File No. 70-9353
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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POST-EFFECTIVE AMENDMENT NO. 5
TO
FORM U-1
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APPLICATION OR DECLARATION
under the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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AMERICAN ELECTRIC POWER COMPANY, INC.
AEP RESOURCES, INC.
AEP ENERGY SERVICES, INC.
1 Riverside Plaza, Columbus, Ohio 43215
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(Name of company or companies filing this statement
and addresses of principal executive offices)
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AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza, Columbus, Ohio 43215
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(Name of top registered holding company
parent of each applicant or declarant)
A. A. Pena, Senior Vice President and Treasurer
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
* * *
Susan Tomasky, General Counsel
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
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(Names and addresses of agents for service)
American Electric Power Company, Inc. ("AEP"), a holding company
registered under the Public Utility Holding Company Act of 1935, as amended
("1935 Act"), and its wholly-owned non-utility subsidiaries, AEP Energy
Services, Inc. ("AEPES") and AEP Resources, Inc. ("Resources") (collectively,
"Applicants"), hereby request that the Commission release jurisdiction over
certain financing transactions, as described below.
Summary of Existing Authority
By order dated November 2, 1998 (HCAR No. 26933 (the "1998 Order"),
the Commission authorized Applicants to acquire nonutility energy assets (the
"Energy Assets") in the United States that would be incidental to, and would
assist, Applicants and their subsidiaries in connection with the marketing,
brokering and trading of energy commodities. These assets include, without
limitation, natural gas production, gathering, processing, storage and
transportation facilities and equipment, liquid oil reserves and storage
facilities, and associated facilities. Applicants were authorized to invest up
to $800 million through December 31, 2003 in Energy Assets or in the equity
securities of companies substantially all of whose physical properties consist
of Energy Assets. By order dated December 21, 2000 (HCAR No. 27313), the
Commission increased the investment limitation in the 1998 Order to $2 billion.
In the 1998 Order, the Commission authorized Applicants to engage in
certain financing transactions in connection with the acquisition of Energy
Assets but reserved jurisdiction over the issue and sale of securities by AEP or
any Special Purpose Subsidiary other than common stock, guarantees or short-term
debt:
AEP also proposes to issue securities to finance the acquisition of Energy
Assets or of the equity securities of Energy Asset Companies. Securities
which AEP proposes to issue would include common stock, unsecured
long-term debt securities and guaranties of indebtedness issued by AEPES,
Resources and any existing or new, direct or indirect subsidiary of AEPES
or Resources ("Applicant Subsidiaries"). These guaranties would also
include guaranties of securities issued by any existing or new, direct or
indirect special purpose financing subsidiary of Applicants organized
specifically for the purpose of financing the acquisition of Energy Assets
or of the equity securities of Energy Asset Companies ("Special Purpose
Subsidiary"). In addition, Applicants request authority during the
Authorization Period for Applicant Subsidiaries, as well as any Special
Purpose Subsidiary, to issue debt or equity securities to finance these
acquisitions, including guarantees as appropriate, to the extent the
issuances are not exempt under Rule 52 or Rule 45(b). AEP requests that
the Commission reserve jurisdiction over the issuance and sale by AEP or
any Special Purpose Subsidiary of securities (other than common stock,
guarantees or short-term debt), pending completion of the record.
The 1998 Order was issued before the Commission had occasion to
revisit the issuance of unsecured long-term debt securities by registered
holding companies. Since that time, the Commission has authorized a number of
registered holding companies, including AEP, to issue unsecured long-term debt
securities, either directly or through special purpose financing subsidiaries.
In File No. 70-9729, the Commission authorized AEP to organize and acquire all
of the common stock or other equity interests of one or more financing
subsidiaries for the purpose of effecting various financing transactions through
June 30, 2004, involving the issuance and sale of up to $1.5 billion (cash
proceeds to AEP) in any combination of preferred securities, unsecured debt
securities, interest rate hedges, anticipatory hedges, stock purchase contracts
and stock purchase units, as well as stock issuable under the stock purchase
contracts and stock purchase units. The Commission further authorized AEP to
effect directly such financing transactions involving preferred securities,
unsecured debt securities, stock purchase contracts or stock purchase units.
(HCAR No. 27382 (April 20, 2001), as supplemented, HCAR No. 27408 (May 29, 2001)
(authorizing unsecured long-term debt financing for general corporate purposes).
Request For Authority
The Applicants hereby ask the Commission to release the jurisdiction
reserved in the 1998 Order, and to authorize AEP and any Special-Purpose
Subsidiary to engage, as well, in unsecured long-term borrowings and to provide
guarantees of long-term indebtedness issued by any Special Purpose Subsidiary
for the purpose of financing the acquisition of Energy Assets or the equity
securities of a company substantially all of whose physical properties consist
of Energy Assets, subject to the above investment limitations.
The requested authority is similar to that recently granted
Applicants in File No. 70-9729, with the distinction that the financing
authority in that matter was for general corporate purposes while the release of
jurisdiction sought here is intended specifically to facilitate the
previously-authorized acquisition of Energy Assets and Energy Asset Companies,
subject to existing investment limitations, thus providing needed flexibility to
enable the Applicants to implement their duly-authorized business plans in a
timely and cost-effective manner.
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Compliance with Rule 54
Rule 54 provides that, in determining whether to approve an application
which does not relate to any EWG or FUCO, the Commission shall not consider the
effect of the capitalization or earnings of any such EWG or FUCO which is a
subsidiary of a registered holding company if the requirements of Rule 53(a),
(b) and (c) are satisfied.
AEP consummated the merger with Central and South West Corporation on June
15, 2000 pursuant to an order issued June 14, 2000 (HCAR No. 27186), which
further authorized AEP to invest up to 100% of its consolidated retained
earnings, with consolidated retained earnings to be calculated on the basis of
the combined consolidated retained earnings of AEP and CSW (as extended pursuant
to HCAR No. 27316, December 26, 2000, the "Rule 53(c) Order").
AEP currently meets all of the conditions of Rule 53(a). At March 31,
2001, AEP's "aggregate investment", as defined in Rule 53(a)(1), in EWGs and
FUCOs was approximately $1.569 billion, or about 47.9% of AEP's "consolidated
retained earnings", also as defined in Rule 53(a)(1), for the four quarters
ended March 31, 2001 ($3.275 billion).
In addition, AEP has complied and will continue to comply with the
record-keeping requirements of Rule 53(a)(2), the limitation under Rule 53(a)(3)
on the use of operating company personnel to render services to EWGs and FUCOs,
and the requirements of Rule 53(a)(4) concerning the submission of copies of
certain filings under the 1935 Act to retail rate regulatory commissions.
AEP's consolidated retained earnings decreased on average approximately
1.32% per year over the last five years. In 2000, consolidated retained earnings
decreased $540 million, or 14.9%. AEP's interests in EWGs and FUCOs have made a
positive contribution to earnings over the four calendar years ending after the
Rule 53(c) Order. Accordingly, since the date of the Rule 53(c) Order, the
capitalization and earnings attributable to AEP's investments in EWGs and FUCOs
has not had an adverse impact on AEP's financial integrity.
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It is requested that the Commission issue its order on or before July 15,
2001. Applicants hereby (i) waive a recommended decision by a hearing officer;
(ii) waive a recommended decision by any other responsible officer or the
Commission; (iii) consent that the Division of Investment Management may assist
in the preparation of the Commission's decision; and (iv) waive a 30-day waiting
period between the issuance of the Commission's order and the date on which it
is to become effective.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned companies have duly caused this statement to be signed on
their behalf by the undersigned thereunto duly authorized.
AMERICAN ELECTRIC POWER COMPANY, INC.
AEP ENERGY SERVICES, INC.
AEP RESOURCES, INC.
By: _/s/ Thomas G. Berkemeyer_
Thomas G. Berkemeyer
Assistant Secretary
Dated: July 18, 2001