economic,
technological or other changes making the continued operation of either or
both of the Plants uneconomical in the opinion of the Company's Board of
Directors; (ii) damage to or destruction of the Project or a portion thereof
or all or a portion of either or both of the Plants to such an extent that
the Company deems it not practicable and desirable to rebuild, repair and
restore the Project, a Plant, or the Plants, as the case may be; (iii)
condemnation of all or substantially all of the Project or all or a portion
of either or both of the Plants so as to render the Project unsatisfactory to
the Company for its intended use; or (iv) the operation of either of the
Plants being enjoined and the Company decides to discontinue operation
thereof, all as provided in Section 8.1(b)(i) through (iv) of the Agreement
of Sale, the Bonds are subject to redemption in whole, but not in part, at
any time upon payment of 100% of the principal amount thereof plus interest
accrued to the redemption date but without premium.
The Bonds are subject to optional redemption by the County prior to
maturity on or after ________ __, ____, at any time in whole or in part (less
than all of the Bonds to be redeemed to be selected by lot by the Trustee)
upon payment of the following redemption prices (expressed as a percentage of
the principal amount of Bonds to be redeemed) plus accrued interest to the
redemption date:
Redemption Dates Redemption
(Dates Inclusive) Price
If less than all of the Bonds are called for redemption, each $5,000
principal amount of a Bond having a principal amount of more than $5,000
shall be counted as one Bond for the purpose of selecting by lot.
If any of the Bonds or portions thereof are called for redemption, the
Trustee shall cause a notice thereof to be sent by registered or certified
mail to the registered owner of the Bonds not less than 30 nor more than 60
days prior to the redemption date. Provided funds for their redemption are
on deposit at the place of payment at that time, all Bonds or portions
thereof so called for redemption shall cease to bear interest on the
redemption date, shall no longer be secured by the Indenture and shall not be
deemed to be outstanding under the provisions of the Indenture. If a portion
of this Bond shall be called for redemption, a new Bond in principal amount
equal to the unredeemed portion hereof will be issued to the registered owner
upon the surrender hereof.
The owner of this Bond shall have no right to enforce the provisions of
the Indenture or to institute action to enforce the covenants therein or to
take any action with respect to any Event of Default under the Indenture or
to institute, appear in or defend any suit or other proceeding with respect
thereto, except as provided in the Indenture. In certain events, on
conditions, in the manner and with the effect set forth in the Indenture, the
principal of all the Bonds issued under the Indenture and then outstanding
may become or may be declared due and payable before their stated maturities,
together with interest accrued thereon. Modifications or alterations of the
Indenture, or of any supplements thereto, may be made only to the extent and
in the circumstances permitted by the Indenture.
The Bonds are issuable as registered bonds without coupons in the
denominations of $5,000 and any integral multiple thereof.
The transfer of this Bond may be registered by the registered owner
hereof in person or by his duly authorized attorney or legal representative
at the principal office of the Trustee, but only in the manner and subject to
the limitations and conditions provided in the Indenture and upon surrender
and cancellation of this Bond. Upon any such registration of transfer the
County shall execute and the Trustee shall authenticate and deliver in
exchange for this Bond a new Bond or Bonds, registered in the name of the
transferee, of authorized denominations. The Bond Registrar shall, prior to
due presentment for registration of transfer, treat the registered owner as
the person exclusively entitled to payment of principal and interest and the
exercise of all other rights and powers of the owner.
All acts, conditions and things required to happen, exist or be
performed precedent to the issuance of this Bond have happened, exist and
have been performed.
[FORM OF ABBREVIATIONS]
The following abbreviations, when used in the inscription on the face
of the within Bond, shall be construed as though they were written out in
full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right
of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
Under Uniform Gifts to Minors Act
(State)
Additional abbreviations may also be used though not in list above.
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto __________________________________
(Please insert Social Security or taxpayer identification number of assignee)
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
(Please Print or Typewrite Name and Address of Assignee)
____________________________________________________________
the within Bond, and all rights thereunder, and hereby does irrevocably
constitute and appoint___________________________
Attorney to transfer the within Bond on the books kept for the registration
thereof, with full power of substitution in the premises.
Dated:
___________________________________________
NOTICE: The signature to this assignment must
correspond with the name as it appears on the face of
the within Bond in every particular, without
alteration or enlargement or any change whatever.
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by a member firm of the New York Stock
Exchange or a commercial bank or trust
company; and
WHEREAS, all things necessary have been done and performed to make the
Series K Bonds, when issued and authenticated by the Trustee, valid, binding
and legal limited obligations of the County and to constitute this Tenth
Supplemental Indenture a valid and binding agreement securing the payment of
the principal of, premium, if any, and interest on all bonds issued and to be
issued hereunder and under the Indenture (the Indenture, as supplemented by
the First Supplemental Indenture, the Second Supplemental Indenture, the
Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth
Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh
Supplemental Indenture, the Eighth Supplemental Indenture, the Ninth
Supplemental Indenture and this Tenth Supplemental Indenture, being referred
to herein as the "Indenture") and the execution and delivery of this Tenth
Supplemental Indenture and the execution and issuance of the Series K Bonds
have in all respects been authorized; and
WHEREAS, the County has requested the Trustee to enter into this Tenth
Supplemental Indenture and the Company has consented to the execution and
delivery of this Tenth Supplemental Indenture;
NOW, THEREFORE, the County hereby agrees and covenants with the Trustee
and with the respective holders and owners, from time to time of the Series
H, Series I, Series J and the Series K Bonds or coupons thereon, or any
thereof, as follows:
ARTICLE I
PURPOSE OF SERIES K BONDS
SECTION 1.01. Purpose of Series K Bonds. The Series K Bonds of the
County are authorized for the purpose of refunding $30,000,000 aggregate
principal amount of the Series G Bonds at their redemption on January 1, 2000.
ARTICLE II
THE SERIES K BONDS
SECTION 2.01. Issuance of Series K Bonds. There are hereby authorized
to be issued Pollution Control Revenue Bonds of the County in the aggregate
principal amount of Thirty Million Dollars ($30,000,000) as Refunding Bonds
pursuant to Section 2.11 of the Indenture. Said Bonds shall be designated
"Mason County, West Virginia Pollution Control Revenue Bonds (Appalachian
Power Company Project), Series K", shall be dated as of ________ __, ____,
shall bear interest payable semiannually on the first days of ________ and
________ in each year, commencing ________ __, ____, at the rate of
______________________________ per centum (______%) per annum and shall
mature, subject to the right of prior redemption as hereinafter set forth, on
________ __, ____.
Both principal of and interest on the Series K Bonds shall be payable
in lawful money of the United States of America, but only from the revenues
and receipts pledged to the payment thereof as provided herein and in the
Indenture.
SECTION 2.02. Form of Series K Bonds. The Series K Bonds shall be
issued substantially in the form of the Series K Bond hereinabove set forth,
with such appropriate variations, omissions and insertions as are permitted
or required by the Indenture or this Tenth Supplemental Indenture.
Initially, one certificate for the Series K Bonds will be issued and
registered to the Securities Depository (defined below), or its nominee. The
County and the Trustee may enter into a Letter of Representations (defined
below) relating to a book-entry system to be maintained by the Securities
Depository with respect to the Series K Bonds.
In the event that (a) the Securities Depository determines not to
continue to act as a securities depository for the Series K Bonds by giving
notice to the Trustee and the County discharging its responsibilities
hereunder, or (b) the County determines (at the direction of the Company) (i)
that beneficial owners of Series K Bonds shall be able to obtain certificated
Series K Bonds or (ii) to select a new Securities Depository, then the
Trustee shall, at the direction of the County (at the request of the
Company), attempt to locate another qualified securities depository to serve
as Securities Depository or authenticate and deliver certificated Series K
Bonds to the beneficial owners or to the Securities Depository participants
on behalf of beneficial owners substantially in the form provided for in this
Section. In delivering certificated Series K Bonds, the Trustee shall be
entitled to rely on the records of the Securities Depository as to the
beneficial owners or the records of the Securities Depository participants
acting on behalf of beneficial owners. Such certificated Series K Bonds will
then be registrable, transferable and exchangeable as set forth in this
Indenture.
So long as there is a Securities Depository for the Series K Bonds (1)
it or its nominee shall be the registered owner of the Series K Bonds, (2)
notwithstanding anything to the contrary in this Indenture, determinations of
persons entitled to payment of principal, premium, if any, and interest,
transfers of ownership and exchanges and receipt of notices shall be the
responsibility of the Securities Depository and shall be effected pursuant to
rules and procedures established by such Securities Depository, (3) the
County, the Company and the Trustee shall not be responsible or liable for
maintaining, supervising or reviewing the records maintained by the
Securities Depository, its participants or persons acting through such
participants, (4) references in this Indenture to registered owners of the
Series K Bonds shall mean such Securities Depository or its nominee and shall
not mean the beneficial owners of the Series K Bonds and (5) in the event of
any inconsistency between the provisions of this Indenture and the provisions
of the Letter of Representations such provisions of the Letter of
Representations, except to the extent set forth in this paragraph and the
next preceding paragraph, shall control.
For purposes of this Section, the following terms shall have the
following meanings:
"Letter of Representations" means the Letter of Representations dated
________ __, ____, from the County and the Trustee to the Securities
Depository and any amendments thereto, or successor agreements between the
County and the Trustee and any successor Securities Depository, relating to a
book-entry system to be maintained by the Securities Depository with respect
to the Series K Bonds.
"Securities Depository" means The Depository Trust Company, a
corporation organized and existing under the laws of the State of New York,
and any other securities depository for the Series K Bonds appointed pursuant
to this Section, and their successors.
SECTION 2.03. Execution, Authentication and Delivery of Series K
Bonds. The Series K Bonds shall be executed, authenticated and delivered,
and the proceeds therefrom deposited, as provided in Section 2.11 of the
Indenture, as amended by Section 5.01 of this Tenth Supplemental Indenture,
and Section 3.2(c) of the Agreement.
ARTICLE III
REDEMPTION OF SERIES K BONDS BEFORE MATURITY
SECTION 3.01. Redemption. Any and all of the Series K Bonds shall be
redeemable as set forth in the form of the Series K Bond hereinabove set
forth. Reference is hereby further made to Article III of the Indenture for
the provisions describing the methods and effects of redemption.
ARTICLE IV
COVENANTS AND SECURITY
SECTION 4.01. Authority; Compliance with Conditions. The County
covenants that it is duly authorized under the laws of the State of West
Virginia, including particularly and without limitation the Act, to issue the
Series K Bonds, authorized hereby and to execute and deliver this Tenth
Supplemental Indenture, to assign and pledge the Agreement and the revenues
and receipts payable under the Agreement, to grant a security interest
therein and to pledge the revenues and receipts in the manner and to the
extent contemplated herein and in the Indenture; that all of the requirements
and conditions for the issuance of the Series K Bonds and the execution and
delivery of this Tenth Supplemental Indenture have been satisfied and
complied with; that all other action on its part necessary for the issuance
of the Series K Bonds and the execution and delivery of this Tenth
Supplemental Indenture has been duly and effectively taken; and that the
Series K Bonds in the hands of the owners thereof are and will be valid and
enforceable obligations of the County according to the terms thereof and
hereof.
SECTION 4.02. Security for Series K Bonds; Confirmation of Indenture.
The Series K Bonds shall be equally and ratably secured under the Indenture
with all outstanding bonds, and any other series of bonds which may be issued
pursuant to Section 2.10 or 2.11 of the Indenture, without preference,
priority or distinction of any bonds, as defined therein, over any other
bonds. As supplemented and amended, the Indenture is in all respects
ratified and confirmed, and the Indenture, including each supplemental
indenture, shall be read, taken and construed as one and the same
instrument. All covenants, agreements and provisions of, and all security
provided under, the Indenture shall apply with full force and effect to the
Series K Bonds and to the owners thereof.
ARTICLE V
AMENDMENT OF INDENTURE
SECTION 5.01. Amendment to Section 2.11. The last sentence of Section
2.11 of the Indenture is amended to read as follows:
"The proceeds of such Refunding Bonds shall be deposited by the
Trustee in the Bond Fund and held by the Trustee in the Bond Fund
pursuant to the provisions of Section 7.01 for the payment of the
principal of, premium, if any, and interest on the Bonds to be refunded
at the earliest redemption date, or in the case of Series H Bonds,
Series I Bonds, Series J Bonds, Series K Bonds or any other series of
Bonds which may be issued after ________ __, ____ pursuant to Sections
2.10 or 2.11 of the Indenture, at the earliest date on which the
respective series shall be subject to redemption at the option of the
County or such later date, including the maturity date, as the County,
at the direction of the Company, shall designate."
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Successors and Assigns. This Tenth Supplemental
Indenture shall be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
SECTION 6.02. Applicable Law. This Tenth Supplemental Indenture shall
be governed by the laws of the State of West Virginia.
SECTION 6.03. Counterparts. This Tenth Supplemental Indenture may be
executed in several counterparts, each of which shall be an original, and all
of which together shall constitute but one and the same instrument.
The beneficiaries hereof at the time of execution and delivery hereof
are the holders of the Series G Bonds, Series H Bonds, Series I Bonds, Series
K Bonds and ____________________ of ____________________.
IN WITNESS WHEREOF, MASON COUNTY, WEST VIRGINIA, by and through its
County Commission, has caused this Tenth Supplemental Indenture to be
executed by the President of the Mason County Commission, and the seal of the
Mason County Commission to be hereunto affixed and attested by the Clerk of
the Mason County Commission, and One Valley Bank, National Association, has
caused this Tenth Supplemental Indenture to be executed by one of its Vice
Presidents and attested by one of its Assistant Secretaries, all as of the
date first above written.
COUNTY COMMISSION OF MASON COUNTY
By______________________________________
President
(SEAL)
Attest:
______________________________
Clerk
ONE VALLEY BANK, NATIONAL ASSOCIATION
as Trustee
By_________________________________
Vice President
(SEAL)
Attest:
______________________________
Assistant Secretary
STATE OF WEST VIRGINIA )
: ss:
COUNTY OF MASON )
I, ________________________, a Notary Public in and for the County and
State aforesaid, hereby certify that ____________________ and
____________________, who signed the writing above and hereto annexed as
President and Clerk for the COUNTY COMMISSION OF MASON COUNTY, West Virginia,
bearing date as of the __________ day of __________, ____, have this day in
my said County before me acknowledged the said writing to be the act and deed
of said County Commission.
Given under my hand and seal this ______ day of ________, ____.
(Seal)
______________________________
My Commission Expires:
STATE OF WEST VIRGINIA )
: ss:
COUNTY OF KANAWHA )
I, ________________________, a Notary Public in and for the County and
State aforesaid, hereby certify that ________________________ and
___________________________, who signed the writing above and hereto annexed
as Vice President and Assistant Secretary of ONE VALLEY BANK, NATIONAL
ASSOCIATION, bearing date as of the __________ day of __________, ____, have
this day in my said County before me acknowledged the said writing to be the
act and deed of said Bank.
Given under my hand and seal this ______ day of ________, ____.
(Seal)
______________________________
My Commission Expires:
Exhibit D-18
Before the
STATE CORPORATION COMMISSION
APPLICATION :
Of : Case No. PUF
APPALACHIAN POWER COMPANY :
APPLICATION UNDER TITLE 56,
CHAPTER 3, OF THE CODE OF VIRGINIA
APPALACHIAN POWER COMPANY, a corporation duly organized under the laws
of the Commonwealth of Virginia (hereinafter referred to as "Appalachian"),
respectfully shows:
1. Appalachian is a public service corporation organized in Virginia
as a public utility, subject to regulation, inter alia, as to rates, service
and security issues by this Commission and doing business under the laws of
the Commonwealth of Virginia and duly qualified to transact a public utility
business in the State of West Virginia.
2. Appalachian proposes to issue and sell, from time to time through
December 31, 1999, secured or unsecured promissory notes ("Notes") in the
aggregate principal amount of up to $400,000,000. The Notes may be issued in
the form of either First Mortgage Bonds, Senior or Subordinated Debentures
(including Junior Subordinated Debentures) or other promissory notes.
The Notes will mature in not less than 9 months and not more than
50 years. The interest rate of the Notes may be fixed or variable and will
be sold by (i) competitive bidding, (ii) through negotiation with
underwriters or agents, or (iii) by direct placement with a commercial bank
or other institutional investor. Any fixed rate Note will be sold by
Appalachian at a yield to maturity which shall not exceed by more than 300
basis points the yield to maturity on United States Treasury obligations of
comparable maturity at the time of pricing. The initial interest rate on any
variable rate Note will not exceed 10% per annum. Appalachian will agree to
specific redemption provisions, if any, including redemption premiums, at the
time of the pricing.
In connection with the sale of unsecured Notes, Appalachian may
agree to restrictive covenants which would prohibit it from, among other
things: (i) creating or permitting to exist any liens on its property, with
certain stated exceptions; (ii) creating indebtedness except as specified
therein; (iii) failing to maintain a specified financial condition; (iv)
entering into certain mergers, consolidations and dispositions of assets; and
(v) permitting certain events to occur in connection with pension plans. In
addition, Appalachian may permit the holder of the Notes to require
Appalachian to prepay them after certain specified events, including an
ownership change.
Appalachian may have the right to defer payment of interest on
the Junior Subordinated Debentures for up to five years. However,
Appalachian may not declare and pay dividends on its outstanding stock if
payments under the Junior Subordinated Debentures are deferred. The payment
of principal, premium and interest on Junior Subordinated Debentures will be
subordinated in right of payment to the prior payment in full of senior
indebtedness.
The First Mortgage Bonds will be issued under and secured by the
Mortgage and Deed of Trust, dated as of December 1, 1940, made by Appalachian
to Bankers Trust Company and R. Gregory Page, as Trustees, as previously
supplemented and amended (on file in Cases No. 7118, 9022, 9947, 10555,
11183, 11908, 13367, 13857, 15683, S-270, S-352, A-28, A-42, A-118, A-147,
A-209, A-254, A-297, A-394, A-397, A-444, A-483, A-513, A-614, A-739, A-753,
PUA800002, PUA800065, PUA820008, PUA830066, PUA860088, PUA870041, PUA890040,
PUF910025, PUF910047, PUF920035, PUF930038, PUF930035, PUF940002, PUF950018,
PUF960032 and PUF970035), and as to be further supplemented and amended by
one or more Supplemental Indentures. A copy of the most recent Supplemental
Indenture for First Mortgage Bonds utilized by Appalachian is attached as
Exhibit A. It is proposed that a similar form of Supplemental Indenture be
used for one or more series of the First Mortgage Bonds (except for
provisions such as interest rate, maturity, redemption terms and certain
administrative matters).
The Junior Subordinated Debentures will be issued under an
Indenture, dated as of September 1, 1996, as previously supplemented and
amended, and as to be further supplemented and amended by one or more
Supplemental Indentures. A copy of the Indenture and the most recent
Supplemental Indenture for Junior Subordinated Debentures utilized by
Appalachian are attached as Exhibit B. It is proposed that a similar form of
Supplemental Indenture be used for one or more series of the Junior
Subordinated Debentures (except for provisions such as interest rate,
maturity, redemption terms and certain administrative matters).
The unsecured Notes (other than Junior Subordinated Debentures)
will be issued under an Indenture dated as of January 1, 1998, as previously
supplemented and amended, and as to be further supplemented and amended by
one or more Supplemental Indentures or Company Orders. A copy of the
Indenture and most recent Company Order utilized by Appalachian are attached
hereto as Exhibit C. It is proposed that a similar form of Company Order or
a Supplemental Indenture be used for one or more series of the unsecured
Notes other than Junior Subordinated Debentures (except for provisions such
as interest rate, maturity, redemption terms and certain administrative
matters).
3. Appalachian proposes, with the Commission's approval, to utilize
interest rate management techniques and enter into Interest Rate Management
Agreements. Such authority will allow Appalachian sufficient alternatives
and flexibility when striving to reduce its effective interest cost and
manage interest cost on financings.
A. Interest Rate Management Agreements
The Interest Rate Management Agreements will be products commonly
used in today's capital markets, consisting of "interest rate swaps", "caps",
"collars", "floors", "options", or hedging products such as "forwards" or
"futures", or similar products, the purpose of which is to manage and
minimize interest costs. Appalachian expects to enter into these agreements
with counterparties that are highly rated financial institutions. The
transactions will be for a fixed period and a stated principal amount, and
may be for underlying fixed or variable obligations of Appalachian.
B. Pricing Parameters
Appalachian proposes that the pricing parameters for Interest
Rate Management Agreements be governed by the same parameters applicable to
the Notes. Fees and commissions in connection with any Interest Rate
Management Agreement will be in addition to the above parameters and will not
exceed 1.00% of the amount of the underlying obligation involved.
C. Accounting
Appalachian proposes to account for these transactions in
accordance with generally accepted accounting principles.
D. Commission Authorization
Since market opportunities for these interest rate management
alternatives are transitory, Appalachian must be able to execute interest
rate management transactions when the opportunity arises to obtain the most
competitive pricing. Thus, Appalachian seeks approval to enter into any or
all of the described interest rate management transactions within the
parameters discussed above prior to the time Appalachian reaches agreement
with respect to the terms of such transactions.
If Appalachian utilizes Interest Rate Management Agreements,
Appalachian's annual long-term interest charges could change. The
authorization of the Interest Rate Management Agreements consistent with the
parameters herein in no way relieves Appalachian of its responsibility to
obtain the best terms available for the product selected and, therefore, it
is appropriate and reasonable for this Commission to authorize Appalachian to
agree to such terms and prices consistent with said parameters.
* * *
4. Any proceeds realized from the sale of the Notes, together with
any other funds which may become available to Appalachian, will be used to
redeem directly or indirectly long-term debt, to refund directly or
indirectly preferred stock, to repay short-term debt at or prior to maturity,
to reimburse Appalachian's treasury for expenditures incurred in connection
with its construction program and for other corporate purposes.
Appalachian's First Mortgage Bonds, 8.43% Series due 2022 ($37,471,000
principal amount outstanding) may be redeemed at a regular redemption price
of 105.91% (105.48% at June 1, 1999) of the principal amount thereof; the
First Mortgage Bonds, 7.90% Series due 2023 ($30,000,000 principal amount
outstanding) may be redeemed at a regular redemption price of 105.93%
(105.53% at June 1, 1999) of the principal amount thereof; the First Mortgage
Bonds, 7.80% Series due 2023 ($40,000,000 principal amount outstanding) may
be redeemed at a regular redemption price of 105.85% (105.46% at May 1, 1999)
of the principal amount thereof; the First Mortgage Bonds, 7.38% Series due
2002 ($50,000,000 principal amount outstanding) may be redeemed at a regular
redemption price of 101.06% (100.00% at August 15, 1999) of the principal
amount thereof; the First Mortgage Bonds, 6.85% Series due 2003 ($30,000,000
principal amount outstanding) may be redeemed at a regular redemption price
of 101.96% (100.98% at June 1, 1999) of the principal amount thereof; and the
First Mortgage Bonds, 6.65% Series due 2003 ($40,000,000 principal amount
outstanding) may be redeemed at a regular redemption price of 101.90%
(100.95% at May 1, 1999) of the principal amount thereof. The redemptions
will occur if Appalachian considers that the payment of the premiums of
5.91%, 5.93%, 5.85%, 1.06%, 1.96% and 1.90%, respectively, is prudent in
light of the substantial amounts of interest expense that could be saved by
early redemption of one or all of these series, and proposes to treat said
premiums, if such early redemptions are carried out, as an expense of the
Notes, to be amortized over the life of the Notes. If such life is ten years,
the amortization of such premium would be approximately $821,154 per year.
Appalachian intends to utilize deferred tax accounting for the premium
expense, in order properly to match the amortization of the expense and the
related tax effect. In addition, Appalachian estimates that approximately
$221,000,000 (exclusive of allowance for funds used during construction) will
be expended in 1999 in connection with its construction program.
Appalachian may purchase the series of first mortgage bonds
referred to herein or any other series or any series of preferred stock
through tender offer, negotiated, open market or other form of purchase or
otherwise by means other than redemption, if they can be refunded at a lower
effective cost.
The tender offers will occur if Appalachian considers that the
payment of the necessary premium is prudent in light of the substantial
amounts of interest expense that could be saved by early redemption of any of
these series, and proposes to treat said premium as an expense of the Notes
to be amortized over the life of the Notes. Appalachian intends to utilize
deferred tax accounting for the premium expense, in order properly to match
the amortization of the expense and the related tax effect.
* * *
5. On June 6, 1978, Appalachian filed an Application with this
Commission in Case No. A-667 seeking the requisite authorization with respect
to certain transactions relating to the financing of certain pollution
abatement or control and related facilities at Units 1 and 3 of its Philip
Sporn Plant (the "Sporn Plant") in Mason County, West Virginia and certain
air and water pollution abatement or control facilities at its Mountaineer
Plant (the "Mountaineer Plant") under construction in Mason County, West
Virginia (all such pollution abatement or control and related facilities
being collectively referred to in Paragraphs 5 through 22 of this Application
as the "Project"), including (i) the transfer by Appalachian of such
pollution abatement or control facilities, to the extent already constructed
and then in place at the Sporn and Mountaineer Plant sites, to Mason County,
West Virginia, acting by and through its Commission (hereinafter referred to
as "Mason County") and the reacquisition by Appalachian of the Project from
Mason County, pursuant to an Agreement of Sale with Mason County, dated as of
July 1, 1978 (the "Agreement"); and (ii) the issuance by Mason County of an
initial series of its pollution control revenue bonds (the "Series A Bonds")
under an Indenture of Trust, dated as of July 1, 1978 (the "Indenture"),
between Mason County and One Valley Bank, N.A. (formerly, Kanawha Valley
Bank, N.A.), as Trustee (the "Trustee"). On June 23, 1978, this Commission
issued an Order granting Appalachian authority to provide financing for the
Project through the sale of up to $60,000,000 principal amount of the Series
A Bonds. On July 31, 1978, Mason County issued and sold $40,000,000
principal amount of Series A Bonds and deposited the amount realized from
such sale with the Trustee in the Construction Fund (as defined in the
Indenture) in order to provide monies to reimburse Appalachian for a portion
of the amounts it had expended to pay the Cost of Construction (as defined in
the Agreement) of the Project, and the disposition and reacquisition
described above were effectuated.
6. On May 25, 1979, Appalachian filed an Application with this
Commission in Case No. A-749 seeking requisite authorization with respect to
a transaction relating to the issue and sale of additional pollution control
revenue bonds in an aggregate principal amount of up to $70,000,000 (the
"Series B Bonds") in order to provide additional funds for the payment of the
Cost of Construction of the Project. On June 8, 1979, this Commission issued
an Order granting Appalachian authority to provide additional financing for
the Project through the sale of up to $50,000,000 principal amount of Series
B Bonds. On June 15, 1979, Mason County issued and sold $50,000,000
principal amount of Series B Bonds and the proceeds of the sale of the Series
B Bonds were deposited by Mason County with the Trustee in the Construction
Fund and applied to the payment of the Cost of Construction of the Project,
which included reimbursement to Appalachian for amounts it had previously
expended to pay the Cost of Construction.
7. On December 31, 1980, Appalachian filed an Application with this
Commission in Case No. PUA810002 seeking requisite authorization with respect
to a transaction relating to the issue and sale of additional pollution
control revenue bonds in an aggregate principal amount of up to $40,000,000
(the "Series C Bonds") in order to provide additional funds for the payment
of the Cost of Construction of the Project. On January 28, 1981, this
Commission issued an Order granting Appalachian authority to provide
additional financing for the Project through the sale of up to $40,000,000
principal amount of Series C Bonds. On February 25, 1981, Mason County
issued and sold $40,000,000 principal amount of Series C Bonds and the
proceeds of the sale of the Series C Bonds were deposited by Mason County
with the Trustee in the Construction Fund and applied to the payment of the
Cost of Construction of the Project, which included reimbursement to
Appalachian for amounts it had previously expended to pay the Cost of
Construction.
8. On January 30, 1984, Mason County issued and sold $30,000,000
principal amount of an additional series of pollution control revenue bonds
(the "Series D Bonds"). The proceeds of the sale of the Series D Bonds were
deposited by Mason County with the Trustee in the Bond Fund (as defined in
the Indenture) and applied to the payment of the principal of the $30,000,000
of Series C Bonds which matured by their terms on February 1, 1984. The
obligations of Appalachian under the Agreement with respect to the issuance
and sale of the Series D Bonds did not require authorization of this
Commission under the provisions of Section 56-65.1 of the Code of Virginia,
as amended.
9. On April 10, 1984, Mason County issued and sold $30,000,000
principal amount of an additional series of pollution control revenue bonds
(the "Series E Bonds"). The proceeds of the sale of the Series E Bonds were
deposited by Mason County with the Trustee in the Bond Fund and applied to
redeem the principal of the $30,000,000 of Series D Bonds on April 30, 1984.
The obligations of Appalachian under the Agreement with respect to the
issuance and sale of the Series E Bonds did not require authorization of this
Commission under the provisions of Section 56-65.1 of the Code of Virginia,
as amended, and accordingly, Appalachian's Application covering the Series E
Bonds (Case No. PUA840007) was withdrawn and the proceeding dismissed by this
Commission on March 22, 1984.
10. On January 24, 1985, Appalachian filed an Application with this
Commission in Case No. PUA850001 seeking requisite authorization with respect
to a transaction relating to the issue and sale of additional pollution
control revenue bonds in an aggregate principal amount of up to $30,000,000
(the "Series F Bonds") in order to redeem at maturity the principal of
$30,000,000 of Series E Bonds. On February 15, 1985, this Commission issued
an Order granting Appalachian authority to issue the Series F Bonds for the
purpose of effecting the redemption at maturity of the Series E Bonds. On
March 19, 1985, Mason County issued and sold $30,000,000 principal amount of
the Series F Bonds and the proceeds of the sale of the Series F Bonds were
deposited by Mason County with the Trustee in the Bond Fund and applied to
redeem at maturity the principal of $30,000,000 of Series E Bonds on April 1,
1985.
11. On November 22, 1989, Appalachian filed an Application with this
Commission in Case No. PUA890053 seeking requisite authorization with respect
to a transaction relating to the issue and sale of additional pollution
control revenue bonds in an aggregate principal amount of up to $30,000,000
(the "Series G Bonds") in order to redeem at maturity the principal of
$30,000,000 of Series F Bonds. On December 29, 1989, this Commission issued
an Order granting Appalachian authority to issue the Series G Bonds for the
purpose of effecting the redemption prior to maturity of the Series F Bonds.
On January 17, 1990, Mason County issued and sold $30,000,000 principal
amount of the Series G Bonds and the proceeds of the sale of the Series G
Bonds were deposited by Mason County with the Trustee in the Bond Fund and
applied to redeem prior to maturity the principal of $30,000,000 of Series F
Bonds on March 1, 1990.
12. On August 10, 1990, Appalachian filed an Application with this
Commission in Case No. PUF900001 seeking requisite authorization with respect
to a transaction relating to the issue and sale of additional pollution
control revenue bonds in an aggregate principal amount of up to $10,000,000
(the "Series H Bonds") in order to redeem prior to maturity the principal of
$10,000,000 of Series C Bonds. On September 18, 1990, this Commission issued
an Order granting Appalachian authority to issue the Series H Bonds for the
purpose of effecting the redemption prior to maturity of the Series C Bonds.
On November 8, 1990, Mason County issued and sold $10,000,000 principal
amount of the Series H Bonds and the proceeds of the sale of the Series H
Bonds were deposited by Mason County with the Trustee in the Bond Fund and
applied to redeem prior to maturity the principal of $10,000,000 of Series C
Bonds on February 1, 1991.
13. On April 17, 1992, Appalachian filed an Application with this
Commission in Case No. PUF920019 seeking requisite authorization with respect
to a transaction relating to the issue and sale of additional pollution
control revenue bonds in an aggregate principal amount of up to $40,000,000
(the "Series I Bonds") in order to redeem prior to maturity the principal of
$40,000,000 of Series A Bonds. On May 8, 1992, this Commission issued an
Order granting Appalachian authority to issue the Series I Bonds for the
purpose of effecting the redemption prior to maturity of the Series A Bonds.
On June 4, 1992, Mason County issued and sold $40,000,000 principal amount of
the Series I Bonds and the proceeds of the sale of the Series I Bonds were
deposited by Mason County with the Trustee in the Bond Fund and applied to
redeem prior to maturity the principal of $40,000,000 of Series A Bonds on
August 1, 1992.
14. On August 19, 1992, Appalachian filed an Application with this
Commission in Case No. PUF920035 seeking requisite authorization with respect
to a transaction relating to the issue and sale of additional pollution
control revenue bonds in an aggregate principal amount of up to $50,000,000
(the "Series J Bonds") in order to redeem prior to maturity the principal of
$50,000,000 of Series B Bonds. On September 10, 1992, this Commission issued
an Order granting Appalachian authority to issue the Series J Bonds for the
purpose of effecting the redemption prior to maturity of the Series B Bonds.
On October 29, 1992, Mason County issued and sold $50,000,000 principal
amount of the Series J Bonds and the proceeds of the sale of the Series J
Bonds were deposited by Mason County with the Trustee in the Bond Fund and
applied to redeem prior to maturity the principal of $50,000,000 of Series B
Bonds on December 1, 1992.
15. Appalachian intends to inform Mason County that pursuant to the
Agreement it will request Mason County to issue and sell additional pollution
control revenue bonds in an aggregate principal amount of up to $30,000,000
(the "Series K Bonds") in order to provide funds for the payment of the
$30,000,000 aggregate principal amount of the Series G Bonds on their
redemption date of January 1, 2000. It is contemplated that the Series K
Bonds will be issued pursuant to the Indenture as supplemented and amended
and to be supplemented by a Tenth Supplemental Indenture in substantially the
form filed herewith as Exhibit D, which will provide that the proceeds of the
sale of the Series K Bonds will be deposited by Mason County with the Trustee
in the Bond Fund and applied to payment of the $30,000,000 aggregate
principal amount of the Series G Bonds.
16. It is contemplated that the Series K Bonds will be sold pursuant
to arrangements with a group of underwriters. While Appalachian will not be
a party to the underwriting arrangements for the Series K Bonds, the
Agreement provides that the Series K Bonds shall have such terms as shall be
specified by Appalachian. If it is deemed advisable, the final form of the
Supplemental Indenture may provide for a sinking fund pursuant to which a
portion of all the Series K Bonds issued could be retired annually. In
addition, the Series K Bonds may not, if it is deemed advisable, be
redeemable optionally in whole or in part for a period of time. Finally, if
it is deemed advisable, the Series K Bonds may be provided some form of
credit enhancement, such as a letter of credit, bond insurance, or surety
bond.
17. Appalachian understands that the Series K Bonds can be issued
under circumstances that the interest on such Bonds will be excludable from
gross income under the provisions of Section 103 of the Internal Revenue Code
of 1986, as amended (except for interest on any such Bond during a period in
which it is held by a person who is a substantial user of the Project or a
related person), and that while it is not possible to predict precisely the
interest rate which may be obtained in connection with the issuance of bonds
having such characteristics, the annual interest rate on tax exempt
obligations historically has been, and can be expected under current
circumstances to be, 1-1/2% to 2-1/2% or more lower than the rates of
obligations of like tenor and comparable quality, interest on which is fully
subject to Federal income tax.
18. The Agreement provides that each installment of the purchase
price for the Project payable by Appalachian will be in such an amount
(together with other moneys held by the Trustee under the Indenture for that
purpose) as will enable payment, when due, of (i) the interest on all Series
K Bonds and any additional bonds and refunding bonds issued under the
Indenture, (ii) the stated maturities of the principal of all Series K Bonds
and any additional bonds and refunding bonds issued under the Indenture and
(iii) amounts, including any accrued interest, payable in connection with any
mandatory redemption of all Series K Bonds and any additional bonds or
refunding bonds issued under the Indenture. The Agreement also obligates
Appalachian to pay the fees and charges of the Trustee, as well as certain
administrative expenses of Mason County. Appalachian will not agree, without
further Order of this Commission, to the issuance of any Series K Bond if (i)
the stated maturity of any such Bond shall be more than forty (40) years;
(ii) if the rate of interest to be borne by any such Series K Bonds shall
exceed 8% per annum; (iii) if the discount from the initial public offering
price of any such Bond shall exceed 5% of the principal amount thereof; or
(iv) if the initial public offering price of any such Bond shall be less than
95% of the principal amount thereof.
19. Since Appalachian believes that every effort should be made to
minimize, to the extent possible, carrying costs of facilities employed by
Appalachian in the rendition of utility services and the issuer will apply
the funds derived from the issuance of the Series K Bonds to the payment of
$30,000,000 aggregate principal amount of Series G Bonds on their January 1,
2000 redemption date, Appalachian believes that the public interest will be
served by the issuance of the Series K Bonds by reducing the interest rates
on such Bonds.
20. Appalachian believes that the consummation of the transaction
herein proposed will be in the best interests of Appalachian's consumers and
investors and consistent with sound and prudent financial policy.
Appalachian also believes that although, in Appalachian's view, the
contractual obligations of Appalachian under the Agreement are not subject to
the provisions of Chapter 3 of Title 56 of the Code of Virginia, as amended,
if this Commission issues the Order requested hereby, Appalachian will have
received all necessary authorization from this Commission which may be
necessary or appropriate under the laws of the Commonwealth of Virginia in
respect of the transaction described herein.
21. Because the proceeds from the sale of the Series K Bonds will be
deposited in the Bond Fund and will be applied to the payment of $30,000,000
aggregate principal amount of the Series G Bonds on their redemption January
1, 2000 date, none of the proceeds of the sale of the Series K Bonds will be
received by Appalachian.
22. Appalachian proposes to treat the call premium associated with
the redemption of the Series G Bonds as an issuance expense of the Series K
Bonds and to amortize such expense over the life of such issue. If the life
of the Series K Bonds is 30 years, the amortization of such premium would be
approximately $20,000 per year. Appalachian intends to utilize deferred tax
accounting for the premium expenses, in order properly to match the
amortization of the expenses and the related tax effect. In its Order
granting authority in Case No. PUF 920035, the Commission approved similar
accounting treatment for a premium associated with Mason County's issuance of
the Series J Bonds.
23. Balance Sheets and Statements of Income and Retained Earnings for
the twelve months ended September 30, 1998 are attached hereto as Exhibit E.
24. The issuance of the Notes and Series K Bonds will be effected in
compliance with all applicable indenture, charter and other standards
relating to debt and equity securities and capitalization ratios of
Appalachian.
Appalachian, therefore, asks that an Order be entered by this
Commission granting all requisite authorization under the laws of Virginia
for the transactions herein proposed.
Dated: November 19, 1998
APPALACHIAN POWER COMPANY
By /s/ A. A. Pena
Vice President
and By /s/ Thomas G. Berkemeyer
Assistant Secretary
Attorneys for Appalachian Power Company:
William E. Johnson, Esq.
American Electric Power Service Corporation
1 Riverside Plaza
Columbus, Ohio 43215
H. Allen Glover, Jr., Esq.
George J. A. Clemo, Esq.
Woods, Rogers & Hazlegrove
First Union Tower, Suite 1400
10 South Jefferson Street
Roanoke, Virginia 24011
STATE OF OHIO )
) ss:
COUNTY OF FRANKLIN )
Before me, Mary M. Soltesz, a Notary Public in and for the State and
County aforesaid, this 19th day of November, 1998, personally appeared A. A.
Pena and Thomas G. Berkemeyer, to me known to be the persons whose names are
signed to the foregoing Application, and after being first duly sworn made
oath and said that they are Vice President and Assistant Secretary,
respectively, of Appalachian Power Company, that they have read the
Application and know the contents thereof, that the allegations therein are
true and correct to the best of their knowledge, information and belief, and
that they are duly authorized to make, verify and file the Application for
Appalachian Power Company.
Subscribed and sworn to before me this 19th day of November, 1998.
/s/ Mary M. Soltesz_
Notary Public
My Commission Expires 7-12-99
Exhibit D-19
COMMONWEALTH OF VIRGINIA
STATE CORPORATION COMMISSION
AT RICHMOND, JANUARY 25, 1999
APPLICATION OF
APPALACHIAN POWER COMPANY CASE NO. PUF 980032
For authority to incur
long-term indebtedness
ORDER GRANTING AUTHORITY
On December 3, 1998, Appalachian Power Company ("APCO", or "Applicant")
filed an application under Chapter 3 of Title 56 of the Code of Virginia
requesting authority to issue long-term debt securities. In addition, APCO
requested authority to utilize interest rate management techniques by
entering into various Interest Rate Management Agreements ("IRMAs"). By
letter dated January 8, 1999, APCO submitted an amendment to limit the scope
of authority for IRMAs. Applicant has paid the requisite fee of $250.
APCO proposes to issue up to $400 million of secured or unsecured
promissory notes ("Notes") from time to time through December 31, 1999. The
Notes may be issued in the form of either First Mortgage Bonds, Senior or
Subordinated Debentures (including Junior Subordinated Debentures), or other
promissory notes. APCO further proposes to issue $30,000,000 of pollution
control revenue bonds ("Series K Bonds").
Applicant requests the flexibility to set specific terms and conditions
of the proposed securities, such as maturity and interest rate, based on
market conditions at the time of issuance. As set out in its application,
however, Applicant outlines broad parameters under which the issuance of the
debt securities will occur.
The proceeds from the issuance of the $400,000,000 in Notes will be
used to redeem, directly or indirectly, long-term debt, to refund, directly
or indirectly, preferred stock, to repay short-term debt, to reimburse APCO's
treasury for construction program expenditures, and for other proper
corporate purposes. The proceeds from the issuance of the $30,000,000 in
Series K Bonds will be used for the early redemption of a like amount of
Series G pollution control revenue bonds. In conjunction with the issuance
of the proposed securities, Applicant requests authority to enter into one or
more interest rate management agreements to manage the interest rate costs on
the proposed financings.
THE COMMISSION, upon consideration of the application and having been
advised by its Staff, is of the opinion and finds that approval of the
application will not be detrimental to the public interest. We will approve
the application subject to the terms and conditions detailed herein. The
hedging arrangements proposed by Applicant are approved only as part of the
issuance of debt securities in this proceeding. Such approval shall not,
however, be deemed a general grant of authority to enter into interest rate
swaps, caps, collars, treasury locks, or similar IRMA's with banks or other
financial institutions.FN1
FN1 We note that we held, in Case No. PUF970019, that interest rate swap
agreements come within the purview of Chapter 3 of Title 56 of the Code of
Virginia and, as such, require prior approval from the Commission.
The Commission is of the further opinion and finds that Applicant's proposed
treatment of costs to refinance outstanding debt with the debt proposed in this
application should not be authorized in this case. The proper treatment of such
costs is more appropriately considered in the broader context of a rate related
proceeding. Therefore, any such cost of refunded debt will be addressed within
the context of APCO's next rate related proceeding. Accordingly,
IT IS ORDERED THAT:
1) Applicant is hereby authorized to issue and sell up to
$400,000,000 of long-term debt, from time to time through December 31, 1999,
for the purposes and under the terms and conditions set forth in the
application.
2) Applicant is hereby authorized to incur long-term indebtedness in
the form of pollution control revenue bonds of up to $30,000,000, through
January 1, 2000, for the purposes and under the terms and conditions set
forth in the application.
3) Applicant is authorized to enter into the hedging agreements
proposed in its application only in conjunction with the issuance of the debt
securities approved herein and only for purposes consistent with those set
out in APCO's Board of Director's Resolution dated January 29, 1997.
4) The authority granted herein shall have no implications for
ratemaking purposes.
5) Applicant shall submit a preliminary Report of Action within
seven days after the issuance of any debt pursuant to this Order to include
the issuance date, the amount of the issue, the interest rate, the maturity
date, and any securities retired.
6) Within 60 days after the end of each calendar quarter in which
any debt is issued pursuant to this Order, Applicant shall file a more
detailed report of Action with respect to the debt to include: the type of
debt issued, the date and amount of each series, the interest rate, the
maturity date, net proceeds to Applicant, an itemized list of expenses to
date associated with each issue, a description of how the proceeds were used,
a list of any securities retired, accompanied by an analysis demonstrating
the cost savings associated with the refunding, and a balance sheet
reflecting the actions taken.
7) Applicant's Final Report of Action shall be due on or before
March 14, 2000, to include a summary of all information filed in the Reports
of Action pursuant to Ordering Paragraph 5, in addition to the information,
if required, pertaining to any issuance of debt between October 1, 1999 and
January 1, 2000.
8) This matter shall remain under the continued review, audit, and
appropriate action of this Commission.
AN ATTESTED COPY hereof shall be sent to Applicant, to the attention of
William E. Johnson, Attorney, American Electric Power, 1 Riverside Plaza,
Columbus, OH 43215-2372; and to the Division of Economics and Finance of the
Commission.
A True Copy Tests
/s/ Joel H. Peck
Clerk of the
State Corporation Commission
Exhibit H-4
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Release No. /July , 1999
________________________________________
:
In the Matter of :
:
:
APPALACHIAN POWER COMPANY :
40 Franklin Road, S.W. :
Roanoke, Virginia 24011 :
:
(70-6171) :
________________________________________
NOTICE OF PROPOSED ISSUANCE OF REFUNDING BONDS BY COUNTY IN CONNECTION WITH
POLLUTION CONTROL FINANCING
NOTICE IS HEREBY GIVEN that Appalachian Power Company ("Appalachian"), an
electric utility subsidiary of American Electric Power Company, Inc., a
registered holding company, has filed with this Commission a post-effective
amendment to its Application or Declaration previously filed and amended
pursuant to the Public Utility Holding Company Act of 1935 (the "Act"),
designating Sections 9(a), 10 and 12(d) of the Act and Rule 44(b)(3)
promulgated thereunder as applicable to the proposed transaction. All
interested persons are referred to the Application or Declaration, as amended
by said post-effective amendments, which is summarized below, for a complete
statement of the proposed transaction.
By order dated June 30, 1978 (HCAR No. 20610), Appalachian was authorized to
enter into an agreement of sale (the "Agreement") with Mason County, West
Virginia (the "County") concerning the financing of pollution control
facilities (the "Facilities") at Appalachian's Philip Sporn and Mountaineer
Plants. Under the Agreement the County is to issue and sell its pollution
control revenue bonds (the "Revenue Bonds"), in one or more series, the
proceeds from which sales are to be deposited by the County with the trustee
(the "Trustee") under the indenture (the "Indenture") entered into between
the County and the Trustee pursuant to which Indenture the Revenue Bonds are
issued and secured. The proceeds will then be applied to the payment of the
costs of construction of the Facilities, originally estimated at
$120,000,000, or in the case of proceeds from the sale of refunding bonds, to
the payment of the principal, premium (if any) and/or interest on Revenue
Bonds to be refunded. Appalachian conveyed an undivided interest in a
portion of the Facilities to the County, which portion the County sold to
Appalachian under an installment sales arrangement requiring Appalachian to
pay as the purchase price semi-annual installments in such an amount
(together with other monies held by the Trustee under the Indenture for that
purpose) as to enable the County to pay, when due, the interest and principal
on the Revenue Bonds. Jurisdiction was reserved in the order of June 30,
1978, with respect to the payment of the purchase price of the Facilities by
installment payments insofar as such payments were affected by the interest
rate or rates of the Revenue Bonds to be issued and sold by the County.
The County has issued and sold ten series of bonds, Series A, B, C, D, E, F,
G, H, I and J, respectively. By orders dated June 30, 1978, (HCAR No.
20610), June 14, 1979 (HCAR No. 21103), February 20, 1981 (HCAR No. 21927),
January 25, 1984 (HCAR No. 23208), April 6, 1984 (HCAR No. 23277), March 14,
1985 (HCAR No. 23630), January 11, 1990 (HCAR No. 25023), October 16, 1990
(HCAR No. 25170),May 21, 1992 (HCAR No. 25542) and October 7, 1992 (HCAR No.
25650), such jurisdiction was released concerning the sales of the Revenue
Bonds in the principal amounts of $40,000,000, $50,000,000, $40,000,000,
$30,000,000, $30,000,000, $30,000,000, $30,000,000, $10,000,000, $40,000,000
and $50,000,000, respectively, as such sales affected the purchase price to
Appalachian.
By post-effective amendment it is stated that the County now proposes to
issue and sell a series of refunding bonds (the "Refunding Bonds") in the
aggregate principal amount of $30,000,000, the net proceeds from the sale of
which will be used to provide for the principal payment required for the
refunding prior to their stated maturity of $30,000,000 principal amount of
Revenue Bonds previously issued by the County. The Refunding Bonds will be
issued under and secured by the Indenture and a tenth supplemental indenture,
will bear interest semi-annually and will mature at a date or dates not more
than forty years from the date of issuance.
It is contemplated that the Refunding Bonds will be sold by the County
pursuant to arrangements with a group of underwriters.
It is stated that the State Corporation Commission of Virginia has
jurisdiction over the proposed transaction and that no other state commission
and no federal commission, other than this Commission, has jurisdiction
thereover.
The Application or Declaration 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 __________ __, 1999 to the Secretary, Securities
and Exchange Commission, Washington, D.C. 20549, and serve a copy on the
applicant or declarant at the address specified above. Proof of service (by
affidavit or, in case of any 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 Application or
Declaration, as filed or as it may be amended, may be permitted to become
effective.
For the Commission, by the Office of Public Utility Regulation, pursuant to
delegated authority.
Jonathan G. Katz
Secretary
