File No.
70-10283
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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AMENDMENT
No. 3 to |
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FORM
U-1 |
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APPLICATION
OR DECLARATION
under
the
PUBLIC
UTILITY HOLDING COMPANY ACT OF 1935
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AMERICAN
ELECTRIC POWER COMPANY, INC.
1
Riverside Plaza, Columbus, Ohio 43215
(Name of
company filing this statement and
addresses
of principal executive offices)
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AMERICAN
ELECTRIC POWER COMPANY, INC.
1
Riverside Plaza, Columbus, Ohio 43215
(Name of
top registered holding company
parent of
each applicant or declarant)
* *
*
John B.
Keane, 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., a holding company registered under the Public
Utility Holding Company Act of 1935, hereby amends its Application-Declaration
on Form U-1 in File No. 070-10283, as follows:
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1. |
By
amending and restated Item 3 in its
entirety: |
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ITEM
3. |
APPLICABLE
STATUTORY PROVISIONS |
AEP
considers that Sections 6(a), 7 and 12(e) of the 1935 Act and Rules 23, 42, 54,
62 and 65 of the Commission thereunder may be applicable to the proposed
transaction.
Compliance
with Rule 54
The
proposed transaction is also subject to Rule 54. Rule 54 provides that, in
determining whether to approve the issue or sale of any securities for purposes
other than the acquisition of any “exempt wholesale generator” (“EWG”) or
“foreign utility company” (“FUCO”) or other transactions unrelated to EWGs or
FUCOs, the Commission shall not consider the effect of the capitalization or
earnings of subsidiaries of a registered holding company that are EWGs or FUCOs
if the requirements of Rule 53(a), (b) and (c) are satisfied. Under Rule 53(a),
the Commission shall not make certain specified findings under Sections 7 and 12
in connection with a proposal by a holding company to issue securities for the
purpose of acquiring the securities of or other interest in an EWG, or to
guarantee the securities of an EWG, if each of the conditions in paragraphs
(a)(1) through (a)(4) thereof are met, provided that none of the conditions
specified in paragraphs (b)(1) through (b)(3) of Rule 53 exists. Set forth below
is a discussion of the compliance with Rule 53 for AEP.
AEP
consummated the merger with Central and South West Corporation, now AEP
Utilities, Inc. (“CSW”), on June 15, 2000 pursuant to an order dated June 14,
2000 (HCAR No. 35-27186), 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 (the “Rule 53(c) Order”).
AEP
currently meets all of the conditions of Rule 53(a). At March 31, 2005, AEP’s
“aggregate investment”, as defined in Rule 53(a)(1), in EWGs and FUCOs was
approximately $211 million, or about 11% of AEP’s “consolidated retained
earnings”, also as defined in Rule 53(a)(1), for the four quarters ended March
31, 2005 ($1.962 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. Further, none
of the circumstances described in Rule 53(b) has occurred or is
continuing.
Applicant
respectfully submits that AEP meets the requirements of Rule 53(c). If the
effect of the capitalization and earnings of EWGs and FUCOs in which AEP has an
ownership interest upon the AEP holding company system were considered, there
would be no basis for the Commission to withhold or deny approval for the
proposal made in this Application-Declaration. The action requested in the
instant filing would not, by itself, or even considered in conjunction with the
effect of the capitalization and earnings of AEP’s EWGs and FUCOs, have a
material adverse effect on the financial integrity of the AEP system, or an
adverse impact on AEP’s Utility Subsidiaries1 , their
customers, or the ability of state commissions to protect such public utility
customers. The Rule 53(c) Order was predicated, in part, upon an assessment of
AEP’s overall financial condition which took into account, among other factors,
AEP’s consolidated capitalization ratio and the growth trend in AEP retained
earnings.
As of
December 31, 1999, the most recent period for which financial statement
information was evaluated in the 53(c) Order, AEP’s consolidated capitalization
(including CSW on a pro forma basis) consisted of 37.3% common and preferred
equity, 61.3% debt and $335 million principal amount of certain subsidiary
obligated mandatorily redeemable preferred securities of subsidiary trusts
holding solely junior subordinated debentures of such subsidiaries (“Trust
Preferred Securities”) representing 1.4%.
As of
March 31, 2005, AEP’s consolidated capitalization consisted of 59.8% debt, 40.2%
common and preferred equity (consisting of common stock representing 39.9% and
$61 million principal amount of preferred stock representing 0.3%).
Since the
date of the Rule 53(c) Order, there has been an increase in AEP’s consolidated
equity capitalization ratio. In addition, the Utility Subsidiaries, which will
have a significant influence on the determination of the AEP corporate rating,
continue to show strong financial statistics as measured by the rating
agencies.
As of
December 31, 1999, Standard and Poor’s (“S&P”) rating of secured debt for
AEP’s Utility Subsidiaries was as follows: Appalachian Power Company, A;
Columbus Southern Power Company, A-; Indiana Michigan Power Company, A-;
Kentucky Power Company, A; Ohio Power Company, A-; AEP Texas Central Company
(formerly Central Power and Light Company), A; Public Service Company of
Oklahoma, AA-; Southwestern Electric Power Company, AA-; and AEP Texas North
Company, A. AEP did not have a long-term debt rating as of December 31,
1999.
As of
March 31, 2005, S&P’s rating of secured debt for AEP’s Utility Subsidiaries
was as follows: Appalachian Power Company, BBB; Columbus Southern Power Company,
BBB; Indiana Michigan Power Company, BBB; Kentucky Power Company, BBB, Ohio
Power Company, BBB, AEP Texas Central Company (formerly Central Power and Light
Company), BBB; Public Service Company of Oklahoma, BBB; Southwestern Electric
Power Company, BBB; and AEP Texas North Company (formerly, West Texas Utilities
Company), BBB. S&P’s rating of AEP’s unsecured debt was BBB as of March 31,
2005.
SIGNATURE
Pursuant
to the requirements of the Public Utility Holding Company Act of 1935, the
undersigned company has duly caused this statement to be signed on its behalf by
the undersigned thereunto duly authorized.
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AMERICAN
ELECTRIC POWER COMPANY, INC. |
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By: /s/
Thomas G. Berkemeyer |
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Name: Thomas G.
Berkemeyer |
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Title: Assistant
Secretary |
June 1,
2005
1
Appalachian Power Company (“APCo”), Columbus Southern Power Company (“CSPCo”),
Indiana Michigan Power Company (“I&M”), Kentucky Power Company (“KPCo”),
Ohio Power Company (“OPCo”), AEP Texas Central Company (“TCC”), Public Service
Company of Oklahoma (“PSO”), Southwestern Electric Power Company (“SWEPCo”) and
AEP Texas North Company (formerly West Texas Utilities Company) (“TNC”),
collectively, the “Utility
Subsidiaries”).