AEPCO, APCO, CSP, I&M, OPCO re major modification
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of report (Date of earliest event reported)
|
April
2, 2007
|
AMERICAN
ELECTRIC POWER COMPANY,
INC.
|
(Exact
Name of Registrant as Specified in Its Charter)
1-3525
|
New
York
|
13-4922640
|
(Commission
File Number)
|
(State
or Other Jurisdiction of Incorporation)
|
(IRS
Employer Identification No.)
|
APPALACHIAN
POWER COMPANY
|
(Exact
Name of Registrant as Specified in Its Charter)
1-3457
|
Virginia
|
54-0124790
|
(Commission
File Number)
|
(State
or Other Jurisdiction of Incorporation)
|
(IRS
Employer Identification No.)
|
COLUMBUS
SOUTHERN POWER COMPANY
|
(Exact
Name of Registrant as Specified in Its Charter)
1-2680
|
Ohio
|
31-4154203
|
(Commission
File Number)
|
(State
or Other Jurisdiction of Incorporation)
|
(IRS
Employer Identification No.)
|
INDIANA
MICHIGAN POWER COMPANY
|
(Exact
Name of Registrant as Specified in Its Charter)
1-3570
|
Indiana
|
35-0410455
|
(Commission
File Number)
|
(State
or Other Jurisdiction of Incorporation)
|
(IRS
Employer Identification No.)
|
(Exact
Name of Registrant as Specified in Its Charter)
1-6543
|
Ohio
|
31-4271000
|
(Commission
File Number)
|
(State
or Other Jurisdiction of Incorporation)
|
(IRS
Employer Identification No.)
|
1
Riverside Plaza, Columbus, OH
|
43215
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[
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|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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[
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
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[
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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As
previously disclosed, the
Federal
Environmental Protection Agency (“EPA”), certain special interest groups and a
number of states alleged that Appalachian Power Company (APCo), Columbus
Southern Power Company (CSP), Indiana Michigan Power Company (I&M), Ohio
Power Company (OPCo) and other nonaffiliated utilities modified certain units
at
coal-fired generating plants in violation of the new
source review (“NSR”)
requirements of the Clean
Air
Act (“CAA”).
The EPA filed its complaints against APCo, CSP, I&M, and OPCo in two cases
pending in the U.S. District Court for the Southern District of Ohio. The
alleged modifications occurred at their generating units over a twenty-year
period. In one of the cases, a bench trial on the liability issues was held
during July 2005. In June 2006, that court stayed the liability decision pending
the issuance of a decision by the U.S. Supreme Court in the case of an
unaffiliated utility (Duke Energy), which is a similar NSR proceeding. A bench
trial on remedy issues, if necessary, is scheduled to begin in that case four
months after the U.S. Supreme Court decision is issued. No trial date has been
set in the second case.
Under
the
CAA, if a plant undertakes a major modification that results in an emissions
increase, permitting requirements might be triggered and the plant may be
required to install additional pollution control technology. This requirement
does not apply to routine maintenance, replacement of degraded equipment or
failed component or other repairs needed for the reliable, safe and efficient
operation of the plant. The CAA authorizes civil penalties of up to $27,500
($32,500 after March 15, 2004) per day per violation at each generating unit.
In
2001, the District Court ruled claims for civil penalties based on activities
that occurred more than five years before the filing date of the complaints
cannot be imposed. There is no time limit on claims for injunctive
relief.
On
April
2, 2007, the U. S. Supreme Court reversed the Fourth Circuit Court of Appeals’
decision that had supported the statutory construction argument of Duke Energy
in its NSR
proceeding. In a unanimous decision, the Court ruled that the EPA was not
obligated to define "major modification" in two different CAA
provisions in the same way. The Court also found that the Fourth Circuit’s
interpretation of “major modification” as applying only to projects that
increased hourly emission rates amounted to an invalidation of the relevant
EPA
regulations, which under the CAA
can only
be challenged in the Court of Appeals within 60 days of the EPA rulemaking.
The
Court did acknowledge, however, that Duke Energy may argue on remand that the
EPA has been inconsistent in its interpretations of the CAA
and the
regulations and may not retroactively change 20 years of accepted practice.
In
addition to providing guidance on certain of the merits of the NSR proceedings
brought against APCo, CSP, I&M and OPCo in U.S. District Court for the
Southern District of Ohio, the Court’s issuance of a ruling in the Duke Energy
case will likely have a direct impact on the timing of the NSR proceeding
brought against these companies. First, the court in the case for which a trial
on liability issues has been conducted is likely to complete its consideration
of the issues and render a liability decision. Second, the bench trial on remedy
issues, if necessary, is likely to be scheduled to begin in four
months.
This
report made by AEP contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934. Although AEP believes that
its expectations are based on reasonable assumptions, any such statements may
be
influenced by factors that could cause actual outcomes and results to be
materially different from those projected. Among the factors that could cause
actual results to differ materially from those in the forward-looking statements
are:
Electric
load and customer growth; weather conditions, including storms; available
sources and costs of, and transportation for, fuels and the creditworthiness
of
fuel suppliers and transporters; availability of generating capacity and the
performance of AEP’s generating plants; the ability to recover regulatory assets
and stranded costs in connection with deregulation; the ability to recover
increases in fuel and other energy costs through regulated or competitive
electric rates; the ability to build or acquire generating capacity when needed
at acceptable prices and terms and to recover those costs through applicable
rate cases; new legislation, litigation and government regulation including
requirements for reduced emissions of sulfur, nitrogen, mercury, carbon and
other substances; timing and resolution of pending and future rate cases,
negotiations and other regulatory decisions (including rate or other recovery
for new investments, transmission service and environmental compliance);
resolution of litigation (including pending Clean Air Act enforcement actions
and disputes arising from the bankruptcy of Enron Corp.); AEP’s ability to
constrain its operation and maintenance costs; AEP’s ability to sell assets at
acceptable prices and on other acceptable terms, including rights to share
in
earnings derived from the assets subsequent to their sale; the economic climate
and growth in its service territory and changes in market demand and demographic
patterns; inflationary trends; its ability to develop and execute a strategy
based on a view regarding prices of electricity, natural gas and other
energy-related commodities; changes in the creditworthiness and number of
participants in the energy trading market; changes in the financial markets,
particularly those affecting the availability of capital and AEP’s ability to
refinance existing debt at attractive rates; actions of rating agencies,
including changes in the ratings of debt; volatility and changes in markets
for
electricity, natural gas and other energy-related commodities; changes in
utility regulation, including membership and integration into regional
transmission structures; accounting pronouncements periodically issued by
accounting standard-setting bodies; the performance of AEP’s pension and other
postretirement benefit plans; prices for power that AEP generates and sells
at
wholesale; changes in technology, particularly with respect to new, developing
or alternative sources of generation and other risks and unforeseen events,
including wars, the effects of terrorism (including increased security costs),
embargoes and other catastrophic events.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
|
AMERICAN
ELECTRIC POWER COMPANY, INC.
|
|
APPALACHIAN
POWER COMPANY
|
|
COLUMBUS
SOUTHERN POWER COMPANY
|
|
INDIANA
MICHIGAN POWER COMPANY
|
|
OHIO
POWER COMPANY
|
|
|
|
|
By:
|
/s/
Thomas G. Berkemeyer
|
|
Name:
|
Thomas
G. Berkemeyer
|
April
3,
2007