File No. 70-10057
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO.1
to
FORM U-1
APPLICATION OR DECLARATION
under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
***
AMERICAN ELECTRIC POWER COMPANY, INC.
AEP GENERATING COMPANY
APPALACHIAN POWER COMPANY
CENTRAL POWER AND LIGHT COMPANY
COLUMBUS SOUTHERN POWER COMPANY
INDIANA MICHIGAN POWER COMPANY
KENTUCKY POWER COMPANY
KINGSPORT POWER COMPANY
OHIO POWER COMPANY
PUBLIC SERVICE COMPANY OF OKLAHOMA
SOUTHWESTERN ELECTRIC POWER COMPANY
WEST TEXAS UTILITIES COMPANY
WHEELING POWER COMPANY
1 Riverside Plaza, Columbus, Ohio 43215
(Name of company or companies filing this statement
and addresses of principal executive offices)
***
AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza, Columbus,
Ohio 43215 (Name of top registered holding company
parent of each applicant or declarant)
***
Armando A. Pena, Treasurer
Jeffrey D. Cross, Senior Vice President and General Counsel
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
(Names and addresses of agents for service)
American Electric Power Company, Inc. ("AEP"), a registered holding
company, and its twelve (12) electric utility subsidiary companies, AEP
Generating Company ("Generating"), Appalachian Power Company ("Appalachian"),
Central Power and Light Company ("Central"), Columbus Southern Power Company
("Columbus"), Indiana Michigan Power Company ("Indiana"), Kentucky Power Company
("Kentucky"), Kingsport Power Company ("Kingsport"), Ohio Power Company
("Ohio"), Public Service Company of Oklahoma ("Oklahoma"), Southwestern Electric
Power Company ("Southwestern"), West Texas Utilities Company ("West Texas"), and
Wheeling Power Company ("Wheeling") hereby amend and restate the first six
paragraphs of ITEM I of their joint Application or Declaration on Form U-1 in
File No. 070-10057 to request authorization to sell certain utility assets
without prior Commission approval.
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION
Background.
By HCAR Release No. 26031 dated April 20, 1994, the Commission amended
Rule 44(b) under the Public Utility Holding Company Act of 1935 (the "Act").
This amendment, among others, was part of a general attempt to modernize the
rules under the Act and, in particular, to reduce undue regulatory burdens on
companies in a registered holding company system. Rule 44, adopted under Section
12(d) of the Act, governs sales of utility securities and utility assets1 by a
registered holding company to any person. Previously, the rule required approval
by this Commission of sales of securities or of utility assets, if the total
consideration to be received was in excess of $100,000 and the acquisition by
the buyer was not subject to Commission approval. Rule 44, as amended, provides
an exemption for all sales up to an annual aggregate amount of $5 million for
all system operating subsidiaries when the acquisition of the securities or
utility assets does not require Commission approval. By HCAR Release No.
35-26622 dated December 12, 1996 in this file the eight operating subsidiaries
of AEP were authorized to sell utility assets for consideration up to $5,000,000
per operating subsidiary per calendar year. This authority was granted through
December 31, 2001.
Proposed Transaction
AEP and its electric utility subsidiaries request authority in this
file to increase the authorized amount of sales of utility assets to
nonaffiliated from $5,000,000 per operating company per calendar year to
$15,000,000 per operating company per calendar year through September 30, 2006.
The electric utility industry is in transition to a more competitive
environment. This is particularly true in Texas which has adopted measures
requiring restructuring of utilities. In response to requests of customers and
as mandated by the Public Utility Commission of Texas, the AEP System is
required to transfer substations and transmission and distribution lines or
other utility assets that serve the customer, if so requested by the customer,
to that customer or to potential customers. In addition, there are routine
transfers of poles to joint users. For example, Indiana is a party to a Letter
Agreement dated December 14, 2000 with Verizon North, Inc. (formerly known as
GTE North Incorporated "Verizon North") and a Joint Pole Use Agreement dated
January 1, 1995. Pursuant to these agreements, Indiana has agreed to transfer
25,000 poles in Indiana and Michigan to Verizon North for approximately
$5,612,000 in order to balance ownership of poles in accordance with the
agreements. This transaction alone would exceed the $5,000,000 exemption. This
sale is being submitted to the Indiana Utility Regulatory Commission for its
approval. In addition, Kentucky is under contract to sell 3,750 poles for a
total $2,000,000.
Therefore, it is requested that, without further Commission approval,
AEP and its utility subsidiaries, including any affiliated public utility
company succeeding to the utility assets of the existing public utility
companies as a result of restructuring transactions contemplated in File
70-9785, be permitted to transfer utility assets to nonaffiliated, both
customers and no customers, for a period ending September 30, 2006. The
consideration for the transfers will be not less than the net book value of the
assets and will not exceed $15,000,000 per operating subsidiary per calendar
year . In the case of a lease, the lease payments will be valued over the term
of the lease and be counted against the exemption amount in the initial year of
the lease.
For each Applicant, utility assets are recorded in Utility Plant In
Service Account No. 101.
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned have duly caused this amendment to be signed on their
behalf by the undersigned thereunto duly authorized.
AMERICAN ELECTRIC POWER COMPANY, INC.
AEP GENERATING COMPANY
APPALACHIAN POWER COMPANY
CENTRAL POWER AND LIGHT COMPANY
COLUMBUS SOUTHERN POWER COMPANY
INDIANA MICHIGAN POWER COMPANY
KENTUCKY POWER COMPANY
KINGSPORT POWER COMPANY
OHIO POWER COMPANY
PUBLIC SERVICE COMPANY OF OKLAHOMA
SOUTHWESTERN POWER COMPANY
WEST TEXAS UTILITIES COMPANY
WHEELING POWER COMPANY
By: /s/ Thomas G. Berkemeyer
Assistant Secretary
Dated April 26, 2002
--------
1 Section 1 (a) (18) of the Act defines "utility assets" as "the facilities, in
place, of any electric utility company or gas utility company for the
production, transmission, transportation, or distribution of electric energy or
natural or manufactured gas", such as poles, non-roadway lighting, and electric
distribution facilities, including substations serving a single customer and
generally located on the buyer's property.