Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
___________________
FORM
10-K
___________________
(Mark
One)
x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the fiscal year ended December 31,
2007
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the transition period from __________
to_________
|
Commission
File Number
|
|
Registrants;
States of Incorporation;
Address and Telephone
Number
|
|
I.R.S.
Employer
Identification Nos.
|
|
1-3525
|
|
American
Electric Power Company, Inc. (A New York Corporation)
|
|
13-4922640
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|
1-3457
|
|
Appalachian
Power Company (A Virginia Corporation)
|
|
54-0124790
|
|
1-2680
|
|
Columbus
Southern Power Company (An Ohio Corporation)
|
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31-4154203
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1-3570
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|
Indiana
Michigan Power Company (An Indiana Corporation)
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35-0410455
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1-6543
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|
Ohio
Power Company (An Ohio Corporation)
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|
31-4271000
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0-343
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|
Public
Service Company of Oklahoma (An Oklahoma Corporation)
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73-0410895
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1-3146
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|
Southwestern
Electric Power Company (A Delaware Corporation)
1
Riverside Plaza, Columbus, Ohio 43215
Telephone
(614) 716-1000
|
|
72-0323455
|
Indicate
by check mark if the registrants with respect to American Electric Power
Company, Inc. and Appalachian Power Company, is each a well-known seasoned
issuer, as defined in Rule 405 on the Securities Act.
|
Yes x
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No. o
|
|
|
|
Indicate
by check mark if the registrants with respect to Columbus Southern Power
Company, Indiana Michigan Power Company, Ohio Power Company, Public
Service Company of Oklahoma and Southwestern Electric Power Company, are
well-known seasoned issuers, as defined in Rule 405 on the Securities
Act.
|
Yes o
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No. x
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|
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|
Indicate
by check mark if the registrants are not required to file reports pursuant
to Section 13 or Section 15(d) of the Exchange Act.
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Yes o
|
No. x
|
|
|
|
Indicate
by check mark whether the registrants (1) have filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject
to such filing requirements for the past 90 days.
|
Yes x
|
No. o
|
|
|
|
Indicate
by check mark if disclosure of delinquent filers with respect to
Appalachian Power Company or Ohio Power Company pursuant to Item 405 of
Regulation S-K (229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant’s knowledge, in definitive
proxy or information statements of Appalachian Power Company or Ohio Power
Company incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
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x
|
|
|
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|
Indicate
by check mark whether American Electric Power Company, Inc. is a large
accelerated filer, an accelerated filer, or a non-accelerated
filer. See definition of ‘accelerated filer and large
accelerated filer’ in Rule 12b-2 of the Exchange Act. (Check
One)
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Large
accelerated filer x
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Accelerated
filer o
|
Non-accelerated
filer o
|
|
|
|
Indicate
by check mark whether Appalachian Power Company, Columbus Southern Power
Company, Indiana Michigan Power Company, Ohio Power Company, Public
Service Company of Oklahoma and Southwestern Electric Power Company are
large accelerated filers, accelerated filers, or non-accelerated
filers. See definition of ‘accelerated filer and large
accelerated filer’ in Rule 12b-2 of the Exchange Act. (Check
One)
|
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer x
|
Indicate
by check mark if the registrants are shell companies, as defined in Rule
12b-2 of the Exchange Act.
|
Yes o
|
No. x
|
Columbus
Southern Power Company, Indiana Michigan Power Company and Public Service
Company of Oklahoma meet the conditions set forth in General Instruction I(1)(a)
and (b) of Form 10-K and are therefore filing this Form 10-K with the reduced
disclosure format specified in General Instruction I(2) to such Form
10-K.
Securities
registered pursuant to Section 12(b) of the Act:
Registrant
|
|
Title of each class
|
|
Name
of each exchange
on
which registered
|
American
Electric Power Company, Inc.
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Common
Stock, $6.50 par value
|
|
New
York Stock Exchange
|
Appalachian
Power Company
|
|
None
|
|
|
Columbus
Southern Power Company
|
|
None
|
|
|
Indiana
Michigan Power Company
|
|
6%
Senior Notes, Series D, Due 2032
|
|
New
York Stock Exchange
|
Ohio
Power Company
|
|
None
|
|
|
Public
Service Company of Oklahoma
|
|
6%
Senior Notes, Series B, Due 2032
|
|
New
York Stock Exchange
|
Southwestern
Electric Power Company
|
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None
|
|
|
Securities
registered pursuant to Section 12(g) of the Act:
Registrant
|
|
Title of each class
|
American
Electric Power Company, Inc.
|
|
None
|
Appalachian
Power Company
|
|
4.50%
Cumulative Preferred Stock, Voting, no par value
|
Columbus
Southern Power Company
|
|
None
|
Indiana
Michigan Power Company
|
|
None
|
Ohio
Power Company
|
|
4.50%
Cumulative Preferred Stock, Voting, $100 par value
|
Public
Service Company of Oklahoma
|
|
None
|
Southwestern
Electric Power Company
|
|
4.28%
Cumulative Preferred Stock, Non-Voting, $100 par value
|
|
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4.65%
Cumulative Preferred Stock, Non-Voting, $100 par value
|
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5.00%
Cumulative Preferred Stock, Non-Voting, $100 par
value
|
|
|
Aggregate market value of
voting and non-voting common equity held by non-affiliates of the
registrants as of
June 30, 2007, the last trading date of the registrants’ most recently
completed second fiscal quarter
|
|
Number
of shares of common stock outstanding of the registrants at
December
31, 2007
|
American
Electric Power Company, Inc.
|
|
$17,979,507,421
|
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400,426,704
|
|
|
|
|
($6.50
par value)
|
Appalachian
Power Company
|
|
None
|
|
13,499,500
|
|
|
|
|
(no
par value)
|
Columbus
Southern Power Company
|
|
None
|
|
16,410,426
|
|
|
|
|
(no
par value)
|
Indiana
Michigan Power Company
|
|
None
|
|
1,400,000
|
|
|
|
|
(no
par value)
|
Ohio
Power Company
|
|
None
|
|
27,952,473
|
|
|
|
|
(no
par value)
|
Public
Service Company of Oklahoma
|
|
None
|
|
9,013,000
|
|
|
|
|
($15
par value)
|
Southwestern
Electric Power Company
|
|
None
|
|
7,536,640
|
|
|
|
|
($18
par value)
|
Note
On Market Value Of Common Equity Held By Non-Affiliates
American
Electric Power Company, Inc. owns, directly or indirectly, all of the common
stock of Appalachian Power Company, Columbus Southern Power Company, Indiana
Michigan Power Company, Ohio Power Company, Public Service Company of Oklahoma
and Southwestern Electric Power Company (see Item 12 herein).
Documents
Incorporated By Reference
Description
|
Part
of Form 10-K
Into
Which Document Is Incorporated
|
|
|
Portions
of Annual Reports of the following companies for
the
fiscal year ended December 31, 2007:
|
Part
II
|
American Electric Power Company,
Inc.
|
|
Appalachian Power
Company
|
|
Columbus Southern Power
Company
|
|
Indiana Michigan Power
Company
|
|
Ohio Power
Company
|
|
Public Service Company of
Oklahoma
|
|
Southwestern Electric Power
Company
|
|
|
|
Portions
of Proxy Statement of American Electric Power Company, Inc. for 2008
Annual Meeting of Shareholders.
|
Part
III
|
|
|
Portions
of Information Statements of the following companies for 2008 Annual
Meeting of Shareholders:
|
Part
III
|
Appalachian Power
Company
|
|
Ohio Power
Company
|
|
This
combined Form 10-K is separately filed by American Electric Power Company, Inc.,
Appalachian Power Company, Columbus Southern Power Company, Indiana Michigan
Power Company, Ohio Power Company, Public Service Company of Oklahoma
and Southwestern Electric Power Company. Information contained herein
relating to any individual registrant is filed by such registrant on its own
behalf. Except for American Electric Power Company, Inc., each registrant makes
no representation as to information relating to the other
registrants.
You
can access financial and other information at AEP’s website, including AEP’s
Principles of Business Conduct (which also serves as a code of ethics applicable
to Item 10 of this Form 10-K), certain committee charters and Principles of
Corporate Governance. The address is www.AEP.com. AEP makes
available, free of charge on its website, copies of its annual report on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments
to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 as soon as reasonably practicable after filing
such material electronically or otherwise furnishing it to the SEC.
TABLE
OF CONTENTS
Item
Number
|
|
|
Glossary
of Terms
|
|
Forward-Looking
Information
|
PART
I
|
1
|
|
Business
|
|
|
General
|
|
|
Utility
Operations
|
|
|
MEMCO
Operations
|
|
|
Generation
and Marketing
|
|
|
Other
|
1
|
A
|
Risk
Factors
|
1
|
B
|
Unresolved
Staff Comments
|
2
|
|
Properties
|
|
|
Generation
Facilities
|
|
|
Transmission
and Distribution Facilities
|
|
|
Titles
|
|
|
System
Transmission Lines and Facility Siting
|
|
|
Construction
Program
|
|
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Potential
Uninsured Losses
|
3
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|
Legal
Proceedings
|
4
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Submission
Of Matters To A Vote Of Security Holders
|
|
|
Executive
Officers of the Registrant
|
PART
II
|
5
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|
Market
For Registrant’s Common Equity, Related Stockholder Matters
And
Issuer Purchases Of Equity Securities
|
6
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|
Selected
Financial Data
|
7
|
|
Management’s
Discussion And Analysis Of Financial Condition And
Results
Of Operations
|
7
|
A
|
Quantitative
And Qualitative Disclosures About Market Risk
|
8
|
|
Financial
Statements And Supplementary Data
|
9
|
|
Changes
In And Disagreements With Accountants On Accounting
And
Financial Disclosure
|
9
|
A
|
Controls
And Procedures
|
9
|
B
|
Other
Information
|
PART
III
|
10
|
|
Directors,
Executive Officers and Corporate Governance
|
11
|
|
Executive
Compensation
|
12
|
|
Security
Ownership Of Certain Beneficial Owners And Management and Related
Stockholder Matters
|
13
|
|
Certain
Relationships And Related Transactions, and Director
Independence
|
14
|
|
Principal
Accounting Fees And Services
|
PART
IV
|
15
|
|
Exhibits,
Financial Statement Schedules
|
|
|
Financial
Statements
|
|
|
Signatures
|
|
|
Index
to Financial Statement Schedules
|
|
|
Report
of Independent Registered Public Accounting Firm
|
|
|
Exhibit
Index
|
The
following abbreviations or acronyms used in this Form 10-K are defined
below:
Abbreviation or
Acronym
|
Definition
|
AEGCo
|
AEP
Generating Company, an electric utility subsidiary of
AEP
|
AEP
or parent
|
American
Electric Power Company, Inc.
|
AEP
East companies
|
APCo,
CSPCo, I&M, KPCo and OPCo
|
AEP
Power Pool
|
APCo,
CSPCo, I&M, KPCo and OPCo, as parties to the Interconnection
Agreement
|
AEPSC
|
American
Electric Power Service Corporation, a service company subsidiary of
AEP
|
AEP
System or the System
|
The
American Electric Power System, an integrated electric utility system,
owned and operated by AEP’s electric utility
subsidiaries
|
AEP
West companies
|
PSO,
SWEPCo, TCC and TNC
|
AEP
Utilities
|
AEP
Utilities, Inc., a subsidiary of AEP, formerly, Central and South West
Corporation
|
AFUDC
|
Allowance
for funds used during construction (the net cost of borrowed funds, and a
reasonable rate of return on other funds, used for construction under
regulatory accounting)
|
ALJ
|
Administrative
law judge
|
APCo
|
Appalachian
Power Company, a public utility subsidiary of AEP
|
APSC
|
Arkansas
Public Service Commission
|
Buckeye
|
Buckeye
Power, Inc., an unaffiliated corporation
|
CAA
|
Clean
Air Act
|
CAAA
|
Clean
Air Act Amendments of 1990
|
CERCLA
|
Comprehensive
Environmental Response, Compensation and Liability Act of
1980
|
Cook
Plant
|
The
Donald C. Cook Nuclear Plant (2,143 MW), owned by I&M, and located
near Bridgman, Michigan
|
CSPCo
|
Columbus
Southern Power Company, a public utility subsidiary of
AEP
|
CSW
|
Central
and South West Corporation, a public utility holding company that merged
with AEP in June 2000.
|
CSW
Operating Agreement
|
Agreement,
dated January 1, 1997, as amended, originally by and among PSO, SWEPCo,
TCC and TNC, currently by and between PSO and SWEPCO governing generating
capacity allocation. AEPSC acts as the agent for the
parties.
|
DOE
|
United
States Department of Energy
|
Dow
|
The
Dow Chemical Company, and its affiliates collectively, unaffiliated
companies
|
DP&L
|
The
Dayton Power and Light Company, an unaffiliated utility
company
|
Duke
Carolina
|
Duke
Energy Carolinas, LLC
|
Duke
Indiana
|
Duke
Energy Indiana, Inc.
|
Duke
Ohio
|
Duke
Energy Ohio, Inc.
|
EMF
|
Electric
and Magnetic Fields
|
EPA
|
United
States Environmental Protection Agency
|
EPACT
|
The
Energy Policy Act of 2005
|
ERCOT
|
Electric
Reliability Council of Texas
|
FERC
|
Federal
Energy Regulatory Commission
|
Fitch
|
Fitch
Ratings, Inc.
|
FPA
|
Federal
Power Act
|
I&M
|
Indiana
Michigan Power Company, a public utility subsidiary of
AEP
|
Interconnection
Agreement
|
Agreement,
dated July 6, 1951, as amended, by and among APCo, CSPCo, I&M, KPCo
and OPCo, defining the sharing of costs and benefits associated with their
respective generating plants
|
IURC
|
Indiana
Utility Regulatory Commission
|
KPCo
|
Kentucky
Power Company, a public utility subsidiary of AEP
|
LLWPA
|
Low-Level
Waste Policy Act of 1980
|
Lawrenceburg
Plant
|
A
1,146 MW gas-fired unit owned by AEGCo and located near Lawrenceburg,
Indiana
|
LPSC
|
Louisiana
Public Service Commission
|
MEMCO
|
AEP
MEMCO LLC, an inland river transportation subsidiary operating primarily
on the Ohio, Illinois, and Lower Mississippi rivers
|
MISO
|
Midwest
Independent Transmission System Operator
|
Moody’s
|
Moody’s
Investors Service, Inc.
|
MW
|
Megawatt
|
NOx
|
Nitrogen
oxide
|
NPC
|
National
Power Cooperatives, Inc., an unaffiliated corporation
|
NRC
|
Nuclear
Regulatory Commission
|
OASIS
|
Open
Access Same-time Information System
|
OATT
|
Open
Access Transmission Tariff, filed with FERC
|
OCC
|
Corporation
Commission of the State of Oklahoma
|
Ohio
Act
|
Ohio
electric restructuring legislation
|
OPCo
|
Ohio
Power Company, a public utility subsidiary of AEP
|
OVEC
|
Ohio
Valley Electric Corporation, an electric utility company in which AEP and
CSPCo together own a 43.47% equity interest
|
PJM
|
PJM
Interconnection, L.L.C., a regional transmission
organization
|
PSO
|
Public
Service Company of Oklahoma, a public utility subsidiary of
AEP
|
PUCO
|
Public
Utilities Commission of Ohio
|
PUCT
|
Public
Utility Commission of Texas
|
RCRA
|
Resource
Conservation and Recovery Act of 1976, as amended
|
REP
|
Texas
retail electricity provider
|
Rockport
Plant
|
A
generating plant owned and partly leased by AEGCo and I&M (two 1,300
MW, coal-fired) located near Rockport, Indiana
|
RSPs
|
The
rate stabilization plans of CSPCo and OPCo, approved by the PUCO, which,
among other things, address default generation service rates from January
1, 2006 through December 31, 2008
|
RTO
|
Regional
Transmission Organization
|
SEC
|
Securities
and Exchange Commission
|
S&P
|
Standard
& Poor’s Ratings Service
|
SO2
|
Sulfur
dioxide
|
SPP
|
Southwest
Power Pool
|
SWEPCo
|
Southwestern
Electric Power Company, a public utility subsidiary of
AEP
|
TCA
|
Transmission
Coordination Agreement dated January 1, 1997 by and among, PSO, SWEPCo,
TCC, TNC and AEPSC, which allocated costs and benefits through September
2005 in connection with the operation of the transmission assets of the
four public utility subsidiaries
|
TCC
|
AEP
Texas Central Company, formerly Central Power and Light Company, a public
utility subsidiary of AEP
|
TEA
|
Transmission
Equalization Agreement dated April 1, 1984 by and among APCo, CSPCo,
I&M, KPCo and OPCo, which allocates costs and benefits in connection
with the operation of transmission assets
|
Texas
Act
|
Texas
electric restructuring legislation
|
TNC
|
AEP
Texas North Company, formerly West Texas Utilities Company, a public
utility subsidiary of AEP
|
Tractebel
|
Tractebel
Energy Marketing, Inc.
|
TVA
|
Tennessee
Valley Authority
|
VSCC
|
Virginia
State Corporation Commission
|
WPCo
|
Wheeling
Power Company, a public utility subsidiary of AEP
|
WVPSC
|
West
Virginia Public Service Commission
|
FORWARD-LOOKING
INFORMATION
This
report made by the registrants contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of
1934. Although the registrants believe that their 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 and performance of fuel suppliers and
transporters.
|
·
|
Availability
of generating capacity and the performance of our generating
plants.
|
·
|
Our
ability to recover regulatory assets and stranded costs in connection with
deregulation.
|
·
|
Our
ability to recover increases in fuel and other energy costs through
regulated or competitive electric rates.
|
·
|
Our
ability to build or acquire generating capacity (including our ability to
obtain any necessary regulatory approvals and permits) when needed at
acceptable prices and terms and to recover those costs through applicable
rate cases or competitive rates.
|
·
|
New
legislation, litigation and government regulation including requirements
for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or
particulate matter and other substances.
|
·
|
Timing
and resolution of pending and future rate cases, negotiations and other
regulatory decisions (including rate or other recovery of new investments
in generation, distribution and transmission service and environmental
compliance).
|
·
|
Resolution
of litigation (including disputes arising from the bankruptcy of Enron
Corp. and related matters).
|
·
|
Our
ability to constrain operation and maintenance costs.
|
·
|
The
economic climate and growth in our service territory and changes in market
demand and demographic patterns.
|
·
|
Inflationary
and interest rate trends.
|
·
|
Volatility
in the financial markets, particularly developments affecting the
availability of capital on reasonable terms and developments impairing our
ability to refinance existing debt at attractive rates.
|
·
|
Our
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 of the counterparties with whom we have
contractual arrangements, including participants in the energy trading
market.
|
·
|
Actions
of rating agencies, including changes in the ratings of
debt.
|
·
|
Volatility
and changes in markets for electricity, natural gas, coal, nuclear fuel
and other energy-related commodities.
|
·
|
Changes
in utility regulation, including the potential for new legislation in Ohio
and the allocation of costs within RTOs.
|
·
|
Accounting
pronouncements periodically issued by accounting standard-setting
bodies.
|
·
|
The
impact of volatility in the capital markets on the value of the
investments held by our pension, other postretirement benefit plans and
nuclear decommissioning trust.
|
·
|
Prices
for power that we generate and sell at wholesale.
|
·
|
Changes
in technology, particularly with respect to new, developing or alternative
sources of generation.
|
·
|
Other
risks and unforeseen events, including wars, the effects of terrorism
(including increased security costs), embargoes and other catastrophic
events.
|
The
registrants expressly disclaim any obligation to update any
forward-looking information.
|
PART
I
ITEM
1. BUSINESS
GENERAL
OVERVIEW
AND DESCRIPTION OF SUBSIDIARIES
AEP was
incorporated under the laws of the State of New York in 1906 and reorganized in
1925. It is a public utility holding company that owns, directly or indirectly,
all of the outstanding common stock of its public utility subsidiaries and
varying percentages of other subsidiaries.
The
service areas of AEP’s public utility subsidiaries cover portions of the states
of Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee,
Texas, Virginia and West Virginia. The generating and transmission facilities of
AEP’s public utility subsidiaries are interconnected and their operations are
coordinated. Transmission networks are interconnected with extensive
distribution facilities in the territories served. The public utility
subsidiaries of AEP have traditionally provided electric service, consisting of
generation, transmission and distribution, on an integrated basis to their
retail customers. Restructuring legislation in Michigan, Ohio, the ERCOT area of
Texas and, through 2008, Virginia has caused AEP public utility subsidiaries in
those states to unbundle previously integrated regulated rates for their retail
customers.
The AEP
System is an integrated electric utility system. As a result, the member
companies of the AEP System have contractual, financial and other business
relationships with the other member companies, such as participation in the AEP
System savings and retirement plans and tax returns, sales of electricity and
transportation and handling of fuel. The companies of the AEP System also obtain
certain accounting, administrative, information systems, engineering, financial,
legal, maintenance and other services at cost from a common provider,
AEPSC.
At
December 31, 2007, the subsidiaries of AEP had a total of 20,861 employees.
Because it is a holding company rather than an operating company, AEP has no
employees. The public utility subsidiaries of AEP are:
APCo (organized in Virginia
in 1926) is engaged in the generation, transmission and distribution of electric
power to approximately 956,000 retail customers in the southwestern portion of
Virginia and southern West Virginia, and in supplying and marketing electric
power at wholesale to other electric utility companies, municipalities and other
market participants. At December 31, 2007, APCo and its wholly owned
subsidiaries had 2,497 employees. Among the principal industries
served by APCo are coal mining, primary metals, chemicals and textile mill
products. In addition to its AEP System interconnections, APCo is interconnected
with the following unaffiliated utility companies: Carolina Power & Light
Company, Duke Carolina and Virginia Electric and Power Company. APCo has several
points of interconnection with TVA and has entered into agreements with TVA
under which APCo and TVA interchange and transfer electric power over portions
of their respective systems. APCo is a member of PJM.
CSPCo (organized in Ohio in
1937, the earliest direct predecessor company having been organized in 1883) is
engaged in the generation, transmission and distribution of electric power to
approximately 746,000 retail customers in Ohio, and in supplying and marketing
electric power at wholesale to other electric utilities, municipalities and
other market participants. At December 31, 2007, CSPCo had 1,265 employees.
CSPCo’s service area is comprised of two areas in Ohio, which include portions
of twenty-five counties. One area includes the City of Columbus and the other is
a predominantly rural area in south central Ohio. Among the principal industries
served are food processing, chemicals, primary metals, electronic machinery and
paper products. In addition to its AEP System interconnections, CSPCo is
interconnected with the following unaffiliated utility companies: Duke Ohio,
DP&L and Ohio Edison Company. CSPCo is a member of
PJM.
I&M (organized in Indiana
in 1925) is engaged in the generation, transmission and distribution of electric
power to approximately 583,000 retail customers in northern and eastern Indiana
and southwestern Michigan, and in supplying and marketing electric power at
wholesale to other electric utility companies, rural electric cooperatives,
municipalities and other market participants. At December 31, 2007,
I&M had 2,687 employees. Among the principal industries served are primary
metals, transportation equipment, electrical and electronic machinery,
fabricated metal products, rubber and miscellaneous plastic products and
chemicals and allied products. Since 1975, I&M has leased and operated the
assets of the municipal system of the City of Fort Wayne, Indiana. This lease
currently extends through February 2010. In addition to its AEP
System interconnections, I&M is interconnected with the following
unaffiliated utility companies: Central Illinois Public Service Company, Duke
Ohio, Commonwealth Edison Company, Consumers Energy Company, Illinois Power
Company, Indianapolis Power & Light Company, Louisville Gas and Electric
Company, Northern Indiana Public Service Company, Duke Indiana and Richmond
Power & Light Company. I&M is a member of PJM.
KPCo (organized in Kentucky
in 1919) is engaged in the generation, transmission and distribution of electric
power to approximately 176,000 retail customers in an area in eastern Kentucky,
and in supplying and marketing electric power at wholesale to other electric
utility companies, municipalities and other market participants. At
December 31, 2007, KPCo had 471 employees. In addition to its AEP System
interconnections, KPCo is interconnected with the following unaffiliated utility
companies: Kentucky Utilities Company and East Kentucky Power Cooperative Inc.
KPCo is also interconnected with TVA. KPCo is a member of
PJM.
Kingsport Power
Company (organized in Virginia
in 1917) provides electric service to approximately 47,000 retail customers in
Kingsport and eight neighboring communities in northeastern Tennessee. Kingsport
Power Company does not own any generating facilities and is a member of PJM. It
purchases electric power from APCo for distribution to its customers. At
December 31, 2007, Kingsport Power Company had 57 employees.
OPCo (organized in Ohio in
1907 and re-incorporated in 1924) is engaged in the generation, transmission and
distribution of electric power to approximately 712,000 retail customers in the
northwestern, east central, eastern and southern sections of Ohio, and in
supplying and marketing electric power at wholesale to other electric utility
companies, municipalities and other market participants. At December 31, 2007,
OPCo had 2,351 employees. Among the principal industries served by OPCo are
primary metals, rubber and plastic products, stone, clay, glass and concrete
products, petroleum refining and chemicals. In addition to its AEP System
interconnections, OPCo is interconnected with the following unaffiliated utility
companies: Duke Ohio, The Cleveland Electric Illuminating Company, DP&L,
Duquesne Light Company, Kentucky Utilities Company, Monongahela Power Company,
Ohio Edison Company, The Toledo Edison Company and West Penn Power
Company. OPCo is a member of PJM.
PSO (organized in Oklahoma
in 1913) is engaged in the generation, transmission and distribution of electric
power to approximately 525,000 retail customers in eastern and southwestern
Oklahoma, and in supplying and marketing electric power at wholesale to other
electric utility companies, municipalities, rural electric cooperatives and
other market participants. At December 31, 2007, PSO had 1,255 employees. Among
the principal industries served by PSO are natural gas and oil production, oil
refining, steel processing, aircraft maintenance, paper manufacturing and timber
products, glass, chemicals, cement, plastics, aerospace manufacturing,
telecommunications, and rubber goods. In addition to its AEP System
interconnections, PSO is interconnected with Ameren Corporation, Empire District
Electric Company, Oklahoma Gas and Electric Company, Southwestern Public Service
Company and Westar Energy, Inc. PSO is a member of SPP.
SWEPCo (organized in Delaware
in 1912) is engaged in the generation, transmission and distribution of electric
power to approximately 467,000 retail customers in northeastern Texas,
northwestern Louisiana and western Arkansas, and in supplying and marketing
electric power at wholesale to other electric utility companies, municipalities,
rural electric cooperatives and other market participants. At December 31, 2007,
SWEPCo had 1,578 employees. Among the principal industries served by SWEPCo are
natural gas and oil production, petroleum refining, manufacturing of pulp and
paper, chemicals, food processing, and metal refining. The territory served by
SWEPCo also includes several military installations, colleges, and universities.
SWEPCO also owns and operates a lignite coal mining operation. In
addition to its AEP System interconnections, SWEPCo is interconnected with CLECO
Corp., Empire District Electric Co., Entergy Corp. and Oklahoma Gas &
Electric Co. SWEPCo is a member of SPP.
TCC
(organized in Texas in 1945) is engaged in the transmission and
distribution of electric power to approximately 753,000 retail customers through
REPs in southern Texas. Under the Texas Act, TCC has completed the final stage
of exiting the generation business and has sold all of its generation
assets. At December 31, 2007, TCC had 1,195 employees. Among the
principal industries served by TCC are oil and gas extraction, food processing,
apparel, metal refining, chemical and petroleum refining, plastics, and
machinery equipment. In addition to its AEP System interconnections, TCC is a
member of ERCOT.
TNC (organized in Texas in
1927) is engaged in the transmission and distribution of electric power to
approximately 184,000 retail customers through REPs in west and central Texas.
TNC’s remaining generating capacity that is not deactivated has been transferred
to an affiliate at TNC’s cost pursuant to a 20-year agreement. At
December 31, 2007, TNC had 373 employees. Among the principal industries served
by TNC are agriculture and the manufacturing or processing of cotton seed
products, oil products, precision and consumer metal products, meat products and
gypsum products. The territory served by TNC also includes several military
installations and correctional facilities. In addition to its AEP System
interconnections, TNC is a member of ERCOT.
WPCo
(organized in West Virginia in 1883 and reincorporated in 1911) provides
electric service to approximately 41,000 retail customers in northern West
Virginia. WPCo does not own any generating facilities. WPCo is a
member of PJM. It purchases electric power from OPCo for distribution to its
customers. At December 31, 2007, WPCo had 61 employees.
AEGCo (organized in Ohio in
1982) is an electric generating company. AEGCo sells power at wholesale to
I&M, CSPCo and KPCo. AEGCo has no employees.
SERVICE COMPANY
SUBSIDIARY
AEP also
owns a service company subsidiary, AEPSC. AEPSC provides accounting,
administrative, information systems, engineering, financial, legal, maintenance
and other services at cost to the AEP affiliated companies. The
executive officers of AEP and certain of its public utility subsidiaries are
employees of AEPSC. At December 31, 2007, AEPSC had 6,151
employees.
CLASSES
OF SERVICE
The
principal classes of service from which the public utility subsidiaries of AEP
derive revenues and the amount of such revenues during the year ended December
31, 2007 are as follows:
Description
|
AEP
System(a)
|
APCo
|
CSPCo
|
I&M
|
|
(in
thousands)
|
UTILITY
OPERATIONS:
|
|
|
|
Retail
Sales
|
|
|
|
|
Residential
Sales
|
$
3,991,000
|
$
787,710
|
$
682,184
|
$
418,953
|
Commercial
Sales
|
2,906,000
|
387,323
|
619,396
|
328,754
|
Industrial
Sales
|
2,674,000
|
540,968
|
272,673
|
360,341
|
PJM
Net Charges
|
(131,000)
|
(43,803)
|
(24,433)
|
(24,613)
|
Provision
for Rate Refund
|
(4,000)
|
(12,996)
|
-
|
-
|
Other
Retail Sales
|
192,000
|
49,464
|
5,441
|
6,209
|
Total
Retail
|
9,628,000
|
1,708,666
|
1,555,261
|
1,089,644
|
Wholesale
|
|
|
|
|
Off-System
Sales
|
2,003,000
|
597,556
|
323,934
|
591,893
|
Transmission
|
145,000
|
(17,355)
|
(11,492)
|
5,603
|
Total
Wholesale
|
2,148,000
|
580,201
|
312,442
|
597,496
|
Other
Electric Revenues
|
216,000
|
44,581
|
25,342
|
21,058
|
Other
Operating Revenues
|
109,000
|
10,755
|
7,155
|
27,367
|
Sales
To Affiliates
|
-
|
263,066
|
143,112
|
307,627
|
Total
Utility Operating Revenues
|
12,101,000
|
2,607,269
|
2,043,312
|
2,043,192
|
OTHER
|
1,279,000
|
-
|
-
|
-
|
TOTAL
REVENUES
|
$
13,380,000
|
$
2,607,269
|
$
2,043,312
|
$
2,043,192
|
Description
|
OPCo
|
PSO
|
SWEPCo
|
|
(in
thousands)
|
UTILITY
OPERATIONS:
|
|
|
|
Retail
Sales
|
|
|
|
Residential
Sales
|
$
592,348
|
$
482,963
|
$
423,504
|
Commercial
Sales
|
385,783
|
352,155
|
367,280
|
Industrial
Sales
|
629,589
|
307,833
|
287,590
|
PJM
Net Charges
|
(28,901)
|
-
|
-
|
Provision
for Rate Refund
|
-
|
-
|
(16,877)
|
Other
Retail Sales
|
9,258
|
88,346
|
7,561
|
Total
Retail
|
1,588,077
|
1,231,297
|
1,069,058
|
Wholesale
|
|
|
|
Off-System
Sales
|
415,726
|
62,968
|
258,383
|
Transmission
|
(13,320)
|
16,641
|
37,351
|
Total
Wholesale
|
402,406
|
79,609
|
295,734
|
Other
Electric Revenues
|
29,149
|
11,013
|
63,821
|
Other
Operating Revenues
|
14,823
|
4,525
|
1,747
|
Sales
to Affiliates
|
779,757
|
69,106
|
53,102
|
Total
Utility Operating Revenues
|
2,814,212
|
1,395,550
|
1,483,462
|
OTHER
|
-
|
-
|
-
|
TOTAL
REVENUES
|
$
2,814,212
|
$
1,395,550
|
$
1,483,462
|
(a)
|
Includes
revenues of other subsidiaries not shown. Intercompany transactions have
been eliminated for the year ended December 31,
2007.
|
FINANCING
General
Companies
within the AEP System generally use short-term debt to finance working capital
needs. Short-term debt is also used to finance acquisitions,
construction and redemption or repurchase of outstanding securities until such
needs can be financed with long-term debt. In recent history, short-term funding
needs have been provided for by cash on hand and AEP’s commercial paper
program. Funds are made available to subsidiaries under the AEP
corporate borrowing program. Certain public utility subsidiaries of AEP also
sell accounts receivable to provide liquidity.
AEP’s
revolving credit agreements (which backstop the commercial paper program)
include covenants and events of default typical for this type of facility,
including a maximum debt/capital test and a $50 million cross-acceleration
provision. At December 31, 2007, AEP was in compliance with its debt covenants.
With the exception of a voluntary bankruptcy or insolvency, any event of default
has either or both a cure period or notice requirement before termination of the
agreements. A voluntary bankruptcy or insolvency would be considered an
immediate termination event. See Management’s Financial Discussion
and Analysis of Results of Operations, included in the 2007 Annual
Reports, under the heading entitled Financial Condition for
additional information with respect to AEP’s credit agreements.
AEP’s
subsidiaries have also utilized, and expect to continue to utilize, additional
financing arrangements, such as leasing arrangements, including the leasing of
coal transportation equipment and facilities.
Credit
Ratings
AEP’s
senior unsecured debt is rated Baa2 by Moody’s and BBB by S&P and
Fitch. AEP’s commercial paper is rated Prime-2 by Moody’s, A2 by
S&P and F2 by Fitch. There were no changes in the ratings or
rating outlook for AEP by Moody’s, S&P or Fitch during 2007. In
February 2008 Fitch downgraded the senior unsecured debt rating of PSO to BBB+
with stable outlook. Fitch downgraded the senior unsecured debt
rating of TCC (to BBB+) in April 2007 and placed it on negative outlook until
November 2007, when Fitch restored its stable outlook. Fitch revised
TNC’s outlook from negative to stable in April 2007. Moody’s placed
the senior unsecured debt rating of APCo, OPCo, SWEPCo and TCC on negative
outlook in January 2008. Moody’s assigns the following ratings to the
senior unsecured debt of these companies: APCo Baa2, OPCo A3, SWEPCo
Baa1 and TCC Baa2. See Management’s Financial Discussion
and Analysis of Results of Operations, included in the 2007 Annual
Reports, under the heading entitled Financial Condition for
additional information with respect to the credit ratings of the
registrants.
ENVIRONMENTAL
AND OTHER MATTERS
General
AEP’s
subsidiaries are currently subject to regulation by federal, state and local
authorities with regard to air and water-quality control and other environmental
matters, and are subject to zoning and other regulation by local authorities.
The environmental issues that are potentially material to the AEP system
include:
·
|
Global
climate change and legislative responses to it, including limitations on
CO2
emissions. See Management’s Financial
Discussion and Analysis of Results of Operations under the headings
entitled Environmental
Matters – Potential Regulation of CO2 and GHG
Emissions.
|
·
|
The
CAA and CAAA and state laws and regulations (including State
Implementation Plans) that require compliance, obtaining permits and
reporting as to air emissions. See Management’s Financial
Discussion and Analysis of Results of Operations under the headings
entitled Environmental
Matters - Clean
Air Act Requirements and Estimated Air Quality
Environmental Investments.
|
·
|
Litigation
with the federal and certain state governments and certain special
interest groups regarding regulated air emissions and/or whether emissions
from coal-fired generating plants cause or contribute to global climate
changes. See Management’s Financial
Discussion and Analysis of Results of Operations under the heading
entitled Environmental
Matters - Environmental Litigation
and Note 6 to the consolidated financial statements entitled Commitments, Guarantees and
Contingencies, included in the 2007 Annual Reports, for further
information.
|
·
|
Rules
issued by the EPA and certain states that require substantial reductions
in SO2,
mercury and NOx emissions, which have compliance dates that take effect
periodically through as late as 2018. AEP is installing (and has
installed) emission control technology and is taking other measures to
comply with required reductions. See Management’s Financial
Discussion and Analysis of Results of Operations under the headings
entitled Environmental
Matters - Clean Air Act Requirements and Estimated Air Quality
Environmental Investments included in the 2007 Annual Reports for
further information.
|
·
|
CERCLA,
which imposes costs for environmental remediation upon owners and previous
owners of sites, as well as transporters and generators of hazardous
material disposed of at such sites. See Note 6 to the
consolidated financial statements entitled Commitments, Guarantees and
Contingencies, included in the 2007 Annual Reports, under the
heading entitled The
Comprehensive Environmental Response Compensation and Liability Act
(Superfund) and State
Remediation for further information.
|
·
|
The
Federal Clean Water Act, which prohibits the discharge of pollutants into
waters of the United States except pursuant to appropriate permits. See
Management’s Financial
Discussion and Analysis of Results of Operations, included in the
2007 Annual Reports, under the heading entitled Environmental Matters -
Clean Water Act
Regulations for additional
information.
|
·
|
Solid
and hazardous waste laws and regulations, which govern the management and
disposal of certain wastes. The majority of solid waste created from the
combustion of coal and fossil fuels is fly ash and other coal combustion
byproducts, which the EPA has determined are not hazardous waste subject
to RCRA.
|
In
addition to imposing continuing compliance obligations, these laws and
regulations authorize the imposition of substantial penalties for noncompliance,
including fines, injunctive relief and other sanctions. See Management’s Financial Discussion
and Analysis of Results of Operations under the heading entitled Environmental Matters,
included in the 2007 Annual Reports, for further information
with respect to environmental issues.
While we
expect to recover our expenditures for pollution control technologies,
replacement generation and associated operating costs from customers through
regulated rates (in regulated jurisdictions) or market prices (in Ohio and
Texas), without such recovery those costs could adversely affect future results
of operations and cash flows, and possibly financial condition. The
cost of complying with applicable environmental laws, regulations and rules is
expected to be material to the AEP System. In October 2007, we
settled the New Source Review litigation with the EPA, the United States
Department of Justice, various states and special interest
groups. The litigation challenged whether modifications to or
maintenance of certain coal-fired generating plants required additional
permitting or pollution control technology. In settling, we agreed to
invest in additional environmental controls for our plants before
2019. We also paid a $15 million civil penalty and will provide $36
million for environmental projects coordinated with the federal government and
$24 million to the states for environmental mitigation. See Management’s Financial Discussion
and Analysis of Results of Operations under the heading entitled Environmental Matters and
Note 6 to the consolidated financial statements entitled Commitments, Guarantees and
Contingencies, included in the 2007 Annual Reports, for more information
regarding the settled litigation and other environmental
matters.
Environmental
Investments
Investments
related to improving AEP System plants’ environmental performance and compliance
with air and water quality standards during 2005, 2006 and 2007 and the current
estimates for 2008, 2009 and 2010 are shown below, in each case excluding AFUDC
or capitalized interest. AEP expects to make substantial investments in addition
to the amounts set forth below in future years in connection with the
modification and addition of facilities at generating plants for environmental
quality controls. Such future investments are needed in order to
comply with air and water quality standards which have been adopted and have
deadlines for compliance after 2010 or have been proposed and may be
adopted. Future investments could be significantly greater if
emissions reduction requirements are accelerated or otherwise become more
onerous or if CO2 becomes
regulated. See Management’s
Financial Discussion and Analysis of Results of Operations under the
heading entitled Environmental
Matters and Note 6 to the
consolidated financial statements, entitled Commitments, Guarantees and
Contingencies, included in the 2007 Annual Reports, for more information
regarding environmental expenditures in general.
Historical
and Projected Environmental Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
|
Actual
|
|
|
Actual
|
|
|
Actual
|
|
|
Estimate
|
|
|
Estimate
|
|
|
Estimate
|
|
(in thousands)
|
|
Total
AEP System*
|
|
$ |
811,400 |
|
|
$ |
1,366,200 |
|
|
$ |
994,100 |
|
|
$ |
875,300 |
|
|
$ |
606,400 |
|
|
$ |
394,200 |
|
APCo
|
|
|
231,200 |
|
|
|
532,800 |
|
|
|
351,900 |
|
|
|
315,900 |
|
|
|
255,900 |
|
|
|
177,100 |
|
CSPCo
|
|
|
32,200 |
|
|
|
138,900 |
|
|
|
130,000 |
|
|
|
139,900 |
|
|
|
66,800 |
|
|
|
23,700 |
|
I&M
|
|
|
62,900 |
|
|
|
23,200 |
|
|
|
9,300 |
|
|
|
51,500 |
|
|
|
20,500 |
|
|
|
3,100 |
|
OPCo
|
|
|
458,600 |
|
|
|
660,800 |
|
|
|
481,700 |
|
|
|
291,700 |
|
|
|
179,200 |
|
|
|
43,100 |
|
PSO
|
|
|
200 |
|
|
|
500 |
|
|
|
1,500 |
|
|
|
25,800 |
|
|
|
22,100 |
|
|
|
47,000 |
|
SWEPCo
|
|
|
11,900 |
|
|
|
21,000 |
|
|
|
14,300 |
|
|
|
33,000 |
|
|
|
32,700 |
|
|
|
66,800 |
|
*
|
Includes
expenditures of both the subsidiaries shown below and other subsidiaries
not shown. The figures reflect
construction
expenditures, not investments in subsidiary companies. Excludes
discontinued operations.
|
Electric
and Magnetic Fields
EMF are
found everywhere there is electricity. Electric fields are created by the
presence of electric charges. Magnetic fields are produced by the flow of those
charges. This means that EMF are created by electricity flowing in transmission
and distribution lines, electrical equipment, household wiring, and
appliances. A number of studies in the past several years have
examined the possibility of adverse health effects from EMF. While some of the
epidemiological studies have indicated some association between exposure to EMF
and health effects, none has produced any conclusive evidence that EMF does or
does not cause adverse health effects.
Management cannot predict the ultimate
impact of the question of EMF exposure and adverse health effects. If further
research shows that EMF exposure contributes to increased risk of cancer or
other health problems, or if the courts conclude that EMF exposure harms
individuals and that utilities are liable for damages, or if states limit the
strength of magnetic fields to such a level that the current electricity
delivery system must be significantly changed, then the results of operations
and financial condition of AEP and its operating subsidiaries could be
materially adversely affected unless these costs can be recovered from
customers.
UTILITY
OPERATIONS
GENERAL
Utility
operations constitute most of AEP’s business operations. Utility
operations include (i) the generation, transmission and distribution of electric
power to retail customers and (ii) the supplying and marketing of electric power
at wholesale (through the electric generation function) to other electric
utility companies, municipalities and other market
participants. AEPSC, as agent for AEP’s public utility subsidiaries,
performs marketing, generation dispatch, fuel procurement and power-related risk
management and trading activities.
ELECTRIC
GENERATION
Facilities
AEP’s
public utility subsidiaries own or lease approximately 37,000 MW of domestic
generation. See Item 2 —
Properties for more information regarding AEP’s generation
capacity.
AEP
Power Pool and CSW Operating Agreement
APCo,
CSPCo, I&M, KPCo and OPCo are parties to the Interconnection Agreement
defining how they share the costs and benefits associated with their generating
plants. This sharing is based upon each company’s “member-load-ratio.” The
Interconnection Agreement has been approved by the FERC. The
member-load-ratio is calculated monthly by dividing such company’s highest
monthly peak demand for the last twelve months by the aggregate of the highest
monthly peak demand for the last twelve months for all AEP East companies. As of
December 31, 2007, the member-load-ratios were as follows:
|
Peak
Demand
(MW)
|
Member-Load
Ratio
(%)
|
APCo
|
8,132
|
33.1
|
CSPCo
|
4,713
|
19.2
|
I&M
|
4,528
|
18.5
|
KPCo
|
1,665
|
6.8
|
OPCo
|
5,491
|
22.4
|
Ohio’s
electric restructuring law, the Ohio Act, was enacted in 2001. To
comply with that law CSPCo and OPCo functionally separated their generation
business from their remaining operations. They plan to remain
functionally separated through at least December 31, 2008 as authorized by their
rate stabilization plans approved by the PUCO. As permitted by the Ohio Act,
CSPCo and OPCo can implement market-based rates effective January 2009,
following the expiration of their RSPs on December 31, 2008. CSPCo
and OPCo have been involved in discussions with various stakeholders in Ohio
about proposed legislation to address the period following the expiration of the
rate stabilization plans. See Note 4 to the consolidated financial
statements, entitled Rate
Matters, included in the 2007 Annual Reports, for more
information.
Since
1995, APCo, CSPCo, I&M, KPCo and OPCo have been parties to the AEP System
Interim Allowance Agreement (Allowance Agreement), which provides, among other
things, for the transfer of emission allowances associated with transactions
under the Interconnection Agreement. The following table shows the
net (credits) or charges allocated among the parties under the Interconnection
Agreement during the years ended December 31, 2005, 2006 and 2007:
|
2005
|
2006
|
2007
|
|
(in
thousands)
|
APCo
|
$288,000
|
$319,500
|
$454,800
|
CSPCo
|
285,600
|
281,700
|
173,000
|
I&M
|
(197,400)
|
(146,100)
|
(93,200)
|
KPCo
|
42,200
|
38,800
|
41,200
|
OPCo
|
(418,400)
|
(493,900)
|
(575,800)
|
PSO,
SWEPCo and AEPSC are parties to a Restated and Amended Operating Agreement
originally dated as of January 1, 1997 (CSW Operating Agreement), which has been
approved by the FERC. The CSW Operating Agreement requires these public utility
subsidiaries to maintain adequate annual planning reserve margins and requires
the subsidiaries that have capacity in excess of the required margins to make
such capacity available for sale to other public utility subsidiary parties as
capacity commitments. Parties are compensated for energy delivered to the
recipients based upon the deliverer’s incremental cost plus a portion of the
recipient’s savings realized by the purchaser that avoids the use of more costly
alternatives. Revenues and costs arising from third party sales in
their region are generally shared based on the amount of energy each west zone
public utility subsidiary contributes that is sold to third
parties. The separation of the generation business undertaken by TCC
and TNC to comply with the Texas Act has made their business operations
incompatible with the CSW Operating Agreement. As a result, with FERC
approval, these companies are no longer parties to, and no longer supply
generating capacity under, the CSW Operating Agreement.
The
following table shows the net (credits) or charges allocated among the parties
under the CSW Operating Agreement during the years ended December 31, 2005, 2006
and 2007:
|
2005
|
2006
|
2007
|
|
(in
thousands)
|
PSO
|
$27,600
|
$(15,300)
|
$(17,500)
|
SWEPCo
|
(27,500)
|
9,900
|
16,800
|
TCC
|
0
|
0
|
0
|
TNC
|
(100)
|
5,400
|
700
|
Power
generated by or allocated or provided under the Interconnection Agreement or CSW
Operating Agreement to any public utility subsidiary is primarily sold to
customers by such public utility subsidiary at rates approved by the public
utility commission in the jurisdiction of sale. In Ohio and Virginia, such rates
are based on a statutory formula as Ohio considers continuing to transition to
the use of market rates for generation and as Virginia completes it final year
of transition before returning to a form of cost-based regulation. See Regulation — Rates under
Item 1, Utility
Operations.
Under
both the Interconnection Agreement and CSW Operating Agreement, power that is
not needed to serve the native load of our public utility subsidiaries is sold
in the wholesale market by AEPSC on behalf of those subsidiaries. See
Risk Management and
Trading, below,
for a discussion of the trading and marketing of such power.
AEP’s
System Integration Agreement, which has been approved by the FERC, provides for
the integration and coordination of AEP’s East companies, PSO and SWEPCO. This
includes joint dispatch of generation within the AEP System and the
distribution, between the two zones, of costs and benefits associated with the
transfers of power between the two zones (including sales to third parties and
risk management and trading activities). It is designed to function as an
umbrella agreement in addition to the Interconnection Agreement and the CSW
Operating Agreement, each of which controls the distribution of costs and
benefits for activities within each zone. Because TCC and TNC have
exited the generation business, these two companies are no longer parties to the
System Integration Agreement.
Risk
Management and Trading
As agent
for AEP’s public utility subsidiaries, AEPSC sells excess power into the market
and engages in power, natural gas, coal and emissions allowances risk management
and trading activities focused in regions in which AEP traditionally operates.
These activities primarily involve the purchase and sale of electricity (and to
a lesser extent, natural gas, coal and emissions allowances) under physical
forward contracts at fixed and variable prices. These contracts include physical
transactions, over-the-counter swaps and exchange-traded futures and options.
The majority of physical forward contracts are typically settled by entering
into offsetting contracts. These transactions are
executed with numerous counterparties or on exchanges. Counterparties and
exchanges may require cash or cash related instruments to be deposited on these
transactions as margin against open positions. As of December 31, 2007,
counterparties and exchanges have posted approximately $43 million in cash, cash
equivalents or letters of credit with AEPSC for the benefit of AEP’s public
utility subsidiaries (while, as of that date, AEP’s public utility subsidiaries
had posted approximately $77 million with counterparties and
exchanges). Since open trading contracts are valued based on market
power prices, exposures change daily.
Fuel
Supply
The
following table shows the sources of fuel used by the AEP System:
|
2005
|
2006
|
2007
|
Coal
and Lignite
|
83%
|
85%
|
85%
|
Natural
Gas
|
6%
|
6%
|
6%
|
Nuclear
|
10%
|
9%
|
9%
|
Hydroelectric
and other
|
1%
|
<1%
|
<1%
|
Variations
in the generation of nuclear power are primarily related to refueling and
maintenance outages. Price increases in one or more fuel sources
relative to other fuels generally result in increased use of other
fuels.
Coal and
Lignite: AEP’s
public utility subsidiaries procure coal and lignite under a combination of
purchasing arrangements including long-term contracts, affiliate operations and
spot agreements with various producers and coal trading firms. The
price for most solid fuels generally has been increasing. Management has
responded to increases in the price of coal by rebalancing the coal used in its
generating facilities with coal from different coal regions and sources
that have different heat and sulfur contents. This rebalancing is an
ongoing process that is expected to continue, significantly enabled by the
installation of scrubbers at a number of our generating facilities. Management
believes that AEP’s public utility subsidiaries will be able to secure and
transport coal and lignite of adequate quality and in adequate quantities to
operate their coal and lignite-fired units. Through subsidiaries, AEP
owns, leases or controls more than 8,400 railcars, 692 barges, 16 towboats and a
coal handling terminal with 20 million tons of annual capacity to move and store
coal for use in its generating facilities. See MEMCO Operations for a
discussion of AEP’s for-profit coal and other dry-bulk commodity transportation
operations that are not part of AEP’s Utility Operations segment.
The
following table shows the amount of coal and lignite delivered to the AEP System
plants during the past three years and the average delivered price of coal
purchased by System companies:
|
2005
|
2006
|
2007
|
Total
coal delivered to AEP System plants (thousands of tons)
|
72,321
|
76,045
|
72,644
|
Average
price per ton of purchased coal
|
$32.84
|
$35.27
|
$36.65
|
The coal
supplies at AEP System plants vary from time to time depending on various
factors, including, but not limited to, demand for electric power, unit outages,
transportation infrastructure limitations, space limitations, plant coal
consumption rates, labor issues and weather conditions which may interrupt
production or deliveries. At December 31, 2007, the System’s coal inventory was
approximately 29 - 33 days of normal usage. This estimate assumes
that the total supply would be utilized through the operation of plants that use
coal most efficiently.
In cases
of emergency or shortage, System companies have developed programs to conserve
coal supplies at their plants. Such programs have been filed and reviewed with
officials of federal and state agencies and, in some cases, the relevant state
regulatory agency has prescribed actions to be taken under specified
circumstances by System companies, subject to the jurisdiction of such
agency.
The FERC
has adopted regulations relating, among other things, to the circumstances under
which, in the event of fuel emergencies or shortages, it might order electric
utilities to generate and transmit electric power to other regions or systems
experiencing fuel shortages, and to ratemaking principles by which such electric
utilities would be compensated. In addition, the federal government is
authorized, under prescribed conditions, to reallocate coal and to require the
transportation thereof, for the use at power plants or major fuel-burning
installations experiencing fuel shortages.
Natural
Gas: Through its
public utility subsidiaries, AEP consumed over 108 billion cubic feet of natural
gas during 2007 for generating power. A portfolio of long-term, monthly,
seasonal firm and daily peaking purchase and transportation agreements (that are
entered into on a competitive basis and based on market prices) supplies natural
gas requirements for each plant.
Nuclear: I&M has made
commitments to meet the current nuclear fuel requirements of the Cook Plant.
I&M has made and will make purchases of uranium in various forms in the
spot, short-term, and mid-term markets. I&M also leases nuclear
fuel.
For
purposes of the storage of high-level radioactive waste in the form of spent
nuclear fuel, I&M completed modifications to its spent nuclear fuel storage
pool more than 10 years ago. I&M anticipates that the Cook Plant has
sufficient storage capacity for its spent nuclear fuel to permit normal
operations through 2013. I&M has entered into an agreement to
provide for onsite dry cask storage.
Nuclear
Waste and Decommissioning
As the
owner of the Cook Plant, I&M has a significant future financial commitment
to dispose of spent nuclear fuel and decommission and decontaminate the plant
safely. The cost to decommission a nuclear plant is affected by NRC regulations
and the spent nuclear fuel disposal program. In 2006, when the most
recent study was done, the estimated cost of decommissioning and disposal of
low-level radioactive waste for the Cook Plant ranged from $733 million to $1.3
billion in 2006 non-discounted dollars. At December 31, 2007, the
total decommissioning trust fund balance for the Cook Plant was $1.057
billion. The ultimate cost of retiring the Cook Plant may be
materially different from estimates and funding targets as a result of
the:
·
|
Type
of decommissioning plan selected;
|
·
|
Escalation
of various cost elements (including, but not limited to, general inflation
and the cost of energy);
|
·
|
Further
development of regulatory requirements governing
decommissioning;
|
·
|
Technology
available at the time of decommissioning differing significantly from that
assumed in studies;
|
·
|
Availability
of nuclear waste disposal facilities;
and
|
·
|
Availability
of a DOE facility for permanent storage of spent nuclear
fuel.
|
Accordingly,
management is unable to provide assurance that the ultimate cost of
decommissioning the Cook Plant will not be significantly different than current
projections. We will seek recovery from customers through our
regulated rates if actual decommissioning costs exceed our
projections. See Note 10 to the consolidated financial statements,
entitled Nuclear,
included in the 2007 Annual Reports, for information with respect to nuclear
waste and decommissioning.
Low-Level
Radioactive Waste:
The LLWPA mandates that the responsibility for the disposal of low-level
radioactive waste rests with the individual states. Low-level radioactive waste
consists largely of ordinary refuse and other items that have come in contact
with radioactive materials. Michigan does not currently have a disposal site for
such waste available. I&M cannot predict when such a site may be available,
but South Carolina and Utah license low-level radioactive waste disposal sites
which currently accept low-level radioactive waste from
Michigan. I&M’s access to the Barnwell, South Carolina facility
is currently allowed through the end of fiscal year 2008. With some
modifications to existing facilities, I&M will have capacity for onsite
storage of that waste currently shipped to Barnwell, South Carolina for the
duration of its licensed operation of Cook Plant. There is currently
no set date limiting I&M’s access to the Utah facility; however this
facility does not accept all classifications of low level waste.
Structured
Arrangements Involving Capacity, Energy, and Ancillary Services
In
January 2000, OPCo and NPC, an affiliate of Buckeye, entered into an agreement
relating to the construction and operation of a 510 MW gas-fired electric
generating peaking facility to be owned by NPC and called the Mone
Plant. OPCo is entitled to 100% of the power generated by the Mone
Plant, and is responsible for the fuel and other costs of the facility through
May 2012, as extended. Following that, NPC and OPCo will be entitled to 80% and
20%, respectively, of the power of the Mone Plant, and both parties will
generally be responsible for their allocable portion of the fuel and other costs
of the facility.
Certain
Power Agreements
I&M: The Unit Power Agreement
between AEGCo and I&M, dated March 31, 1982, provides for the sale by AEGCo
to I&M of all the capacity (and the energy associated therewith) available
to AEGCo at the Rockport Plant. Whether or not power is available from AEGCo,
I&M is obligated to pay a demand charge for the right to receive such power
(and an energy charge for any associated energy taken by
I&M). The agreement will continue in effect until the last of the
lease terms of Unit 2 of the Rockport Plant has expired (currently December
2022) unless extended in specified circumstances.
Pursuant
to an assignment between I&M and KPCo, and a unit power agreement between
KPCo and AEGCo, AEGCo sells KPCo 30% of the capacity (and the energy associated
therewith) available to AEGCo from both units of the Rockport Plant. KPCo has
agreed to pay to AEGCo the amounts that I&M would have paid AEGCo under the
terms of the Unit Power Agreement between AEGCo and I&M for such
entitlement. The KPCo unit power agreement expires in December
2022.
CSPCo: The Unit Power Agreement
between AEGCo and CSPCo, dated March 15, 2007, provides for the sale by AEGCo to
CSPCo of all the capacity and associated unit contingent energy and ancillary
services available to AEGCo at the Lawrenceburg Plant that are scheduled and
dispatched by CSPCo. CSPCo is obligated to pay a capacity charge
(whether or not power is available from the Lawrenceburg Plant), the fuel,
operating and maintenance charges associated with the energy dispatched by
CSPCo, and to reimburse AEGCo for other costs associated with the operation and
ownership of the Lawrenceburg Plant. The agreement will continue in
effect until December 31, 2017 unless extended as set forth in the
agreement.
OVEC: AEP and several
unaffiliated utility companies jointly own OVEC. The aggregate equity
participation of AEP in OVEC is 43.47%. Until September 1, 2001, OVEC
supplied from its generating capacity the power requirements of a uranium
enrichment plant near Portsmouth, Ohio owned by the DOE. The
sponsoring companies are now entitled to receive and obligated to pay for all
OVEC capacity (approximately 2,200 MW) in proportion to their respective power
participation ratios. The aggregate power participation ratio of
APCo, CSPCo, I&M and OPCo is 43.47%. The proceeds from the sale of power by
OVEC are designed to be sufficient for OVEC to meet its operating expenses and
fixed costs and to provide a return on its equity capital. The
Amended and Restated Inter-Company Power Agreement, which defines the rights of
the owners and sets the power participation ratio of each, will expire by its
terms on March 12, 2026. AEP and the other owners have been
evaluating the need for environmental investments related to their ownership
interests, which are material. In December 2006, OVEC’s Board of
Directors authorized interim capital expenditures totaling $366 million in order
to complete detailed engineering and began construction of flue gas
desulfurization (sulfur dioxide scrubber) projects and the associated scrubber
waste disposal landfills. In November 2007, OVEC’s Board of Directors
authorized additional interim capital expenditures of up to $82.8 million for
completion of the associated scrubber waste disposal landfills. If
approved, the estimated total cost to complete the scrubber and landfill
projects would be in excess of $1 billion, which OVEC would expect to finance
through issuing debt.
ELECTRIC
TRANSMISSION AND DISTRIBUTION
General
AEP’s
public utility subsidiaries (other than AEGCo) own and operate transmission and
distribution lines and other facilities to deliver electric power. See Item 2—Properties for more
information regarding the transmission and distribution lines. Most of the
transmission and distribution services are sold, in combination with electric
power, to retail customers of AEP’s public utility subsidiaries in their service
territories. These sales are made at rates established and approved by the state
utility commissions of the states in which they operate, and in some instances,
approved by the FERC. See Regulation—Rates. The FERC
regulates and approves the rates for wholesale transmission transactions. See
Item 1 –Utility Operations -
Regulation—FERC. As discussed below, some transmission services also are
separately sold to non-affiliated companies.
AEP’s
public utility subsidiaries (other than AEGCo) hold franchises or other rights
to provide electric service in various municipalities and regions in their
service areas. In some cases, these franchises provide the utility with the
exclusive right to provide electric service. These franchises have varying
provisions and expiration dates. In general, the operating companies consider
their franchises to be adequate for the conduct of their business. For a
discussion of competition in the sale of power, see Item 1 –Utility Operations -
Competition.
AEP
Transmission Pool
Transmission
Equalization Agreement: APCo, CSPCo, I&M,
KPCo and OPCo operate their transmission lines as a single interconnected and
coordinated system and are parties to the TEA, defining how they share the costs
and benefits associated with their relative ownership of the extra-high-voltage
transmission system (facilities rated 345kV and above) and certain facilities
operated at lower voltages (138kV up to 345kV). The TEA has been approved by the
FERC. Sharing under the TEA is based upon each company’s “member-load-ratio.”
The member-load-ratio is calculated monthly by dividing such company’s highest
monthly peak demand for the last twelve months by the aggregate of the highest
monthly peak demand for the last twelve months for all east zone operating
companies. The respective peak demands and member-load-ratios as of
December 31, 2007 are set forth above in the section titled ELECTRIC GENERATION – AEP
Power Pool and CSW Operating Agreement.
The
following table shows the net (credits) or charges allocated among the parties
to the TEA during the years ended December 31, 2005, 2006 and 2007:
|
2005
|
2006
|
2007
|
|
(in
thousands)
|
APCo
|
$8,900
|
$(16,000)
|
$(25,000)
|
CSPCo
|
34,600
|
46,000
|
51,900
|
I&M
|
(47,000)
|
(37,000)
|
(34,600)
|
KPCo
|
(3,500)
|
(2,000)
|
(800)
|
OPCo
|
7,000
|
9,000
|
8,500
|
Transmission
Coordination Agreement: PSO, SWEPCo, TCC, TNC
and AEPSC are parties to the TCA, which has been approved by the
FERC. Under the TCA, a coordinating committee is charged with the
responsibility of (i) overseeing the coordinated planning of the transmission
facilities of the AEP West companies, including the performance of transmission
planning studies, (ii) the interaction of such subsidiaries with independent
system operators and other regional bodies interested in transmission planning
and (iii) compliance with the terms of the OATT filed with the FERC and the
rules of the FERC relating to such tariff. Pursuant to the TCA, the
AEP West companies have delegated to AEPSC responsibility for monitoring the
reliability of their transmission systems and administering the AEP OATT on
their behalf. Prior to September 2005, the TCA also provided for the allocation
among the AEP West companies of revenues collected for transmission and
ancillary services provided under the AEP OATT. Since then, these
allocations have been determined by the FERC-approved OATT for the SPP (with
respect to PSO and SWEPCo) and PUCT-approved protocols for ERCOT (with respect
to TCC and TNC).
The
following table shows the net (credits) or charges allocated among the parties
to the TCA prior to September 2005, and pursuant to the SPP OATT and ERCOT
protocols as described above during the years ended December 31, 2005, 2006 and
2007:
|
2005
|
2006
|
2007
|
|
(in
thousands)
|
PSO
|
$3,500
|
$1,800
|
500
|
SWEPCo
|
5,200
|
(1,900)
|
(500)
|
TCC
|
(3,800)
|
1,100
|
1,100
|
TNC
|
(4,900)
|
(1,000)
|
(1,100)
|
Transmission
Services for Non-Affiliates: In addition to
providing transmission services in connection with their own power sales, AEP’s
public utility subsidiaries through RTOs also provide transmission services for
non-affiliated companies. See Item 1 –Utility Operations -
Regional Transmission Organizations, below. Transmission of electric
power by AEP’s public utility subsidiaries is regulated by the
FERC.
Coordination of
East and West Zone Transmission: AEP’s System
Transmission Integration Agreement provides for the integration and coordination
of the planning, operation and maintenance of the transmission facilities of AEP
East and AEP West companies. The System Transmission Integration Agreement
functions as an umbrella agreement in addition to the TEA and the TCA. The
System Transmission Integration Agreement contains two service schedules that
govern:
·
|
The
allocation of transmission costs and revenues
and
|
·
|
The
allocation of third-party transmission costs and revenues and System
dispatch costs.
|
The
System Transmission Integration Agreement contemplates that additional service
schedules may be added as circumstances warrant.
Regional
Transmission Organizations
The AEP
East Companies are members of PJM (a FERC-approved RTO). SWEPCo and
PSO are members of the SPP (another FERC-approved RTO). RTOs operate,
plan and control utility transmission assets in a manner designed to provide
open access to such assets in a way that prevents discrimination between
participants owning transmission assets and those that do not. The remaining AEP
West companies (TCC and TNC) are members of ERCOT. See Note 4 to the
consolidated financial statements, entitled Rate Matters, included in the
2007 Annual Reports under the heading entitled RTO Formation/Integration Costs
and Transmission Rate
Proceedings at the FERC for a discussion of public utility subsidiary
participation in RTOs.
REGULATION
General
Except
for transmission and/or retail generation sales in certain of its jurisdictions,
AEP’s public utility subsidiaries’ retail rates and certain other matters are
subject to traditional regulation by the state utility
commissions. See Item 1 – Utility Operations -
Electric Restructuring and Customer Choice Legislation and Rates, below. AEP’s
subsidiaries are also subject to regulation by the FERC under the
FPA. I&M is subject to regulation by the NRC under the Atomic
Energy Act of 1954, as amended, with respect to the operation of the Cook
Plant. AEP and its public utility subsidiaries are also subject to
the regulatory provisions of EPACT, much of which is administered by the
FERC. EPACT contains key provisions affecting the electric power
industry such as giving the FERC “backstop” transmission siting authority as
well as increased utility merger oversight. The law also provides
incentives and funding for clean coal technologies and initiatives to
voluntarily reduce greenhouse gases.
Rates
Historically,
state utility commissions have established electric service rates on a
cost-of-service basis, which is designed to allow a utility an opportunity to
recover its cost of providing service and to earn a reasonable return on its
investment used in providing that service. A utility’s cost of service generally
reflects its operating expenses, including operation and maintenance expense,
depreciation expense and taxes. State utility commissions periodically adjust
rates pursuant to a review of (i) a utility’s revenues and expenses during a
defined test period and (ii) such utility’s level of investment. Absent a legal
limitation, such as a law limiting the frequency of rate changes or capping
rates for a period of time, a state utility commission can review and change
rates on its own initiative. Some states may initiate reviews at the request of
a utility, customer, governmental or other representative of a group of
customers. Such parties may, however, agree with one another not to request
reviews of or changes to rates for a specified period of time.
In many
jurisdictions, the rates of AEP’s public utility subsidiaries are generally
based on the cost of providing traditional bundled electric service (i.e.,
generation, transmission and distribution service). In the ERCOT area of Texas,
our utilities have exited the generation business and they currently charge
unbundled cost-based rates for transmission and distribution
service. In Ohio, rates for electric service are unbundled for
generation, transmission and distribution service. Historically, the
state regulatory frameworks in the service area of the AEP System reflected
specified fuel costs as part of bundled (or, more recently, unbundled) rates or
incorporated fuel adjustment clauses in a utility’s rates and tariffs. Fuel
adjustment clauses permit periodic adjustments to fuel cost recovery from
customers and therefore provide protection against exposure to fuel cost
changes. While the historical framework remains in a portion of AEP’s service
territory, recovery of increased fuel costs through a fuel adjustment clause is
no longer provided for in Ohio.
The
following state-by-state analysis summarizes the regulatory environment of
certain major jurisdictions in which AEP operates. Several public utility
subsidiaries operate in more than one jurisdiction.
Indiana: I&M
provides retail electric service in Indiana at bundled rates approved by the
IURC, with rates set on a cost-of-service basis. In January 2008,
I&M filed for an increase in its Indiana base rates of $82 million based on
a return on equity of 11.5% and a September 30, 2007 test year. The
base rate increase includes a $69 million reduction in depreciation. The filing
requests trackers for certain variable components of the cost of service
including additional PJM costs, reliability enhancement costs, demand side
management/energy efficiency costs, off-system sales margins and net
environmental compliance costs. The trackers would increase annual
revenues by $46 million. I&M proposes to share 50% of an
estimated $96 million of off-system sales margins with ratepayers with a
guaranteed minimum of $20 million. A decision is expected from the
IURC in early 2009.
Ohio: CSPCo and OPCo each
operated as a functionally separated utility and provided “default” retail
electric service to customers at unbundled rates pursuant to the Ohio Act
through December 31, 2007. The PUCO approved the rate stabilization plans filed
by CSPCo and OPCo (which, among other things, address default retail generation
service rates from January 1, 2006 through December 31, 2008). Retail
generation rates are determined consistent with the rate stabilization plan
until December 31, 2008. CSPCo and OPCo are providing and will continue to
provide distribution services to retail customers at rates approved by the PUCO.
These rates are frozen from their levels as of December 31, 2005 through
December 31, 2008. Transmission services will continue to be provided at rates
based on rates established by the FERC. CSPCo and OPCo have been involved in
discussions with various stakeholders in Ohio about pending legislation to
address the period following the expiration of the rate stabilization
plans. See Note 4 to the consolidated financial statements, entitled
Rate Matters, included
in the 2007 Annual Reports, for more information.
Oklahoma: PSO provides retail
electric service in Oklahoma at bundled rates approved by the
OCC. PSO’s rates are set on a cost-of-service basis. Fuel and
purchased energy costs above the amount included in base rates are recovered by
applying a fuel adjustment factor to retail kilowatt-hour sales. The factor is
generally adjusted annually and is based upon forecasted fuel and purchased
energy costs. Over or under collections of fuel costs for prior periods are
returned to or recovered from customers in the year following when new annual
factors are established. In November 2006, PSO filed a request with
the OCC seeking an increase in base rates and other rate relief and the OCC
issued a final order in October 2007. See Note 4 to the consolidated
financial statements, entitled Rate Matters, included in the
2007 Annual Reports, for additional information.
Texas: TCC has sold all of its
generation assets. TNC has one active generation unit, however, all
of the output from that unit is sold to a non-utility affiliate pursuant to a
20-year agreement. Most retail customers in TCC’s and TNC’s ERCOT
service area of Texas are served through non-affiliated Retail Electric
Providers (“REPs”). TCC and TNC provide retail transmission and
distribution service on a cost-of-service basis at rates approved by the PUCT
and wholesale transmission service under tariffs approved by the FERC consistent
with PUCT rules. In November 2006, TCC and TNC filed requests with
the PUCT seeking increases in the rates charged to REPs for delivering
electricity over their transmission and distribution lines. The PUCT
granted increases during 2007. See Note 4 to the consolidated
financial statements, entitled Rate Matters included in the
2007 Annual Reports, for additional information. In August 2006, the
PUCT delayed competition in the SPP area of Texas until at least January 1,
2011. As such, the PUCT continues to approve base and fuel rates for SWEPCo’s
Texas operations.
Virginia: APCo currently provides
retail electric service in Virginia at unbundled rates. In April
2007, the Virginia legislature adopted a comprehensive law providing for the
re-regulation of electric utilities’ generation and supply rates after the
December 31, 2008 expiration of capped rates. The law
provides for, among other things, biennial rate reviews beginning in 2009; rate
adjustment clauses for the recovery of a variety of costs and a minimum allowed
return on equity which will be based on the average earned return on equity of
regional vertically integrated electric utilities. The law also
provides that utilities may retain a minimum of 25% of the margins from
off-system sales with the remaining margins from such sales credited against
fuel factor expenses with a true-up to actual.
In May 2007, the VSCC approved an
overall annual increase in base rates. In December 2007, the VSCC
approved recovery of certain recurring environmental and reliability costs (the
first of several anticipated requests for costs expected to be
incurred). In February 2008, the VSCC approved an adjustment in
APCO’s fuel factor and the submission of PJM-related costs in fuel factor review
and recovery, and authorized APCo to retain a share of margins from its
off-system sales. For a more complete discussion of these matters, see Note 4 to
the consolidated financial statements, entitled Rate Matters, included in the
2007 Annual Reports.
West
Virginia: APCo
and WPCo provide retail electric service at bundled rates approved by the WVPSC.
West Virginia generally allows for timely recovery of fuel costs. In
June 2007, the WVPSC approved a settlement agreement that provided for recovery
of additional costs effective July 1, 2007. See Note 4 to the
consolidated financial statements, entitled Rate Matters, included in the
2007 Annual Reports, for additional information on current rate
proceedings.
Other
Jurisdictions:
The public utility subsidiaries of AEP also provide service at regulated
bundled rates in Arkansas, Kentucky, Louisiana and Tennessee and regulated
unbundled rates in Michigan.
The
following table illustrates the current rate regulation status of the states in
which the public utility subsidiaries of AEP operate:
|
|
|
|
|
|
Fuel Clause Rates (4)
|
|
|
|
|
|
|
|
|
|
|
Off-System
Sales Profits
|
|
Percentage
of AEP System
|
|
|
Status
of Base Rates for
|
|
|
|
Shared
with
|
Retail
|
Jurisdiction
|
|
Power
Supply
|
|
Energy
Delivery
|
|
Status
|
|
Ratepayers
|
|
Revenues
(1)
|
|
|
|
|
|
|
|
|
|
|
|
Ohio
|
|
See
footnote 2
|
|
Distribution
frozen through 2008 (2)
|
|
None
|
|
Not
applicable
|
|
33%
|
Oklahoma
|
|
Not
capped or frozen
|
|
Not
capped or frozen
|
|
Active
|
|
Yes
|
|
13%
|
Texas
ERCOT
|
|
Not
applicable (3)
|
|
Not
capped or frozen
|
|
Not
applicable
|
|
Not
applicable
|
|
8%
|
Texas
SPP
|
|
Not
capped or frozen (3)
|
|
Not
capped or frozen
|
|
Active
|
|
Yes
|
|
5%
|
Indiana
|
|
Not
capped or frozen
|
|
Not
capped or frozen
|
|
Active
|
|
No
|
|
9%
|
Virginia
|
|
Capped
until 12/31/08
|
|
Capped
until 12/31/08
|
|
Active
|
|
Yes
|
|
9%
|
West
Virginia
|
|
Not
capped or frozen
|
|
Not
capped or frozen
|
|
Active
|
|
Yes
|
|
10%
|
Louisiana
|
|
Not
capped or frozen
|
|
Not
capped or frozen
|
|
Active
|
|
Yes,
above base levels
|
|
4%
|
Kentucky
|
|
Not
capped or frozen
|
|
Not
capped or frozen
|
|
Active
|
|
Yes,
above and below base levels
|
|
4%
|
Arkansas
|
|
Not
capped or frozen
|
|
Not
capped or frozen
|
|
Active
|
|
Yes,
above base levels
|
|
2%
|
Michigan
|
|
Not
capped or frozen
|
|
Not
capped or frozen
|
|
Active
|
|
Yes,
in some areas
|
|
2%
|
Tennessee
|
|
Not
capped or frozen
|
|
Not
capped or frozen
|
|
Active
|
|
No
|
|
1%
|
(1)
|
Represents
the percentage of revenues from sales to retail customers from AEP utility
companies operating in each state to the total AEP System revenues from
sales to retail customers for the year ended December 31,
2007.
|
(2)
|
The
PUCO has approved the rate stabilization plan filed by CSPCo and OPCo that
began after the market development period and extends through December 31,
2008 during which OPCo’s retail generation rates will increase 7% annually
and CSPCo’s retail generation rates will increase 3%
annually. Distribution rates are frozen, with certain
exceptions, through December 31, 2008. See Note 4 to the
consolidated financial statements, entitled Rate
Matters.
|
(3)
|
TCC
and TNC are no longer in the retail generation supply
business. TCC and TNC provide only regulated delivery services
in ERCOT. SWEPCo is vertically integrated utility that provides
retail electric service in the SPP area of
Texas.
|
(4)
|
Includes,
where applicable, fuel and fuel portion of purchased
power.
|
FERC
Under the
FPA, the FERC regulates rates for interstate sales at wholesale, transmission of
electric power, accounting and other matters, including construction and
operation of hydroelectric projects. The FERC regulations require AEP to provide
open access transmission service at FERC-approved rates. The FERC also regulates
unbundled transmission service to retail customers. The FERC also
regulates the sale of power for resale in interstate commerce by (i) approving
contracts for wholesale sales to municipal and cooperative utilities and (ii)
granting authority to public utilities to sell power at wholesale at
market-based rates upon a showing that the seller lacks the ability to
improperly influence market prices. Except for wholesale power that
AEP delivers within its control area of the SPP, AEP has market-rate authority
from the FERC, under which much of its wholesale marketing activity takes
place. The FERC requires each public utility that owns or controls
interstate transmission facilities to file an open access network and
point-to-point transmission tariff that offers services comparable to the
utility’s own uses of its transmission system. The FERC also requires all
transmitting utilities to establish an OASIS, which electronically posts
transmission information such as available capacity and prices, and require
utilities to comply with Standards of Conduct that prohibit utilities’ system
operators from providing non-public transmission information to the utility’s
merchant energy employees. Utilities are permitted to seek recovery of certain
prudently incurred stranded costs that result from unbundled transmission
services.
The FERC
oversees the voluntary formation of RTOs, entities created to operate, plan and
control utility transmission assets. Order 2000 also prescribes certain
characteristics and functions of acceptable RTO proposals. As a
condition of the FERC’s approval in 2000 of AEP’s merger with CSW, AEP was
required to transfer functional control of its transmission facilities to one or
more RTOs. The AEP East Companies are members of PJM. SWEPCo and PSO are members
of SPP.
The FERC
has jurisdiction over the issuances of securities of our public utility
subsidiaries, the acquisition of securities of utilities, the acquisition or
sale of certain utility assets, and mergers with another electric utility or
holding company. In addition, both the FERC and state regulators are
permitted to review the books and records of any company within a holding
company system. EPACT gives the FERC “backstop” transmission siting
authority as well as increased utility merger oversight.
ELECTRIC
RESTRUCTURING AND CUSTOMER CHOICE LEGISLATION
Certain
states in AEP’s service area have adopted restructuring or customer choice
legislation. In general, this legislation provides for a transition from bundled
cost-based rate regulated electric service to unbundled cost-based rates for
transmission and distribution service and market pricing for the supply of
electricity with customer choice of supplier. At a minimum, this legislation
allows retail customers to select alternative generation suppliers. Electric
restructuring and/or customer choice began on January 1, 2001 in Ohio and on
January 1, 2002 in Michigan and the ERCOT area of Texas. Electric restructuring
in the SPP area of Texas has been delayed by the PUCT until at least 2011. AEP’s
public utility subsidiaries operate in both the ERCOT and SPP areas of
Texas. Customer Choice also began in Virginia on January 1, 2002, but
will end beginning in 2009 pursuant to the passage of legislation providing for
the re-regulation of electric utilities’ generation and supply
rates.
Ohio
Restructuring
Currently,
the Ohio Act requires vertically integrated electric utility companies that are
in the business of providing competitive retail electric service in Ohio to
separate their generating functions from their transmission and distribution
functions. Following the market development period (which ended December 31,
2005), retail customers receive distribution and, where applicable, transmission
service from the incumbent utility whose distribution rates are approved by the
PUCO and whose transmission rates are based on rates established by the FERC.
The PUCO approved CSPCo’s and OPCo’s RSPs that, among other things, addressed
default generation service rates from January 1, 2006 through December 31, 2008.
See Item 1 – Utility
Operations - Regulation—FERC for a discussion of FERC regulation of
transmission rates, Regulation—Rates—Ohio and
Note 4 to the consolidated financial statements entitled Rate Matters, included in
the 2007 Annual Reports,
for a discussion of the impact of restructuring on distribution rates.
The PUCO authorized CSPCo and OPCo to remain functionally separated through
2008.
The Ohio
Act requires CSPCo and OPCo to begin implementing market-based rates on January
1, 2009, following the expiration of their RSPs. However, in August
2007, legislation was introduced that would significantly reduce the likelihood
of CSPCo’s and OPCo’s ability to charge market-based rates for generation at the
expiration of their RSPs. The legislation has been passed by the Ohio
Senate and is being considered by the Ohio House of
Representatives. AEP management is working closely with various
stakeholders to achieve a principled, fair and well-considered approach to
electric supply pricing.
Texas
Restructuring
Signed
into law in June of 1999, the Texas Act substantially amended the regulatory
structure governing electric utilities in Texas in order to allow retail
electric competition for customers. Among other things, the Texas
Act:
|
·
|
gave
Texas customers the opportunity to choose their REP beginning January 1,
2002 (delayed until at least 2011 in the SPP portion of
Texas),
|
|
·
|
required
each utility to legally separate into a REP, a power generation company
and a transmission and distribution utility,
and
|
|
·
|
required
that REPs provide electricity at generally unregulated rates, except that
until January 1, 2007 the prices that could be charged to residential and
small commercial customers by REPs affiliated with a utility within the
affiliated utility’s service area were set by the PUCT, until certain
conditions in the Texas Act were
met.
|
The Texas
Act provides each affected utility an opportunity to recover its
generation-related regulatory assets and stranded costs resulting from the legal
separation of the transmission and distribution utility from the generation
facilities and the related introduction of retail electric
competition. Regulatory assets consist of the Texas jurisdictional
amount of generation-related regulatory assets and liabilities in the audited
financial statements as of December 31, 1998. Stranded costs consist
of the positive excess of the net regulated book value of generation assets (as
of December 31, 2001) over the market value of those assets, taking specified
factors into account, as ultimately determined in a PUCT true-up
proceeding.
In May
2005, TCC filed its stranded cost quantification application, or true-up
proceeding, with the PUCT seeking recovery of $2.4 billion of net stranded
generation costs and other recoverable true-up items. A final order
was issued in April 2006. In the final order, the PUCT determined
TCC’s net stranded generation costs and other recoverable true-up items to be
approximately $1.475 billion. Other parties have appealed the PUCT’s
final order as unwarranted or too large; TCC has appealed seeking additional
recovery consistent with the Texas Act and related rules. TCC intends
to appeal any final adverse rulings regarding the PUCT’s order in the true-up
proceedings.
After
PUCT approval, in October 2006 TCC issued $1.74 billion of securitization bonds,
including additional issuance and carrying costs through the date of
issuance. The PUCT authorized negative competition transition charges
in the amount of $356 million in October 2006. TCC is required to
refund this amount to its ratepayers. For a discussion of (i)
regulatory assets and stranded costs subject to recovery by TCC and (ii) rate
adjustments made after implementation of restructuring to allow recovery of
certain costs by or with respect to TCC and TNC, see Note 4 to the consolidated
financial statements entitled Rate Matters included in the
2007 Annual Reports.
Michigan
Customer Choice
Customer
choice commenced for I&M’s Michigan customers on January 1, 2002. Rates for
retail electric service for I&M’s Michigan customers were unbundled (though
they continue to be regulated) to allow customers the ability to evaluate the
cost of generation service for comparison with other suppliers. At December 31,
2007, none of I&M’s Michigan customers have elected to change suppliers and
no alternative electric suppliers are registered to compete in I&M’s
Michigan service territory.
Virginia
Re-regulation
In April
2007, the Virginia legislature adopted a comprehensive law providing for the
re-regulation of electric utilities’ generation and supply rates after the
December 31, 2008 expiration of capped rates. The law
provides for, among other things, biennial rate reviews beginning in 2009; rate
adjustment clauses for the recovery of a variety of costs and a minimum allowed
return on equity which will be based on the average earned return on equity of
regional vertically integrated electric utilities. The law also
provides that utilities may retain a minimum of 25% of the margins from
off-system sales with the remaining margins from such sales credited against
fuel factor expenses with a true-up to actual.
COMPETITION
The
public utility subsidiaries of AEP, like the electric industry generally, face
competition in the sale of available power on a wholesale basis, primarily to
other public utilities and power marketers. The Energy Policy Act of 1992 was
designed, among other things, to foster competition in the wholesale market by
creating a generation market with fewer barriers to entry and mandating that all
generators have equal access to transmission services. As a result, there are
more generators able to participate in this market. The principal factors in
competing for wholesale sales are price (including fuel costs), availability of
capacity and power and reliability of service.
AEP’s
public utility subsidiaries also compete with self-generation and with
distributors of other energy sources, such as natural gas, fuel oil and coal,
within their service areas. The primary factors in such competition are price,
reliability of service and the capability of customers to utilize sources of
energy other than electric power. With respect to competing generators and
self-generation, the public utility subsidiaries of AEP believe that they
generally maintain a favorable competitive position. With respect to alternative
sources of energy, the public utility subsidiaries of AEP believe that the
reliability of their service and the limited ability of customers to substitute
other cost-effective sources for electric power place them in a favorable
competitive position, even though their prices may be higher than the costs of
some other sources of energy.
Significant
changes in the global economy have led to increased price competition for
industrial customers in the United States, including those served by the AEP
System. Some of these industrial customers have requested price reductions from
their suppliers of electric power. In addition, industrial customers that are
downsizing or reorganizing often close a facility based upon its costs, which
may include, among other things, the cost of electric power. The public utility
subsidiaries of AEP cooperate with such customers to meet their business needs
through, for example, providing various off-peak or interruptible supply options
pursuant to tariffs filed with, and approved by, the various state commissions.
Occasionally, these rates are negotiated with the customer, and then filed with
the state commissions for approval. The public utility subsidiaries of AEP
believe that they are unlikely to be materially affected by this competition in
an adverse manner.
SEASONALITY
The sale
of electric power is generally a seasonal business. In many parts of the
country, demand for power peaks during the hot summer months, with market prices
also peaking at that time. In other areas, power demand peaks during the winter.
The pattern of this fluctuation may change due to the nature and location of
AEP’s facilities and the terms of power sale contracts into which AEP enters. In
addition, AEP has historically sold less power, and consequently earned less
income, when weather conditions are milder. Unusually mild weather in the future
could diminish AEP’s results of operations and may impact its financial
condition. Conversely, unusually extreme weather conditions could
increase AEP’s results of operations.
MEMCO
OPERATIONS
Our MEMCO
Operations Segment transports coal and dry bulk commodities primarily on the
Ohio, Illinois, and lower Mississippi rivers. Almost all of our
customers are nonaffiliated third parties who obtain the transport of coal and
dry bulk commodities for various uses. We charge these customers
market rates for the purpose of making a profit. Depending on market
conditions and other factors, including barge availability, we have also served
AEP utility subsidiary affiliates. Our affiliated utility
customers procure the transport of coal for use as fuel in their respective
generating plants. We charged affiliated customers rates that
reflected our costs. The MEMCO operations include approximately 1,992
barges, 38 towboats and 14 harbor boats that we own or lease.
Competition
within the barging industry for major commodity contracts is intense, with a
number of companies offering transportation services in the waterways we serve.
We compete with other carriers primarily on the basis of commodity shipping
rates, but also with respect to customer service,
available routes, value-added services (including scheduling convenience and
flexibility), information timeliness and equipment. The industry continues
to experience consolidation. The resulting companies
increasingly offer the widespread geographic reach necessary to support major
national customers. Demand for barging services can be seasonal,
particularly with respect to the movement of harvested agricultural commodities
(beginning in the late summer and extending through the fall). Cold
winter weather may also limit our operations when certain of the waterways we
serve are closed.
Our
transportation operations are subject to regulation by the U.S. Coast
Guard, federal laws, state laws and certain international
conventions. Legislation has been proposed that could make our
towboats subject to inspection by the U.S. Coast Guard.
Our
Generation and Marketing Segment consists of non-utility generating assets and a
competitive power supply and energy trading business. We enter into
short and long-term transactions to buy or sell capacity, energy and ancillary
services primarily in the ERCOT market. The assets utilized in this
segment include approximately 310 MW of domestic wind power facilities and 377
MW of coal-fired capacity obtained from TNC’s interest in the Oklaunion power
station. TNC has entered into a 20-year power agreement transferring
this generating capacity to a non-utility affiliate that we operate in order to
comply with the separation requirements of the Texas Act. The power
obtained from the Oklaunion power station is to be marketed and sold in
ERCOT. We are regulated by the PUCT for transactions inside ERCOT and
by the FERC for transactions outside of ERCOT. While peak load in
ERCOT typically occurs in the summer, we do not necessarily expect seasonal
variation in our operations.
Gas
Operations
In
January 2005, we sold a 98% controlling interest in HPL and related assets with
the remaining 2% interest being sold to the buyer in November
2005. See Note 8 to the consolidated financial statements entitled
Acquisitions, Dispositions,
Discontinued Operations, Impairments, and Assets Held for Sale, included
in the 2007 Annual Reports for more information. As a result,
management anticipates that our gas marketing operations will be limited to
managing our obligations with respect to the gas transactions entered into
before these sales.
Plaquemine
Cogeneration Facility
Pursuant
to an agreement with Dow, AEP constructed an 880 MW cogeneration facility
(“Facility”) at Dow’s chemical facility in Plaquemine, Louisiana that achieved
commercial operation status in 2004. Dow used a portion of the energy
produced by the Facility and sold the excess power to us. We agreed
to sell up to all of the excess 800 MW to Tractebel. Litigation in
connection with that power agreement has been settled. For more
information, see Note 6 to the consolidated financial statements entitled Commitments, Guarantees and
Contingencies. In November 2006, we sold our interest in the
Facility to Dow. Negotiations for the sale resulted in an after-tax
impairment of approximately $136 million. See Note 8 to the
consolidated financial statements entitled Acquisitions, Dispositions,
Discontinued Operations, Impairments and Assets Held for
Sale.
For
information regarding other non-core investments, see Note 8 to the consolidated
financial statements entitled Acquisitions, Dispositions,
Discontinued Operations, Impairments and Assets Held for Sale, included
in the 2007 Annual Reports.
ITEM
1A. RISK FACTORS
General
Risks of Our Regulated Operations
We may not be able to recover the
costs of our substantial planned investment in capital improvements and
additions. (Applies to each
registrant.)
Our
business plan calls for extensive investment in capital improvements and
additions, including the installation of environmental upgrades and retrofits,
construction and/or acquisition of additional generation units and transmission
facilities, modernizing existing infrastructure as well as other initiatives.
Our public utility subsidiaries currently provide service at rates approved by
one or more regulatory commissions. If these regulatory commissions
do not approve adjustments to the rates we charge, we would not be able to
recover the costs associated with our planned extensive
investment. This would cause our financial results to be
diminished. While we may seek to limit the impact of any denied
recovery by attempting to reduce the scope of our capital investment, there can
be no assurance as to the effectiveness of any such mitigation efforts,
particularly with respect to previously incurred costs and
commitments.
Our
planned capital investment program coincides with a material increase in the
price of the fuels used to generate electricity. Many of our
jurisdictions have fuel clauses that permit us to recover these increased fuel
costs through rates without a general rate case. While prudent
capital investment and variable fuel costs each generally warrant recovery, in
practical terms our regulators could limit the amount or timing of increased
costs that we would recover through higher rates. Any such limitation
could cause our financial results to be diminished.
While Indiana permits the recovery of
prudently incurred
costs, our request for
rate recovery may not be approved. (Applies to AEP and
I&M.)
In
January 2008, I&M filed a request to increase base rates in its Indiana
jurisdiction by approximately $82 million. The request included a return on
equity of 11.5% and the ability to introduce additional riders. The
requested increase is attributable to additional costs relating to operating in
the PJM, reliability enhancement, demand side management, additional off-system
sales margin sharing and environmental compliance costs. While
regulation in Indiana provides for a return on costs prudently incurred, there
can be no assurance that the IURC will approve all of the costs included in our
filing or that this process will result in rates providing full recovery in a
timely manner. If the IURC denies the requested rate recovery, it
could adversely impact future results of operations, cash flows and financial
conditions.
The internal allocation of AEP System
off-system sales margins has been challenged. (Applies to APCo, CSPCo,
I&M and OPCo.)
Off-system
sales margins are allocated among the AEP System companies pursuant to a
FERC-approved agreement among those companies entered into at the time of the
merger with CSW. In November 2005, we filed with the FERC a proposed
allocation methodology to be used in 2006 and beyond. The original
allocations have been challenged in different forums, including a PSO
fuel clause recovery proceeding before the OCC. In general, the
challenges assert that AEP West companies, acquired in the merger with CSW, are
being allocated a disproportionately small amount of the off-system sales
margins. The OCC and, separately, a federal district court in Texas
have each held that the FERC is the only appropriate adjudicator of such
challenges. This holding has been affirmed by a federal appellate
court. No proceeding questioning the allocation of our off-system
sales is currently before the FERC. If the FERC were to retroactively
allocate additional off-system sales margins to the AEP West companies, the AEP
East companies may be required to pay money to the AEP West
companies. Any such payments could have an adverse effect on the
results of operations, cash flows and possibly financial condition of the AEP
East companies.
We may not recover costs incurred to
construct generating plants that are canceled. (Applies to each
registrant)
Our
business plan for the construction of new generating units involves a number of
risks, including construction delays, nonperformance by equipment suppliers, and
increases in equipment and labor costs. To limit the risks of these construction
projects, we enter into equipment purchase orders and construction contracts and
incur engineering and design service costs in advance of receiving necessary
regulatory approvals and/or siting or environmental permits. If any of these
projects are cancelled for any reason, including our failure to receive
necessary regulatory approvals and/or siting or environmental permits, we could
incur significant cancellation penalties under the equipment purchase orders and
construction contracts. In addition, we may need to impair any construction
work-in process assets for any expenses we have incurred.
Certain of our revenues and results
of operations are subject to risks that are beyond our
control. (Applies to each
registrant.)
Unless
mitigated by timely and adequate regulatory recovery, the cost of repairing
damage to our utility facilities due to storms, natural disasters, wars,
terrorist acts and other catastrophic events, in excess of insurance coverage,
when applicable, may adversely impact our revenues, operating and capital
expenses and results of operations. Such events may also create
additional risks related to the supply and/or cost of equipment and
materials.
We are exposed to nuclear generation
risk. (Applies to AEP
and I&M.)
Through
I&M, we own the Cook Plant. It consists of two nuclear generating
units for a rated capacity of 2,143 MW, or 6% of our generation
capacity. We are, therefore, subject to the risks of nuclear
generation, which include the following:
·
|
the
potential harmful effects on the environment and human health resulting
from the operation of nuclear facilities and the storage, handling and
disposal of radioactive materials such as spent nuclear
fuel;
|
·
|
limitations
on the amounts and types of insurance commercially available to cover
losses that might arise in connection with our nuclear
operations;
|
·
|
uncertainties
with respect to contingencies and assessment amounts if insurance coverage
is inadequate (federal law requires owners of nuclear units to purchase
the maximum available amount of nuclear liability insurance and
potentially contribute to the losses of others);
and,
|
·
|
uncertainties
with respect to the technological and financial aspects of decommissioning
nuclear plants at the end of their licensed
lives.
|
There can
be no assurance that I&M’s preparations or risk mitigation measures will be
adequate if and when these risks are triggered.
The NRC
has broad authority under federal law to impose licensing and safety-related
requirements for the operation of nuclear generation facilities. In
the event of non-compliance, the NRC has the authority to impose fines or shut
down a unit, or both, depending upon its assessment of the severity of the
situation, until compliance is achieved. Revised safety requirements
promulgated by the NRC could necessitate substantial capital expenditures at
nuclear plants such as ours. In addition, although we have no reason
to anticipate a serious nuclear incident at our plants, if an incident did
occur, it could harm our results of operations or financial
condition. A major incident at a nuclear facility anywhere in the
world could cause the NRC to limit or prohibit the operation or licensing of any
domestic nuclear unit. Moreover, a major incident at any nuclear
facility in the U.S. could require us to make material contributory
payments.
The different regional power markets
in which we compete or will compete in the future have changing transmission
regulatory structures, which could affect our performance in these
regions. (Applies to each
registrant.)
Our
results are likely to be affected by differences in the market and transmission
regulatory structures in various regional power markets. The rules
governing the various regional power markets, including SPP and PJM, may also
change from time to time which could affect our costs or
revenues. Because the manner in which RTOs will evolve remains
unclear, we are unable to assess fully the impact that changes in these power
markets may have on our business.
The amount we charged third parties
for using our transmission facilities has been reduced and is subject to
refund. (Applies to AEP, APCo, CSPCo, I&M
and OPCo.)
In July
2003, the FERC issued an order directing PJM and MISO to make compliance filings
for their respective tariffs to eliminate the transaction-based charges for
through and out (T&O) transmission service on transactions where the energy
is delivered within those RTOs. The elimination of the T&O rates
reduced the transmission service revenues collected by the RTOs and thereby
reduced the revenues received by transmission owners under the RTOs’ revenue
distribution protocols. To mitigate the impact of lost T&O revenues, the
FERC approved temporary replacement seams elimination cost allocation (SECA)
transition rates beginning in December 2004 and extending through March
2006. Because intervenors objected to this decision, the SECA fees we
collected ($220 million) are subject to refund.
A hearing
was held in May 2006 to determine whether any of the SECA revenues should be
refunded. In August 2006, the ALJ ruled that the rate design for the recovery of
SECA charges was flawed and that a large portion was not recoverable. The ALJ
found that the SECA rates charged were unfair, unjust and discriminatory, and
that new compliance filings and refunds should be made. The ALJ also found that
unpaid SECA rates must be paid in the recommended reduced amount. The
FERC has not ruled on the matter. If the FERC upholds the decision of
the ALJ, it would disallow $90 million of the AEP East companies’ remaining $115
million of unsettled gross SECA revenues. We have recorded provisions
in the aggregate amount of $37 million related to the potential refund of SECA
rates. After completed and in-process settlements, the AEP East companies will
have a remaining reserve balance of $35 million to settle the remaining
unsettled gross SECA revenues.
An increase in the amount PJM charges
us for transmitting power over its network may not be fully
recoverable. (Applies to AEP and
I&M.)
On June
1, 2007, in response to a 2006 FERC order, PJM revised its methodology for
calculating the effect of transmission line losses in generation dispatch when
determining locational marginal prices. The new method is
designed to recognize the varying delivery costs of transmitting electricity
from individual generator locations to the places where customers consume the
energy. Due to the implementation of the new methodology, we
experienced an increase in the cost of transmitting energy to customer load
zones in the PJM. AEP has initiated discussions with PJM regarding
the impact of the new methodology and will pursue a modification through the
appropriate stakeholder processes. Management believes these
additional costs should be recoverable through retail and/or cost-based
wholesale rates. Recovery has been authorized by the PUCO and
VSCC. The filing with the IURC is pending and filings in other
affected jurisdictions are planned. In the interim, such costs in these
jurisdictions will have an adverse effect on future results of operations and
cash flows. Management is unable to predict whether full recovery
will ultimately be approved.
We could be subject to higher costs
and/or penalties related to mandatory reliability standards. (Applies to each
registrant.)
As a
result of EPACT, owners and operators of the bulk power transmission system are
subject to mandatory reliability standards promulgated by the North American
Electric Reliability Corporation and enforced by the FERC. These standards,
which previously were being applied on a voluntary basis, became mandatory in
June 2007. The standards are based on the functions that need to be performed to
ensure the bulk power system operates reliably and is guided by reliability and
market interface principles. Compliance with new reliability standards may
subject us to higher operating costs and/or increased capital expenditures.
While we expect to recover costs and expenditures from customers through
regulated rates, there can be no assurance that the applicable commissions will
approve full recovery in a timely manner. If we were found not to be
in compliance with the mandatory reliability standards, we could be subject to
sanctions, including substantial monetary penalties, which likely would not be
recoverable from customers through regulated rates.
Rate regulation may delay or deny
full recovery of costs. (Applies to each
registrant.)
Our
public utility subsidiaries currently provide service at rates approved by one
or more regulatory commissions. These rates are generally regulated
based on an analysis of the applicable utility’s expenses incurred in a test
year. Thus, the rates a utility is allowed to charge may or may not
match its expenses at any given time. There may also be a delay
between the timing of when these costs are incurred and when these costs are
recovered. While rate regulation is premised on providing a
reasonable opportunity to earn a reasonable rate of return on invested capital,
there can be no assurance that the applicable regulatory commission will judge
all of our costs to have been prudently incurred or that the regulatory process
in which rates are determined will always result in rates that will produce full
recovery of our costs in a timely manner.
We operate in a non-uniform and fluid
regulatory environment. (Applies to each
registrant.)
In
addition to the multiple levels of state regulation at the states in which we
operate, our business is subject to extensive federal
regulation. Developments in federal legislative and regulatory
initiatives (which have occurred over the past few years and which have
generally facilitated competition in the energy sector) and/or (2) state
regulation could cause the regulatory environment to become significantly more
restrictive. Further alteration of the regulatory landscape in which
we operate will impact the effectiveness of our business plan and may, because
of the continued uncertainty, harm our financial condition and results of
operations.
At times, demand for power could
exceed our supply capacity. (Applies to each
registrant.)
We are
currently obligated to supply power in parts of eleven states. From
time to time, because of unforeseen circumstances, the demand for power required
to meet these obligations could exceed our available generation
capacity. If this occurs, we would have to buy power from the
market. We may not always have the ability to pass these costs on to
our customers. Since these situations most often occur during periods
of peak demand, it is possible that the market price for power at that time
would be very high. Even if a supply shortage were brief, we could suffer
substantial losses that could reduce our results of operations.
Risks
Related to Market, Economic or Financial Volatility
Downgrades in our credit ratings
could negatively affect our ability to access capital and/or to operate our
power trading businesses. (Applies to each
registrant.)
Since the
bankruptcy of Enron, the credit ratings agencies have periodically reviewed our
capital structure and the quality and stability of our earnings. Any
negative ratings actions could constrain the capital available to our industry
and could limit our access to funding for our operations. Our
business is capital intensive, and we are dependent upon our ability to access
capital at rates and on terms we determine to be attractive. If our
ability to access capital becomes significantly constrained, our interest costs
will likely increase and our financial condition could be harmed and future
results of operations could be adversely affected.
If
Moody’s or S&P were to downgrade the long-term rating of any of the
securities of the registrants, particularly below
investment grade, the borrowing costs of that registrant would increase, which
would diminish its financial results. In addition, the registrant’s
potential pool of investors and funding sources could decrease. In
February 2008, Fitch downgraded the senior unsecured debt rating of PSO to BBB+
with stable outlook. Moody’s placed the senior unsecured debt rating
of APCo, OPCo, SWEPCo and TCC on negative outlook in January
2008. Moody’s assigns the following ratings to the senior unsecured
debt of these companies: APCo Baa2, OPCo A3, SWEPCo Baa1 and TCC
Baa2.
Our power
trading business relies on the investment grade ratings of our individual public
utility subsidiaries’ senior unsecured long-term debt. Most of our
counterparties require the creditworthiness of an investment grade entity to
stand behind transactions. If those ratings were to decline below
investment grade, our ability to operate our power trading business profitably
would be diminished because we would likely have to deposit cash or cash-related
instruments which would reduce our profits.
AEP has no income or cash flow apart
from dividends paid or other obligations due it from its
subsidiaries. (Applies to
AEP.)
AEP is a
holding company and has no operations of its own. Its ability to meet
its financial obligations associated with its indebtedness and to pay dividends
on its common stock is primarily dependent on the earnings and cash flows of its
operating subsidiaries, primarily its regulated utilities, and the ability of
its subsidiaries to pay dividends to, or repay loans from, AEP. Its
subsidiaries are separate and distinct legal entities that have no obligation
(apart from loans from AEP) to provide AEP with funds for its payment
obligations, whether by dividends, distributions or other payments. Payments to
AEP by its subsidiaries are also contingent upon their earnings and business
considerations. In addition, any payment of dividends, distributions or advances
by the utility subsidiaries to AEP would be subject to regulatory or contractual
restrictions.
Our operating results may fluctuate
on a seasonal and quarterly basis. (Applies to each
registrant.)
Electric
power generation is generally a seasonal business. In many parts of
the country, demand for power peaks during the hot summer months, with market
prices also peaking at that time. In other areas, power demand peaks
during the winter. As a result, our overall operating results in the
future may fluctuate substantially on a seasonal basis. The pattern
of this fluctuation may change depending on the terms of power sale contracts
that we enter into. In addition, we have historically sold less
power, and consequently earned less income, when weather conditions are
milder. Unusually mild weather in the future could diminish our
results of operations and harm our financial condition. Conversely,
unusually extreme weather conditions could increase AEP’s results of operations
in a manner that would not likely be sustainable.
Parties we have engaged to provide
construction materials or services may fail to perform their obligations, which
could harm our results of operations. (Applies to each
registrant.)
Our
business plan calls for extensive investment in capital improvements and
additions, including the installation of environmental upgrades, construction of
additional generation units and transmission facilities as well as other
initiatives. We are exposed to the risk of substantial price
increases in the costs of materials used in construction. We have
engaged numerous contractors and entered into a large number of agreements to
acquire the necessary materials and/or obtain the required construction related
services. As a result, we are also exposed to the risk that these
contractors and other counterparties could breach their obligations to
us. Should the counterparties to these arrangements fail to perform,
we may be forced to enter into alternative arrangements at then-current market
prices that may exceed our contractual prices and almost certainly cause delays
in that and related projects. Although our agreements are
designed to mitigate the consequences of a potential default by the
counterparty, our actual exposure may be greater than these mitigation
provisions. This would cause our financial results to be diminished, and we
might incur losses or delays in completing construction.
Changes in commodity prices may
increase our cost of producing power or decrease the amount we receive from
selling power, harming our financial performance. (Applies to each
registrant.)
We are
heavily exposed to changes in the price and availability of coal because most of
our generating capacity is coal-fired. We have contracts of varying
durations for the supply of coal for most of our existing generation capacity,
but as these contracts end or otherwise are not honored, we may not be able to
purchase coal on terms as favorable as the current
contracts. Similarly, we are heavily exposed to changes in the
price and availability of emission allowances. We use emission
allowances based on the amount of coal we use as fuel and the reductions
achieved through emission controls and other
measures. According to our estimates, we have procured
sufficient emission allowances to cover our projected needs for the next two
years and for much of the projected needs for periods beyond
that. At some point, however, we may have to obtain additional
allowances and those purchases may not be on as favorable terms as those
currently obtained.
We also
own natural gas-fired facilities, which increases our exposure to market prices
of natural gas. Natural gas prices tend to be more volatile than prices for
other fuel sources.
The price
trends for coal, natural gas and emission allowances have shown material
increases in the recent past. Changes in the cost of coal,
emission allowances or natural gas and changes in the relationship between such
costs and the market prices of power will affect our financial
results. Since the prices we obtain for power may not change at the
same rate as the change in coal, emission allowances or natural gas costs, we
may be unable to pass on the changes in costs to our customers.
In
addition, actual power prices and fuel costs will differ from those assumed in
financial projections used to value our trading and marketing transactions, and
those differences may be material. As a result, our financial results
may be diminished in the future as those transactions are marked to
market.
In Ohio, we have limited ability to
pass on our fuel costs to our customers. (Applies to AEP, CSPCo
and OPCo.)
Because
generation is no longer regulated in Ohio, we are exposed to risk from changes
in the market prices of coal, natural gas, and emissions allowances used to
generate power. The prices of coal, natural gas and emissions
allowances have increased materially in the recent past. The
protection afforded by retail fuel clause recovery mechanisms has been
eliminated by the implementation of customer choice in Ohio, which represents
approximately 20% of our fuel costs. As long as generating costs
cannot be passed through to customers as a matter of right in Ohio, we retain
these risks. If we cannot recover an amount sufficient to cover our
actual fuel costs, our results of operations and cash flows would be adversely
affected.
Downgrades in the credit ratings of
companies insuring certain of our financings could cause our costs of borrowing
to increase for the foreseeable future. (Applies to each
registrant.)
A
significant amount of our financings involve the periodic resetting of the
interest rates applicable in those financings pursuant to auctions among
investors (“Auction Rate Bonds”). In order to attract additional
investors to these auctions, we often procure financial guaranty policies that
insure our obligation to pay interest and principal on our Auction Rate
Bonds. Credit downgrades and financial difficulties of certain
providers of financial guaranty policies have significantly reduced investor
willingness to place bids on Auction Rate Bonds. These events have caused the
interest rates on Auction Rate Bonds to increase, thereby increasing our cost of
capital and diminishing our earnings. While we may seek to
limit the impact of these increased costs by attempting to refinance our Auction
Rate Bonds, there can be no assurance as to our ability to do so at attractive
rates.
Risks
Relating to State Restructuring
In Ohio, our future rates are
uncertain. (Applies to
AEP, OPCo and CSPCo.)
CSPCo and
OPCo are involved in discussions with various stakeholders in Ohio about
potential legislation to address the period following the expiration of the RSPs
on December 31, 2008. In August 2007, legislation was introduced that
would significantly reduce the likelihood of CSPCo’s and OPCo’s ability to
charge market-based rates for generation at the expiration of their
RSPs. The legislation has been passed by the Ohio Senate and still
must be considered by the Ohio House of Representatives. At this time,
management is unable to predict whether CSPCo and OPCo will transition to market
pricing, extend their RSP rates, with or without modification, or become subject
to a legislative reinstatement of some form of cost-based regulation for their
generation supply business on January 1, 2009. A return to cost-based
rates for generation supply in Ohio could have an adverse impact on our
financial condition, future results of operations and cash
flows. Further, the return of cost-based regulation could cause the
generation business of CSPCo and OPCo to meet the criteria for application of
regulatory accounting principles. Results of operations and financial condition
could be adversely affected if and when CSPCo and OPCo are required to
re-establish certain net regulatory liabilities applicable to their generation
supply business.
There is uncertainty as to our
recovery of stranded costs resulting from industry restructuring in
Texas. (Applies to
AEP.)
Restructuring
legislation in Texas required utilities with stranded costs to use market-based
methods to value certain generating assets for determining stranded
costs. We elected to use the sale of assets method to determine the
market value of TCC’s generation assets for stranded cost
purposes. In general terms, the amount of stranded costs under this
market valuation methodology is the amount by which the book value of generating
assets, including regulatory assets and liabilities that were not securitized,
exceeds the market value of the generation assets, as measured by the net
proceeds from the sale of the assets. In May 2005, TCC filed its stranded cost
quantification application with the PUCT seeking recovery of $2.4 billion of net
stranded generation costs and other recoverable true-up items. A
final order was issued in April 2006. In the final order, the PUCT
determined TCC’s net stranded generation costs and other recoverable true-up
items to be approximately $1.475 billion. We have appealed the PUCT’s
final order seeking additional recovery consistent with the Texas Restructuring
Legislation and related rules, other parties have appealed the PUCT’s final
order as unwarranted or too large. Management cannot predict the ultimate
outcome of any future court appeals or any future remanded PUCT
proceeding.
Collection of our revenues in Texas
is concentrated in a limited number of REPs. (Applies to
AEP.)
Our
revenues from the distribution of electricity in the ERCOT area of Texas are
collected from REPs that supply the electricity we distribute to their
customers. Currently, we do business with approximately seventy
REPs. In 2007, TCC’s largest customer accounted for 23% of its
operating revenues; TNC’s largest customer (a non-utility affiliate) accounted
for 35% of its operating revenues and its second largest customer accounted for
15% of its operating revenues. Adverse economic conditions,
structural problems in the Texas market or financial difficulties of one or more
REPs could impair the ability of these REPs to pay for our services or could
cause them to delay such payments. We depend on these REPs for timely
remittance of payments. Any delay or default in payment could
adversely affect the timing and receipt of our cash flows and thereby have an
adverse effect on our liquidity.
Risks
Related to Owning and Operating Generation Assets and Selling Power
Our costs of compliance with
environmental laws are significant and the cost of compliance with future
environmental laws could harm our cash flow and profitability or cause some of
our electric generating units to be uneconomical to maintain or
operate. (Applies to each
registrant.)
Our
operations are subject to extensive federal, state and local environmental
statutes, rules and regulations relating to air quality, water quality, waste
management, natural resources and health and safety. Compliance with
these legal requirements requires us to commit significant capital toward
environmental monitoring, installation of pollution control equipment, emission
fees and permits at all of our facilities. These expenditures have
been significant in the past, and we expect that they will increase in the
future. Further, environmental advocacy groups, other organizations
and some agencies in the United States are focusing considerable attention on
CO2
emissions from power generation facilities and their potential role in climate
change. Although several bills have been introduced in Congress that
would compel CO2 emission
reductions, none have advanced through the legislature. On April 2,
2007, the U.S. Supreme Court issued a decision holding that the Federal EPA has
authority to regulate emissions of CO2 and other
greenhouse gases under the CAA. Costs of compliance with
environmental regulations could adversely affect our results of operations and
financial position, especially if emission and/or discharge limits are
tightened, more extensive permitting requirements are imposed, additional
substances become regulated and the number and types of assets we operate
increase. All of our estimates are subject to significant
uncertainties about the outcome of several interrelated assumptions and
variables, including timing of implementation, required levels of reductions,
allocation requirements of the new rules and our selected compliance
alternatives. As a result, we cannot estimate our compliance costs
with certainty. The actual costs to comply could differ significantly
from our estimates. All of the costs are incremental to our current
investment base and operating cost structure. In addition, any legal
obligation that would require us to substantially reduce our emissions beyond
present levels could require extensive mitigation efforts and, in the case of
CO2
legislation, would raise uncertainty about the future viability of fossil fuels,
particularly coal, as an energy source for new and existing electric generation
facilities. While we expect to recover our expenditures for pollution
control technologies, replacement generation and associated operating costs from
customers through regulated rates (in regulated jurisdictions) or market prices
(in Ohio and Texas), without such recovery those costs could adversely affect
future results of operations and cash flows, and possibly financial
condition.
Governmental authorities may assess
penalties on us if it is determined that we have not complied with environmental
laws and regulations. (Applies to each
registrant.)
If we
fail to comply with environmental laws and regulations, even if caused by
factors beyond our control, that failure may result in the assessment of civil
or criminal penalties and fines against us. In July 2004 attorneys
general of eight states and others sued AEP and other utilities alleging that
CO2
emissions from power generating facilities constitute a public nuisance under
federal common law. The trial court dismissed the suits and
plaintiffs have appealed the dismissal. While we believe the claims
are without merit, the costs associated with reducing CO2 emissions
could harm our business and our results of operations and financial
position.
If these
or other future actions are resolved against us, substantial modifications of
our existing coal-fired power plants could be required. In addition,
we could be required to invest significantly in additional emission control
equipment, accelerate the timing of capital expenditures, pay penalties and/or
halt operations. Moreover, our results of operations and financial
position could be reduced due to the timing of recovery of these investments and
the expense of ongoing litigation.
Our revenues and results of
operations from selling power are subject to market risks that are beyond our
control. (Applies to each
registrant.)
We sell
power from our generation facilities into the spot market or other competitive
power markets or on a contractual basis. We also enter into contracts
to purchase and sell electricity, natural gas, emission allowances and coal as
part of our power marketing and energy trading operations. With
respect to such transactions, we are generally not guaranteed any rate of return
on our capital investments through mandated rates, and our revenues and results
of operations are likely to depend, in large part, upon prevailing market prices
for power in our regional markets and other competitive
markets. These market prices may fluctuate substantially over
relatively short periods of time. Trading margins may erode as
markets mature and there may be diminished opportunities for gain should
volatility decline. In addition, the FERC, which has jurisdiction
over wholesale power rates, as well as RTOs that oversee some of these markets,
may impose price limitations, bidding rules and other mechanisms to address some
of the volatility in these markets. Power supply and other similar
agreements entered into during extreme market conditions may subsequently be
held to be unenforceable by a reviewing court or the FERC. Fuel and
emissions prices may also be volatile, and the price we can obtain for power
sales may not change at the same rate as changes in fuel and/or emissions
costs. These factors could reduce our margins and therefore diminish
our revenues and results of operations.
Volatility
in market prices for fuel and power may result from:
·
|
transmission
or transportation constraints or
inefficiencies;
|
·
|
availability
of competitively priced alternative energy
sources;
|
·
|
demand
for energy commodities;
|
·
|
natural
gas, crude oil and refined products, and coal production
levels;
|
·
|
natural
disasters, wars, embargoes and other catastrophic events;
and
|
·
|
federal,
state and foreign energy and environmental regulation and
legislation.
|
Our power trading (including coal,
gas and emission
allowances trading and
power marketing) and risk management policies cannot eliminate the risk
associated with these activities. (Applies to each
registrant.)
Our power
trading (including coal, gas and emission allowances trading and power
marketing) activities expose us to risks of commodity price
movements. We attempt to manage our exposure by establishing and
enforcing risk limits and risk management procedures. These risk
limits and risk management procedures may not work as planned and cannot
eliminate the risks associated with these activities. As a result, we
cannot predict the impact that our energy trading and risk management decisions
may have on our business, operating results or financial position.
We
routinely have open trading positions in the market, within guidelines we set,
resulting from the management of our trading portfolio. To the extent
open trading positions exist, fluctuating commodity prices can improve or
diminish our financial results and financial position.
Our power
trading and risk management activities, including our power sales agreements
with counterparties, rely on projections that depend heavily on judgments and
assumptions by management of factors such as the future market prices and demand
for power and other energy-related commodities. These factors become
more difficult to predict and the calculations become less reliable the further
into the future these estimates are made. Even when our policies and
procedures are followed and decisions are made based on these estimates, results
of operations may be diminished if the judgments and assumptions underlying
those calculations prove to be inaccurate.
Our financial performance may be
adversely affected if we are unable to operate our pooled electric generating
facilities successfully. (Applies to each
registrant.)
Our
performance is highly dependent on the successful operation of our electric
generating facilities. Operating electric generating facilities
involves many risks, including:
·
|
operator
error and breakdown or failure of equipment or
processes;
|
·
|
operating
limitations that may be imposed by environmental or other regulatory
requirements;
|
·
|
fuel
supply interruptions caused by transportation constraints, adverse
weather, non-performance by our suppliers and other factors;
and
|
·
|
catastrophic
events such as fires, earthquakes, explosions, hurricanes, terrorism,
floods or other similar
occurrences.
|
A
decrease or elimination of revenues from power produced by our electric
generating facilities or an increase in the cost of operating the facilities
would adversely affect our results of operations.
Parties with whom we have contracts
may fail to perform their obligations, which could harm our results of
operations. (Applies to each
registrant.)
We are
exposed to the risk that counterparties that owe us money or power could breach
their obligations. Should the counterparties to these arrangements
fail to perform, we may be forced to enter into alternative hedging arrangements
or honor underlying commitments at then-current market prices that may exceed
our contractual prices, which would cause our financial results to be diminished
and we might incur losses. Although our estimates take into account the expected
probability of default by a counterparty, our actual exposure to a default by a
counterparty may be greater than the estimates predict.
We rely on electric transmission
facilities that we do not own or control. If these facilities do not
provide us with adequate transmission capacity, we may not be able to deliver
our wholesale electric power to the purchasers of our power. (Applies to each
registrant.)
We depend
on transmission facilities owned and operated by other unaffiliated power
companies to deliver the power we sell at wholesale. This dependence
exposes us to a variety of risks. If transmission is disrupted, or
transmission capacity is inadequate, we may not be able to sell and deliver our
wholesale power. If a region’s power transmission infrastructure is
inadequate, our recovery of wholesale costs and profits may be
limited. If restrictive transmission price regulation is imposed, the
transmission companies may not have sufficient incentive to invest in expansion
of transmission infrastructure.
The FERC
has issued electric transmission initiatives that require electric transmission
services to be offered unbundled from commodity sales. Although these
initiatives are designed to encourage wholesale market transactions for
electricity and gas, access to transmission systems may in fact not be available
if transmission capacity is insufficient because of physical constraints or
because it is contractually unavailable. We also cannot predict
whether transmission facilities will be expanded in specific markets to
accommodate competitive access to those markets.
We do not fully hedge against price
changes in commodities. (Applies to each
registrant.)
We
routinely enter into contracts to purchase and sell electricity, natural gas,
coal and emission allowances as part of our power marketing and energy and
emission allowances trading operations. In connection with these
trading activities, we routinely enter into financial contracts, including
futures and options, over-the counter options, financially-settled swaps and
other derivative contracts. These activities expose us to risks from
price movements. If the values of the financial contracts change in a
manner we do not anticipate, it could harm our financial position or reduce the
financial contribution of our trading operations.
We manage
our exposure by establishing risk limits and entering into contracts to offset
some of our positions (i.e., to hedge our exposure to demand, market effects of
weather and other changes in commodity prices). However, we do not
always hedge the entire exposure of our operations from commodity price
volatility. To the extent we do not hedge against commodity price
volatility, our results of operations and financial position may be improved or
diminished based upon our success in the market.
ITEM
1B. UNRESOLVED STAFF COMMENTS
None.
ITEM
2. PROPERTIES
GENERATION
FACILITIES
UTILITY
OPERATIONS
At
December 31, 2007, the AEP System owned (or leased where indicated) generating
plants with net power capabilities (winter rating) shown in the following
table:
Company
|
Stations
|
|
Coal
MW
|
|
Natural
Gas
MW
|
|
Nuclear
MW
|
|
Lignite
MW
|
|
Hydro
MW
|
|
Oil
MW
|
|
Total
MW
|
AEGCo
|
2
|
(a)
|
|
1,300
|
|
1,146
|
|
|
|
|
|
|
|
|
|
2,446
|
APCo
|
17
|
(b)(c)
|
|
5,093
|
|
523
|
|
|
|
|
|
681
|
|
|
|
6,297
|
CSPCo
|
7
|
(d)
|
|
2,345
|
|
1,357
|
|
|
|
|
|
|
|
|
|
3,702
|
I&M
|
9
|
(a)
|
|
2,295
|
|
|
|
2,191
|
|
|
|
15
|
|
|
|
4,501
|
KPCo
|
1
|
|
|
1,060
|
|
|
|
|
|
|
|
|
|
|
|
1,060
|
OPCo
|
8
|
(b)(c)(e)
|
|
8,472
|
|
|
|
|
|
|
|
26
|
|
|
|
8,498
|
PSO
|
8
|
(f)
|
|
1,018
|
|
3,238
|
|
|
|
|
|
|
|
25
|
|
4,281
|
SWEPCo
|
10
|
(g)
|
|
1,848
|
|
2,167
|
|
|
|
842
|
|
|
|
|
|
4,857
|
TNC
|
11
|
(f)
(h)
|
|
377
|
|
1,014
|
|
|
|
|
|
|
|
8
|
|
1,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
System
Totals
|
67
|
|
|
23,808
|
|
9,445
|
|
2,191
|
|
842
|
|
722
|
|
33
|
|
37,041
|
Percentage
of System Totals
|
|
|
|
64.3%
|
|
25.5%
|
|
5.9%
|
|
2.3%
|
|
1.9%
|
|
0.1%
|
|
|
(a)
|
Unit
1 of the Rockport Plant is owned one-half by AEGCo and one-half by
I&M. Unit 2 of the Rockport Plant is leased one-half by AEGCo and
one-half by I&M. The leases terminate in 2022 unless extended. In May
2007, AEGCo completed the purchase of the Lawrenceburg Plant, a 1,146 MW
gas-fired unit (winter rating) in Indiana from Public Service Electric and
Gas Company. In September 2007, AEGCo purchased the
Dresden Generating station, a gas-fired unit in Ohio currently under
construction. Upon completion, which is expected to be in 2009
or 2010, this unit will be a 580 MW
facility.
|
(b)
|
Unit
3 of the John E. Amos Plant is owned one-third by APCo and two-thirds by
OPCo.
|
(c)
|
APCo
owns Units 1 and 3 and OPCo owns Units 2, 4 and 5 of Philip Sporn Plant,
respectively.
|
(d)
|
CSPCo
owns generating units in common with Duke Ohio and DP&L. Its
percentage ownership interest is reflected in this table. In April 2007,
CSPCo completed the purchase of the Darby Electric Generating station, a
507 MW gas-fired unit (winter rating) in Ohio from
DP&L.
|
(e)
|
The
scrubber facilities at the General James M. Gavin Plant are
leased. OPCo is permitted to terminate the lease as early as
2010.
|
(f)
|
As
of December 31, 2007, PSO and TNC, along with Oklahoma Municipal Power
Authority and The Public Utilities Board of the City of Brownsville,
Texas, jointly owned the Oklaunion power station. PSO’s ownership interest
is reflected in this portion of the table. In February 2007, TCC sold its
interest in Oklaunion to The Public Utilities Board of the City of
Brownsville, Texas. In order to comply with the separation requirements of
the Texas Act, in January 2007, TNC entered into a 20-year purchase power
agreement transferring its generating capacity in the Oklaunion power
station to a non-utility affiliate.
|
(g)
|
SWEPCo
owns generating units in common with unaffiliated parties. Only its
ownership interest is reflected in this table. Also, SWEPCo began
commercial operation of Units 3 and 4, of 88 MW each, at its gas–fired
Mattison Plant in July 2007. Commercial operation of Units 1
and 2, of 85 MW each, at the Mattison Plant began in December
2007.
|
(h)
|
TNC’s
gas-fired and oil-fired generation has been
deactivated.
|
Cook
Nuclear Plant
The
following table provides operating information relating to the Cook
Plant.
|
Cook
Plant
|
|
Unit
1
|
|
Unit
2
|
Year
Placed in Operation
|
1975
|
|
1978
|
Year
of Expiration of NRC License
|
2034
|
|
2037
|
Nominal
Net Electrical Rating in Kilowatts
|
1,084,000
|
|
1,107,000
|
Net
Capacity Factors (a)
|
|
|
|
2007
|
97.4%
|
|
83.8%
|
2006
|
80.4%
|
|
86.5%
|
2005
|
88.8%
|
|
97.1%
|
2004
|
97.0%
|
|
81.6%
|
(a)
|
Net
Capacity Factor values for Unit 1 in 2007 reflect Nominal Net Electrical
Rating in Kilowatts of 1,084,000. The Net Capacity Factor
values for Unit 1 from 2004 through 2006 reflect the previous Nominal Net
Electrical Rating in Kilowatts of 1,036,000. The Net Electrical
Rating changed due to low pressure turbine
replacement.
|
Costs
associated with the operation (including fuel), maintenance and retirement of
nuclear plants continue to be more significant and less predictable than costs
associated with other sources of generation, in large part due to changing
regulatory requirements and safety standards, availability of nuclear waste
disposal facilities and experience gained in the operation of nuclear
facilities. However the ability of I&M to obtain adequate and timely
recovery of costs associated with the Cook Plant is not
assured. Such costs may include replacement power, any unamortized
investment at the end of the useful life of the Cook Plant (whether scheduled or
premature), the carrying costs of that investment and retirement
costs.
GENERATION
AND MARKETING
In
addition to the generating facilities described above, AEP has ownership
interests in other electrical generating facilities. Information concerning
these facilities at December 31, 2007 is listed below.
Facility
|
Fuel
|
Location
|
Capacity
Total
MW
|
Owner-ship
Interest
|
|
Status
|
|
|
|
|
|
|
|
Desert
Sky Wind Farm
|
Wind
|
Texas
|
161
|
100%
|
|
Exempt
Wholesale Generator(a)
|
|
|
|
|
|
|
|
Trent
Wind Farm
|
Wind
|
Texas
|
150
|
100%
|
|
Exempt
Wholesale Generator(a)
|
Total (b)
|
|
311
|
|
|
|
(a) As defined under rules issued pursuant to
EPACT.
(b)
|
Does
not include (i) 50% interest in Sweeny, which was sold in October 2007, or
(ii) 377 MW of coal-fired generating capacity (representing TNC’s interest
in Oklaunion power station) which TNC has sold under a 20-year purchase
power agreement to a non-utility affiliate in the Generation and Marketing
business segment.
|
See
Note 8 to the consolidated financial statements entitled Acquisitions, Dispositions,
Discontinued Operations, Impairments and Assets Held for Sale, included
in the 2007 Annual Reports, for a discussion of AEP’s disposition of independent
power producer and foreign generation assets.
TRANSMISSION AND
DISTRIBUTION FACILITIES
The
following table sets forth the total overhead circuit miles of transmission and
distribution lines of the AEP System and its operating companies and that
portion of the total representing 765kV lines:
|
Total
Overhead Circuit Miles of Transmission and Distribution
Lines
|
|
Circuit
Miles of
765kV
Lines
|
AEP
System (a)
|
223,814
|
(b)
|
|
2,116
|
|
APCo
|
51,833
|
|
|
734
|
|
CSPCo
(a)
|
15,476
|
|
|
|
|
I&M
|
22,036
|
|
|
615
|
|
Kingsport
Power Company
|
1,358
|
|
|
|
|
KPCo
|
10,959
|
|
|
258
|
|
OPCo
|
30,763
|
|
|
509
|
|
PSO
|
21,172
|
|
|
—
|
|
SWEPCo
|
21,389
|
|
|
—
|
|
TCC
|
29,650
|
|
|
—
|
|
TNC
|
17,475
|
|
|
—
|
|
WPCo
|
1,703
|
|
|
—
|
|
(a)
|
Includes
766 miles of 345,000-volt jointly owned
lines.
|
(b)
|
Includes
73 miles of overhead transmission lines not identified with an operating
company.
|
TITLES
The AEP
System’s generating facilities are generally located on lands owned in fee
simple. The greater portion of the transmission and distribution lines of the
System has been constructed over lands of private owners pursuant to easements
or along public highways and streets pursuant to appropriate statutory
authority. The rights of AEP’s public utility subsidiaries in the realty on
which their facilities are located are considered adequate for use in the
conduct of their business. Minor defects and irregularities customarily found in
title to properties of like size and character may exist, but such defects and
irregularities do not materially impair the use of the properties affected
thereby. AEP’s public utility subsidiaries generally have the right of eminent
domain which permits them, if necessary, to acquire, perfect or secure titles to
or easements on privately held lands used or to be used in their utility
operations. Recent legislation in Ohio and Virginia has restricted
the right of eminent domain previously granted for power generation
purposes.
SYSTEM TRANSMISSION LINES
AND FACILITY SITING
Laws in
the states of Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Texas,
Tennessee, Virginia, and West Virginia require prior approval of sites of
generating facilities and/or routes of high-voltage transmission lines. We have
experienced delays and additional costs in constructing facilities as a result
of proceedings conducted pursuant to such statutes, and in proceedings in which
our operating companies have sought to acquire rights-of-way through
condemnation. These proceedings may result in additional delays and
costs in future years. See Management’s Financial Discussion
and Analysis of Results of Operations included in the 2007 Annual
Reports, for more information on current siting proceedings.
CONSTRUCTION
PROGRAM
GENERAL
With
input from its state utility commissions, the AEP System continuously assesses
the adequacy of its generation, transmission, distribution and other facilities
to plan and provide for the reliable supply of electric power and energy to its
customers. In this assessment process, assumptions are continually being
reviewed as new information becomes available, and assessments and plans are
modified, as appropriate. AEP forecasts $3.8 billion, $3.7 billion
and $3.6 billion of construction expenditures, excluding AFUDC, for 2008, 2009
and 2010, respectively. Estimated construction expenditures are
subject to periodic review and modification and may vary based on the ongoing
effects of regulatory constraints, environmental regulations, business
opportunities, market volatility, economic trends, and the ability to access
capital.
PROPOSED
TRANSMISSION FACILITIES
Joint
Venture in
PJM
In June
2007 PJM authorized the construction of a major new transmission line to address
the reliability and efficiency needs of the PJM system. PJM has
identified a need for a new line to be ready as early as 2012. The
line would be 765kV for most of its length and would run approximately 290 miles
from APCo’s Amos substation in West Virginia to Allegheny Energy Inc.’s (“AYE”)
proposed Kemptown station in north central Maryland. In September
2007, AEP and AYE entered into a joint venture to construct, own and operate
transmission facilities in the PJM region, including the Amos-to-Kemptown
transmission line. In December 2007 the joint venture filed an application with
the FERC for approval of a return on equity and formula rate for the
Amos-to-Kemptown transmission line. In addition to the rate recovery
sought through the FERC, the joint venture will seek appropriate regulatory
approvals from the appropriate state utility commissions. The total cost of the
Amos-to-Kemptown line is estimated to be approximately $1.8 billion, and AEP’s
estimated share will be approximately $600 million. The joint venture
will not be consolidated with AEP for financial or tax reporting
purposes. See Management’s Financial Discussion
and Analysis of Results of Operations included in the 2007 Annual
Reports, for more information.
Joint
Venture in ERCOT
In January 2007, TCC entered into an
agreement to establish a joint venture with MidAmerican Energy Holdings Company
(“MidAmerican”) to fund, own and operate electric transmission assets in
ERCOT. In January 2007, a filing was made with the PUCT seeking
regulatory approval to operate as an electric transmission utility in Texas, to
transfer from TCC to the joint venture transmission assets and to establish a
wholesale transmission tariff. In December 2007, the PUCT issued an
order on rehearing approving the transaction and initial tariffs; AEP and
MidAmerican then closed the formation transactions. Subsidiaries of AEP and
MidAmerican each hold a 50 percent equity interest in the joint
venture. The joint venture will not be consolidated with AEP for
financial or tax reporting purposes. See Management’s Financial Discussion
and Analysis of Results of Operations and Note 8 to the consolidated
financial statements, entitled Acquisitions, Dispositions,
Discontinued Operations, Impairments and Assets Held for Sale, included
in the 2007 Annual Reports, for more information.
PROPOSED
GENERATION FACILITIES
IGCC
Projects
An independent committee of AEP’s Board
of Directors issued a landmark report in August 2004 called An Assessment of AEP’s Actions to
Mitigate the Economic Impacts of Emissions Policies, the first of its
kind in the United States. It evaluated the economic risks to the
company posed by emissions policies. In conjunction with this report,
we announced plans to construct a synthesis-gas-fired plant or plants for a
total of approximately 1,200 MW of capacity in the next five to six years
utilizing integrated gasification combined cycle (IGCC)
technology. These plans are contingent upon receiving adequate cost
recovery through rates approved by the applicable commission before beginning
construction.
Ohio
IGCC Plant
In March
2005, CSPCo and OPCo filed a joint application with the PUCO seeking authority
to recover costs related to building and operating a 629 MW IGCC power plant
using clean-coal technology. In June 2006, the PUCO issued an order
approving a tariff to recover pre-construction costs, subject to
refund. In August 2006, intervenors filed four separate appeals of
the PUCO’s order in the IGCC proceeding and this is being litigated before the
Ohio Supreme Court. Pending the outcome of the litigation, CSPCo and
OPCo announced they would delay the start of construction of the IGCC
plant. Recent estimates of the cost to build this plant have
escalated to $2.7 billion, based on an in service date of 2017. See
Management’s Financial
Discussion and Analysis of Results of Operations and Note 4 to the
consolidated financial statements, entitled Rate Matters, included in the
2007 Annual Reports, for more information.
West
Virginia IGCC
In
January 2006, APCo filed a petition with the WVPSC requesting its approval of a
Certificate of Public Convenience and Necessity (CCN) to construct a proposed
629 MW IGCC plant. The plant is to be built adjacent to APCo’s
existing Mountaineer Generating Station in Mason County, WV for an estimated
cost of $2.2 billion. In June 2007, APCo filed a request with the
Virginia SCC for a rate adjustment clause to recover a return on the
plant. Neither filing has yet been approved. See Management’s Financial Discussion
and Analysis of Results of Operations and Note 4 to the consolidated
financial statements, entitled Rate Matters, included in the
2007 Annual Reports, for more information.
SWEPCo
Projects
In May
2006, SWEPCo announced plans to construct new peaking and intermediate
generation facilities that would be operational in 2008 and
2010. Commercial operation of Units 3 and 4 at the gas–fired Mattison
Plant began in July 2007, while Units 1 and 2 began commercial operation in
December 2007. In 2008, SWEPCo anticipates commencing construction of
a 480 MW combined-cycle natural gas fired plant at its existing Arsenal Hill
Power Plant in Shreveport, Louisiana (the “Stall Unit”). Filings have
been made with the PUCT, APSC and the LPSC seeking approvals to construct the
Stall Unit. The Stall Unit is estimated to cost $378 million,
excluding AFUDC, and is expected to be operational in mid-2010. See
Note 4 to the consolidated financial statements, entitled Rate Matters, included in the
2007 Annual Reports, for more information.
In August
2006, SWEPCo announced plans to build a new base load 600 MW pulverized coal
ultra-supercritical generating unit in Arkansas named the John W. Turk, Jr.
Power Plant (the “Turk Plant”). SWEPCo submitted filings with the
APSC, PUCT and LPSC seeking approvals to proceed with the Turk
Plant. SWEPCo anticipates owning 73% of the Turk Plant and will be
the operator. During 2007, SWEPCO signed joint ownership,
construction and operations agreements with Oklahoma Municipal Power Authority,
Arkansas Electric Cooperative Corporation and East Texas Electric Cooperative
for the remaining 27% of the Turk Plant. The Turk Plant is estimated
to cost $1.3 billion with SWEPCo’s 73% portion estimated to cost $950 million,
excluding AFUDC. If approved on a timely basis, the Turk Plant is
expected to be operational in 2012. In November 2007, the APSC
approved construction of the plant. The remaining applications for
approval are pending. See Note 4 to the consolidated financial
statements, entitled Rate
Matters, included in the 2007 Annual Reports, for more
information.
PSO
Projects
Pursuant
to plans announced in March 2006, in 2007 PSO commenced construction of 170 MWs
of peaking generation, comprised of two 85 MW simple-cycle natural gas
combustion turbines, at each of its existing generation facilities in Jenks,
Oklahoma (Riverside Station) and Anadarko, Oklahoma (Southwestern
Station). The peaking facilities are expected to be completed in 2008
at an aggregate cost of approximately $117 million and have been approved by the
Oklahoma Corporation Commission (“OCC”). In October, 2007 the OCC
denied PSO’s and Oklahoma Gas and Electric Company’s (“OG&E”) request for
pre-approval of a new 950 MW coal-fueled electricity generating unit near Red
Rock, Oklahoma. The joint venture between PSO and OG&E to
construct the plant was subsequently terminated. See Note 4 to the consolidated
financial statements, entitled Rate Matters, included in the
2007 Annual Reports, for more information.
Other
Our
significant planned environmental investments in emission control installations
at existing coal-fired plants and our commitment to IGCC and ultra-supercritical
technology reinforce our belief that coal will be a lower-emission domestic
energy source of the future and further signals our commitment to invest in
clean, environmentally safe technology. For additional
information regarding anticipated environmental expenditures, see Management’s Financial Discussion
and Analysis of Results of Operations under the heading entitled Environmental
Matters.
CONSTRUCTION
EXPENDITURES
The
following table shows construction expenditures (including environmental
expenditures) during 2005, 2006 and 2007 and current estimates of 2008, 2009 and
2010 construction expenditures, in each case excluding AFUDC, capitalized
interest and assets acquired under leases.
|
2005
Actual
|
2006
Actual
|
2007
Actual
|
2008
Estimate
|
2009
Estimate
|
2010
Estimate
|
|
(in
thousands)
|
Total
AEP System (a)
|
$2,501,600
|
(b)
|
$3,522,100
|
(c)
|
$3,402,900
|
(d)
|
$3,829,700
|
|
$3,749,900
|
$3,599,600
|
APCo
|
634,000
|
|
922,700
|
|
712,000
|
|
726,100
|
|
753,200
|
628,600
|
CSPCo
|
171,600
|
|
315,100
|
|
330,200
|
|
404,200
|
|
351,000
|
329,800
|
I&M
|
317,100
|
|
306,900
|
|
282,400
|
|
385,700
|
|
440,200
|
380,300
|
OPCo
|
733,400
|
|
968,700
|
|
805,400
|
|
634,700
|
|
591,100
|
549,900
|
PSO
|
139,700
|
|
245,200
|
|
302,600
|
|
276,500
|
|
363,300
|
463,300
|
SWEPCo
|
151,200
|
|
330,300
|
|
510,600
|
|
741,000
|
|
620,000
|
637,600
|
(a)
|
Includes
expenditures of other subsidiaries not shown. The figures reflect
construction expenditures, not investments in subsidiary
companies. Excludes discontinued
operations.
|
(b)
|
Excludes
$293 million for the purchase of Ceredo (APCo) and Waterford (CSPCo)
generating plants and Cash Flow Statement Adjustments (Statement of Cash
Flow Including AFUDC Debt Equals
$2,403,800)
|
(c)
|
Excludes
Cash Flow Statement Adjustments (Statement of Cash Flow Including AFUDC
Debt Equals $3,528,000)
|
(d)
|
Excludes
$512 million for the purchase of Lawrenceburg, Dresden (AEGCo) and Darby
(CSPCo) and Cash Flow Statement Adjustments (Statement of Cash Flow
Including AFUDC Debt Equals
$3,556,000)
|
The
System construction program is reviewed continuously and is revised from time to
time in response to changes in estimates of customer demand, business and
economic conditions, the cost and availability of capital, environmental
requirements and other factors. Changes in construction schedules and costs, and
in estimates and projections of needs for additional facilities, as well as
variations from currently anticipated levels of net earnings, Federal income and
other taxes, and other factors affecting cash requirements, may increase or
decrease the estimated capital requirements for the System’s construction
program.
POTENTIAL UNINSURED
LOSSES
Some
potential losses or liabilities may not be insurable or the amount of insurance
carried may not be sufficient to meet potential losses and liabilities,
including liabilities relating to damage to our generating plants and costs of
replacement power. Unless allowed to be recovered through rates, future losses
or liabilities which are not completely insured could have a material adverse
effect on results of operations and the financial condition of AEP and other AEP
System companies. For risks related to owning a nuclear generating unit, see
Note 10 to the consolidated financial statements entitled Nuclear for information with
respect to nuclear incident liability insurance.
ITEM
3. LEGAL PROCEEDINGS
For a
discussion of material legal proceedings, see Note 6 to the consolidated
financial statements, entitled Commitments, Guarantees and
Contingencies, incorporated by reference in Item 8.
ITEM
4. SUBMISSION OF MATTERS TO A VOTE
OF
SECURITY HOLDERS
AEP, APCo, OPCo and SWEPCo.
None.
CSPCo, I&M and PSO.
Omitted pursuant to Instruction I(2)(c).
EXECUTIVE OFFICERS OF THE
REGISTRANTS
AEP. The following
persons are, or may be deemed, executive officers of AEP. Their ages are given
as of February 1, 2008.
Name
|
|
Age
|
|
Office (a)
|
Michael
G. Morris
|
|
61
|
|
Chairman
of the Board, President and Chief Executive Officer
|
Nicholas
K. Akins
|
|
47
|
|
Executive
Vice President
|
Carl
L. English
|
|
61
|
|
Chief
Operating Officer
|
Thomas
M. Hagan
|
|
63
|
|
Executive
Vice President
|
John
B. Keane
|
|
61
|
|
Senior
Vice President, General Counsel and Secretary
|
Holly
Keller Koeppel
|
|
49
|
|
Executive
Vice President and Chief Financial Officer
|
Robert
P. Powers
|
|
53
|
|
President-AEP
Utilities
|
Stephen
P. Smith
|
|
46
|
|
Senior
Vice President
|
Brian
X. Tierney
|
|
40
|
|
Executive
Vice President—AEP East Utilities of AEPSC
|
Susan
Tomasky
|
|
54
|
|
Executive
Vice President
|
(a)
|
Before
joining AEPSC in his current position in January 2004, Mr. Morris was
Chairman of the Board, President and Chief Executive Officer of Northeast
Utilities (1997-2003). Messrs. Akins, Hagan, Powers and Tierney and Ms.
Tomasky and Ms. Koeppel have been employed by AEPSC or System companies in
various capacities (AEP, as such, has no employees) for the past five
years. Messrs. Hagan and Powers, Ms. Koeppel and Ms. Tomasky
became executive officers of AEP effective with their promotions to
Executive Vice President on September 9, 2002, October 24, 2001, November
18, 2002 and January 26, 2000, respectively. As a result of AEP’s
realignment of its executive management team in July 2004, Mr. Keane
became an executive officer of AEP. Before joining AEPSC in his
current position in July 2004, Mr. Keane was President of Bainbridge
Crossing Advisors. Mr. English joined AEP as President-Utility
Group and became an executive officer of AEP on August 1,
2004. Before joining AEPSC in his current position in August
2004, Mr. English was President and Chief Executive Officer of Consumers
Energy gas division (1999-2004). Before joining AEPSC as Senior
Vice President and Treasurer in 2003, Mr. Smith was President and Chief
Operating Officer-Corporate Services for NiSource
(1999-2003). As a result of AEP’s realignment of management,
Mr. Akins became an executive officer of AEP in August 2006; and Messrs.
Smith and Tierney became executive officers of AEP in January
2008. All of the above officers are appointed annually for a
one-year term by the board of directors of
AEP.
|
APCo, OPCo and
SWEPCo. The names of the executive officers of APCo, OPCo and
SWEPCo, the positions they hold with these companies, their ages as of February
1, 2008, and a brief account of their business experience during the past five
years appear below. The directors and executive officers of APCo, OPCo and
SWEPCo are elected annually to serve a one-year term.
Name
|
|
Age
|
|
Position
|
|
Period
|
Michael
G. Morris (a)(b)
|
|
61
|
|
Chairman
of the Board, President, Chief Executive Officer and Director of
AEP
|
|
2004-Present
|
|
|
|
|
Chairman
of the Board, Chief Executive Officer and Director of APCo, OPCo and
SWEPCo
|
|
2004-Present
|
|
|
|
|
Chairman
of the Board, President and Chief Executive Officer of Northeast
Utilities
|
|
1997-2003
|
Nicholas
K. Akins (a)
|
|
47
|
|
Executive
Vice President of AEP
|
|
2006-Present
|
|
|
|
|
Executive
Vice President-Generation and Director of AEPSC
|
|
2006-Present
|
|
|
|
|
Vice
President and Director of APCo and OPCo
|
|
2006-Present
|
|
|
|
|
Director
of SWEPCo
|
|
2006-Present
|
|
|
|
|
President
and Chief Operating Officer of SWEPCo
|
|
2004-2006
|
|
|
|
|
Vice
President-Energy Market Services of AEPSC
|
|
2002-2004
|
Carl
L. English (c)
|
|
61
|
|
Chief
Operating Officer
|
|
2008-Present
|
|
|
|
|
President-AEP
Utilities of AEP
|
|
2004-2007
|
|
|
|
|
Director
and Vice President of APCo, OPCo and SWEPCo
|
|
2004-Present
|
|
|
|
|
President
and Chief Executive Officer of Consumers Energy gas
division
|
|
1999-2004
|
Thomas
M. Hagan (d)
|
|
63
|
|
Executive
Vice President of AEP
|
|
2006-Present
|
|
|
|
|
Executive
Vice President-AEP Utilities-West of AEPSC
|
|
2004-Present
|
|
|
|
|
Vice
Chairman of the Board of SWEPCo
|
|
2004-Present
|
|
|
|
|
Vice
President and Director of SWEPCo
|
|
2002-Present
|
|
|
|
|
Vice
President and Director of APCo and OPCo
|
|
2002-2004
|
|
|
|
|
Executive
Vice President-Shared Services of AEPSC
|
|
2002-2004
|
John
B. Keane (e)
|
|
61
|
|
Senior
Vice President, General Counsel and Secretary of AEP
|
|
2004-Present
|
|
|
|
|
Director
of APCo, OPCo and SWEPCo
|
|
2004-Present
|
|
|
|
|
President
of Bainbridge Crossing Advisors
|
|
2003-2004
|
Holly
Keller Koeppel (a)
|
|
49
|
|
Executive
Vice President and Chief Financial Officer of AEP
|
|
2006-Present
|
|
|
|
|
Executive
Vice President-AEP Utilities-East of AEPSC
|
|
2004-2006
|
|
|
|
|
Vice
President of APCo and OPCo
|
|
2003-Present
|
|
|
|
|
Director
of APCo and OPCo
|
|
2004-Present
|
|
|
|
|
Chief
Financial Officer of APCo, OPCo and SWEPCo
|
|
2006-Present
|
|
|
|
|
Vice
President and Director of SWEPCO
|
|
2006-Present
|
|
|
|
|
Executive
Vice President-Commercial Operations of AEPSC
|
|
2002-2004
|
Robert
P. Powers (f)
|
|
53
|
|
President-AEP
Utilities of AEP
|
|
2008-Present
|
|
|
|
|
Executive
Vice President of AEP
|
|
2004-2007
|
|
|
|
|
Executive
Vice President-AEP Utilities East of AEPSC
|
|
2006-2007
|
|
|
|
|
Director
of AEPSC
|
|
2001-Present
|
|
|
|
|
Executive
Vice President-Generation of AEPSC
|
|
2003-2006
|
|
|
|
|
Director
and Vice President of APCo and OPCo
|
|
2001-Present
|
|
|
|
|
Director
and Vice President of SWEPCo
|
|
2008-Present
|
|
|
|
|
Executive
Vice President-Nuclear Generation and Technical Services of
AEPSC
|
|
2001-2003
|
Stephen
P. Smith (g)
|
|
46
|
|
Senior
Vice President—Shared Services of AEPSC
|
|
2008-Present
|
|
|
|
|
Senior
Vice President and Treasurer of AEP
|
|
2004-2007
|
|
|
|
|
Vice
President and Director of APCo, OPCo and SWEPCo
|
|
2004-Present
|
|
|
|
|
Senior
Vice President and Treasurer of AEPSC
|
|
2003-2007
|
|
|
|
|
Treasurer
of AEPSC, APCo, OPCo and SWEPCo
|
|
2003-2007
|
|
|
|
|
President
and Chief Operating Officer-Corporate Services for
NiSource
|
|
1999-2003
|
Brian
X. Tierney
|
|
40
|
|
Executive
Vice President—AEP East Utilities of AEPSC
|
|
2008-Present
|
|
|
|
|
Senior
Vice President—Commercial Operations of AEPSC
|
|
2005-2007
|
|
|
|
|
Senior
Vice President— Energy Marketing of AEPSC
|
|
2003-2005
|
Susan
Tomasky (c)
|
|
54
|
|
President,
AEP Transmission of AEPSC
|
|
2008-Present
|
|
|
|
|
Executive
Vice President of AEP
|
|
2004-Present
|
|
|
|
|
Executive
Vice President-Shared Services of AEPSC
|
|
2006-2007
|
|
|
|
|
Chief
Financial Officer and Vice President of AEP
|
|
2001-2006
|
|
|
|
|
Executive
Vice President-Chief Financial Officer of AEPSC
|
|
2004-2006
|
|
|
|
|
Director
of AEPSC
|
|
1998-Present
|
|
|
|
|
Vice
President and Director of APCo, OPCo and SWEPCo
|
|
2000-Present
|
|
|
|
|
Executive
Vice President-Policy, Finance and Strategic Planning of
AEPSC
|
|
2001-2004
|
(a)
|
Messrs.
Morris and Akins and Ms. Koeppel are directors of CSPCo, I&M and
PSO.
|
(b)
|
Mr.
Morris is a director of Alcoa, Inc., Cincinnati Bell, Inc. and The
Hartford Financial Services Group, Inc.
|
(c)
|
Mr.
English and Ms. Tomasky are directors of CSPCo, I&M and
PSO.
|
(d)
|
Mr.
Hagan is a director of PSO, and is an executive officer of AEP and
SWEPCo.
|
(e)
|
Mr.
Keane is a director of CSPCo and KPCo.
|
(f)
|
Mr.
Powers is a director of CSPCo, I&M and PSO.
|
(g)
|
Mr.
Smith is a director of CSPCo and
KPCo.
|
APCo:
Name
|
|
Age
|
|
Position
|
|
Period
|
Dana
E. Waldo
|
|
56
|
|
President
and Chief Operating Officer of APCo
|
|
2004-Present
|
|
|
|
|
President
and Chief Executive Officer of West Virginia Roundtable
|
|
1999-2004
|
OPCo:
Name
|
|
Age
|
|
Position
|
|
Period
|
Joseph
Hamrock
|
|
44
|
|
President
and Chief Operating Officer of CSPCo and OPCo
|
|
2008-Present
|
|
|
|
|
Senior
Vice President and Chief Information Officer of AEPSC
|
|
2003-2007
|
SWEPCo:
Name
|
|
Age
|
|
Position
|
|
Period
|
Venita
McCellon-Allen
|
|
48
|
|
President
and Chief Operating Officer of SWEPCo
|
|
2006-Present
|
|
|
|
|
Director
and Senior Vice President-Shared Services of AEPSC
|
|
2004-2006
|
|
|
|
|
Director
of APCo, I&M, OPCo and SWEPCo
|
|
2004-2006
|
|
|
|
|
Senior
Vice President-Human Resources for Baylor Health Care
Systems
|
|
2000-2004
|
PART
II
ITEM
5. MARKET FOR REGISTRANTS’ COMMON EQUITY,
RELATED
STOCKHOLDER MATTERS
AND
ISSUER PURCHASES OF EQUITY SECURITIES
AEP. The information required
by this item is incorporated herein by reference to the material under AEP Common Stock and Dividend
Information in the 2007 Annual Report.
APCo, CSPCo, I&M, OPCo, PSO and
SWEPCo. The common stock of these companies is held solely by AEP. The
amounts of cash dividends on common stock paid by these companies to AEP during
2007, 2006 and 2005 are incorporated by reference to the material under Statements of Changes in Common
Shareholder’s Equity and Comprehensive Income (Loss) in the 2007 Annual
Reports.
The
following table provides information about purchases by AEP (or its
publicly-traded subsidiaries) during the quarter ended December 31, 2007 of
equity securities that are registered by AEP (or its publicly-traded
subsidiaries) pursuant to Section 12 of the Exchange Act:
ISSUER
PURCHASES OF EQUITY SECURITIES
Period
|
|
Total
Number
of
Shares
Purchased
|
|
Average
Price
Paid
per
Share
|
|
Total
Number Of Shares Purchased as Part of Publicly Announced Plans or
Programs
|
|
Maximum
Number
(or
Approximate Dollar Value) of Shares that May Yet Be
Purchased
Under the Plans or Programs
|
|
10/01/07
– 10/31/07
|
|
|
-
|
|
$
|
-
|
|
|
-
|
|
$
|
-
|
|
11/01/07
– 11/30/07
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
12/01/07
– 12/31/07
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total
|
|
|
-
|
|
$
|
-
|
|
|
-
|
|
$
|
-
|
|
ITEM
6. SELECTED FINANCIAL DATA
CSPCo, I&M and,
PSO. Omitted pursuant to Instruction I(2)(a).
AEP, APCo, OPCo and
SWEPCo. The information required by this item is incorporated
herein by reference to the material under Selected Consolidated Financial Data
in the 2007 Annual Reports.
ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF
FINANCIAL CONDITION
AND
RESULTS OF OPERATION
APCo, CSPCo, I&M, OPCo, PSO and
SWEPCo. Omitted pursuant to Instruction I(2)(a). Management’s
narrative analysis of the results of operations and other information required
by Instruction I(2)(a) is incorporated herein by reference to the material under
Management’s Financial
Discussion and Analysis of Results of Operations in
the 2007 Annual Reports.
AEP, APCo, OPCo and
SWEPCo. The
information required by this item is incorporated herein by reference to the
material under Management’s
Financial Discussion and Analysis of Results of Operations in the 2007 Annual
Reports.
ITEM
7A. QUANTITATIVE AND QUALITATIVE
DISCLOSURES
ABOUT MARKET RISK
AEP, APCo, CSPCo, I&M, OPCo, PSO
and SWEPCo. The information required by this item is incorporated herein
by reference to the material under Management’s Financial Discussion
and Analysis of Results of Operations in the 2007 Annual
Reports.
ITEM
8. FINANCIAL STATEMENTS
AND
SUPPLEMENTARY DATA
AEP, APCo, CSPCo, I&M, OPCo, PSO
and SWEPCo. The information required by this item is incorporated herein
by reference to the financial statements and financial statement schedules
described under Item 15 herein.
ITEM
9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
AEP, APCo, CSPCo, I&M, OPCo, PSO
and SWEPCo. None.
ITEM
9A. CONTROLS AND PROCEDURES
During
2007, management, including the principal executive officer and principal
financial officer of each of American Electric Power Company, Inc., Appalachian
Power Company, Columbus Southern Power Company, Indiana Michigan Power Company,
Ohio Power Company, Public Service Company of Oklahoma and Southwestern Electric
Power Company (each a “Registrant” and collectively the “Registrants”) evaluated
each respective Registrant’s disclosure controls and
procedures. Disclosure controls and procedures are defined as
controls and other procedures of the Registrants that are designed to ensure
that information required to be disclosed by the Registrants in the reports that
they file or submit under the Exchange Act are recorded, processed, summarized
and reported within the time periods specified in the Commission’s rules and
forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by the Registrants in the reports that they file or submit under
the Exchange Act is accumulated and communicated to each Registrant’s
management, including the principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
As of
December 31, 2007, these officers concluded that the disclosure controls and
procedures in place are effective and provide reasonable assurance that the
disclosure controls and procedures accomplished their objectives. The
Registrants continually strive to improve their disclosure controls and
procedures to enhance the quality of their financial reporting and to maintain
dynamic systems that change as events warrant.
There
have been no changes in the Registrants’ internal control over financial
reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the
Exchange Act) during the fourth quarter of 2007 that materially affected, or are
reasonably likely to materially affect, the Registrants’ internal controls over
financial reporting.
Management
is required to assess and report on the effectiveness of its internal control
over financial reporting as of December 31, 2007. As a result of that
assessment, management determined that there were no material weaknesses as of
December 31, 2007 and, therefore, concluded that each Registrant’s internal
control over financial reporting was effective.
Additional
information required by this item of the Registrants is incorporated by
reference to Management’s
Report on Internal Control over Financial Reporting, included in the 2007
Annual Report of each Registrant.
ITEM
9B. OTHER INFORMATION
None.
PART
III
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS
AND
CORPORATE GOVERNANCE
CSPCo, I&M and PSO.
Omitted pursuant to Instruction I(2)(c).
AEP:
Directors, Director Nomination
Process and Audit Committee. The information required by this
item concerning directors and nominees for election as directors at AEP’s annual
meeting of shareholders (Item 401 of Regulation S-K), the director nomination
process (Item 407(c)(3)) and the audit committee (Item 407(d)(4) and (d)(5)) is
incorporated herein by reference to information contained in the definitive
proxy statement of AEP for the 2008 annual meeting of shareholders.
Executive
Officers. Reference also is made to the information under the
caption Executive Officers of
the Registrants in Part I, Item 4 of this report.
Code of
Ethics. AEP’s Principles of Business Conduct is the code of
ethics that applies to AEP’s Chief Executive Officer, Chief Financial Officer
and principal accounting officer. The Principles of Business Conduct is
available on AEP’s website at www.aep.com. The Principles
of Business Conduct will be made available, without charge, in print to any
shareholder who requests such document from Investor Relations, American
Electric Power Company, Inc., 1 Riverside Plaza, Columbus,
Ohio 43215.
If any substantive amendments to the
Principles of Business Conduct are made or any waivers are granted, including
any implicit waiver, from a provision of the Principles of Business Conduct, to
its Chief Executive Officer, Chief Financial Officer or principal accounting
officer, AEP will disclose the nature of such amendment or waiver on AEP’s
website, www.aep.com, or in a report on Form
8-K.
Beneficial Ownership Reporting
Compliance. The information required by this item is
incorporated herein by reference to information contained in the definitive
proxy statement of AEP for the 2008 annual meeting of shareholders.
APCo
and OPCo:
Directors and Executive
Officers. The information required by this item is
incorporated herein by reference to the information in the definitive
information statement of each company for the 2008 annual meeting of
stockholders. Reference also is made to the information under the caption Executive Officers of the
Registrants in Part I, Item 4 of this report.
Audit
Committee. Each of APCo and OPCo is a controlled subsidiary of
AEP and does not have a separate audit committee.
Code of
Ethics. AEP’s Principles of Business Conduct is the code of
ethics that applies to the Chief Executive Officer, Chief Financial Officer and
principal accounting officer of APCo and OPCo. The discussion of AEP’s
Principles of Business Conduct above is incorporated herein by
reference. If any substantive amendments to the Principles of
Business Conduct are made or any waivers are granted, including any implicit
waiver, from a provision of the Principles of Business Conduct, to the Chief
Executive Officer, Chief Financial Officer or principal accounting officer of
APCo or OPCo, as applicable, that company will disclose the nature of such
amendment or waiver on AEP’s website, www.aep.com, or in a report
on Form 8-K.
SWEPCo:
Directors and Executive
Officers. The names of the directors and executive officers of
SWEPCo, the positions they hold with SWEPCo, their ages as of February 1, 2008,
and a brief account of their business experience during the past five years
appear below or under the caption Executive Officers of the
Registrants in Part I, Item 4 of this report.
Name
|
|
Age
|
|
Position
|
|
Period
|
Dennis
E. Welch (a)
|
|
56
|
|
Executive
Vice President, Environment, Safety, Health and Facilities of
AEPSC
|
|
2008-Present
|
|
|
|
|
Executive
Vice President of AEP |
|
2008-Present |
|
|
|
|
Senior
Vice President of AEP
|
|
2005-2007
|
|
|
|
|
Director
of APCo, OPCo and SWEPCo
|
|
2005-Present
|
|
|
|
|
Senior
Vice President-Environment and Safety and Director of
AEPSC
|
|
2005-Present
|
|
|
|
|
President
of Yankee Gas Services Company
|
|
2001-2005
|
(a) Mr.
Welch is a director of CSPCo and KPCo.
Audit
Committee. SWEPCo is a controlled subsidiary of AEP and does
not have a separate audit committee.
Code of
Ethics. AEP’s Principles of Business Conduct is the code of
ethics that applies to the Chief Executive Officer, Chief Financial Officer and
principal accounting officer of SWEPCo. The discussion of AEP’s Principles of
Business Conduct above is incorporated herein by reference. If any
substantive amendments to the Principles of Business Conduct are made or any
waivers are granted, including any implicit waiver, from a provision of the
Principles of Business Conduct, to its Chief Executive Officer, Chief Financial
Officer or principal accounting officer, SWEPCo will disclose the nature of such
amendment or waiver on AEP’s website, www.aep.com, or in a report
on Form 8-K.
ITEM
11. EXECUTIVE COMPENSATION
CSPCo, I&M and
PSO. Omitted pursuant to Instruction I(2)(c).
AEP. The information required
by this item is incorporated herein by reference to the material under Directors Compensation and Stock
Ownership, Executive Compensation and the performance graph of the
definitive proxy statement of AEP for the 2008 annual meeting of
shareholders.
APCo and OPCo. The information
required by this item is incorporated herein by reference to the material under
Executive Compensation
of the definitive information statement of each company for the 2008
annual meeting of stockholders.
SWEPCo. The information
required by this item is incorporated herein by reference to the material under
Executive Compensation
of the definitive proxy statement of AEP for the 2008 annual meeting of
shareholders.
ITEM
12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL
OWNERS AND MANAGEMENT AND
RELATED
STOCKHOLDER MATTERS
CSPCo, I&M and PSO Omitted
pursuant to Instruction I(2)(c).
AEP. The information required
by this item is incorporated herein by reference to the material under Share Ownership of Directors and
Executive Officers of the definitive proxy statement of AEP for the 2008
annual meeting of shareholders.
APCo and OPCo. The information
required by this item is incorporated herein by reference to the material under
Share Ownership of Directors
and Executive Officers in the definitive information statement of each
company for the 2008 annual meeting of stockholders.
SWEPCo. All 7,536,640
outstanding shares of Common Stock, $18 par value, of SWEPCo are directly and
beneficially held by AEP. Holders of the Cumulative Preferred Stock of SWEPCo
generally have no voting rights, except with respect to certain corporate
actions and in the event of certain defaults in the payment of dividends on such
shares.
The table
below shows the number of shares of AEP Common Stock and stock-based units that
were beneficially owned, directly or indirectly, as of January 1, 2008, by each
director and nominee of SWEPCo and each of the executive officers of SWEPCo
named in the summary compensation table, and by all directors and executive
officers of SWEPCo as a group. It is based on information provided to SWEPCo by
such persons. No such person owns any shares of any series of the Cumulative
Preferred Stock of SWEPCo. Unless otherwise noted, each person has sole voting
power and investment power over the number of shares of AEP Common Stock and
stock-based units set forth opposite his or her name. Fractions of shares and
units have been rounded to the nearest whole number.
Name
|
|
Shares
(a)
|
|
Stock
Units
(b)
|
|
Total
|
|
Nicholas
K. Akins
|
|
5,900
|
|
|
|
12,686
|
|
18,586
|
|
Carl
L. English
|
|
20,899
|
|
|
|
55,997
|
|
76,896
|
|
Thomas
M. Hagan
|
|
104,385
|
|
|
|
29,980
|
|
134,365
|
|
John
B. Keane
|
|
11,071
|
|
|
|
28,671
|
|
39,742
|
|
Holly
Keller Koeppel
|
|
1,775
|
|
|
|
34,788
|
|
36,563
|
|
Venita
McCellon-Allen
|
|
7,398
|
|
|
|
29,493
|
|
36,891
|
|
Michael
G. Morris
|
|
444,950
|
|
(c)
|
|
164,893
|
|
609,843
|
|
Robert
P. Powers
|
|
46,738
|
|
|
|
35,793
|
|
82,531
|
|
Stephen
P. Smith
|
|
18,493
|
|
|
|
10,156
|
|
28,649
|
|
Susan
Tomasky
|
|
4,370
|
|
|
|
104,109
|
|
108,479
|
|
Dennis
E. Welch
|
|
6,666
|
|
|
|
25,943
|
|
32,609
|
|
All
Directors and
Executive
Officers
|
|
672,645
|
|
(d)
|
|
532,509
|
|
1,205,154
|
|
|
AEP
Retirement
Savings
Plan
|
Name
|
(Share
Equivalents)
|
Nicholas
K. Akins
|
—
|
Carl
L. English
|
—
|
Thomas
M. Hagan
|
5,892
|
John
B. Keane
|
—
|
Holly
Keller Koeppel
|
275
|
Venita
McCellon-Allen
|
—
|
Michael
G. Morris
|
—
|
Robert
P. Powers
|
737
|
Stephen
P. Smith
|
—
|
Susan
Tomasky
|
4,370
|
Dennis
E. Welch
|
—
|
All
Directors and
Executive
Officers
|
11,274
|
With
respect to the share equivalents held in the AEP Retirement Savings Plan, such
persons have sole voting power, but the investment/disposition power is subject
to the terms of the Plan. Also, includes the following numbers of shares
attributable to options exercisable within 60 days: Mr. Akins, 5,900;
Mr. Hagan, 88,000; Mr. Morris, 149,000; Mr. Powers, 46,001; Mr.
Smith, 15,650; and Mr. Welch, 6,666.
(a) Includes
share equivalents held in the AEP Retirement Savings Plan in the amounts
listed.
(b)
|
This
column includes amounts deferred in stock units and held under AEP’s
various director and officer benefit
plans.
|
(c)
|
Represents
less than 1% of the total number of shares
outstanding.
|
(d) Includes restricted shares with different vesting schedules and
accrued dividends.
EQUITY COMPENSATION PLAN
INFORMATION
The
following table summarizes the ability of AEP to issue common stock pursuant to
equity compensation plans as of December 31, 2007:
Plan Category
|
|
Number
of securities to be issued upon exercise of outstanding options warrants
and rights
(a)
|
|
Weighted
average exercise price of outstanding options, warrants and
rights
(b)
|
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
(c)
|
Equity
compensation plans approved by security holders(1)
|
|
1,196,181
|
|
$32.63
|
|
17,602,275
|
Equity
compensation plans not approved by security holders
|
|
0
|
|
0
|
|
0
|
Total
|
|
1,196,181
|
|
$32.63
|
|
17,602,275
|
(1)
|
Consists
of shares to be issued upon exercise of outstanding options granted under
the Amended and Restated American Electric Power System Long-Term
Incentive Plan and the CSW 1992 Long-Term Incentive Plan (CSW
Plan). The CSW Plan was in effect prior to the consummation of
the AEP-CSW merger. All unexercised options granted under the CSW Plan
were converted into 0.6 options to purchase AEP common shares, vested on
the merger date and will expire ten years after their grant date. No
additional options will be issued under the CSW
Plan.
|
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE
CSPCo, I&M and
PSO: Omitted pursuant to Instruction I(2)(c).
AEP: The
information required by this item is incorporated herein by reference to the
definitive proxy statement of AEP for the 2008 annual meeting of
shareholders.
APCo, OPCo and
SWEPCo: Certain Relationships and Related
Transactions. None.
Director
Independence. None of the directors of APCo, OPCo or SWEPCo is
independent because each director is either (i) an officer of the company in
which each serves as director, or (ii) an officer of AEP.
ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES
AEP. The following
table presents fees for professional audit services rendered by Deloitte &
Touche LLP for the audit of AEP’s annual financial statements for the years
ended December 31, 2007 and December 31, 2006, and fees billed for other
services rendered by Deloitte & Touche LLP during those
periods.
|
2007
|
|
2006
|
Audit
Fees (1)
|
$11,747,000
|
|
$12,644,000
|
Audit-Related
Fees (2)
|
1,456,000
|
|
1,035,000
|
Tax
Fees (3)
|
1,820,000
|
|
703,000
|
TOTAL
|
$15,023,000
|
|
$14,382,000
|
(1)
|
Audit
fees in 2006 and 2007 consisted primarily of fees related to the audit of
the Company’s annual consolidated financial statements, including each
registrant subsidiary. Audit fees also included auditing
procedures performed in accordance with Sarbanes-Oxley Act Section 404 and
the related Public Company Accounting Oversight Board Auditing Standard
Number 5 regarding the Company’s internal control over financial
reporting. This category also includes work generally only the
independent registered public accounting firm can reasonably be expected
to provide. The reduction from 2006 relates primarily to efficiencies
enabled by the aforementioned auditing standard.
|
|
|
(2)
|
Audit
related fees consisted principally of regulatory, statutory, employee
benefit plan audits, and audit-related work in connection with
acquisitions, dispositions, and new ventures.
|
|
|
(3)
|
Tax
fees consisted principally of tax compliance services. Tax
compliance services are services rendered based upon facts already in
existence or transactions that have already occurred to document, compute,
and obtain government approval for amounts to be included in tax
filings. The increase from 2006 relates primarily to assisting
the Company in connection with an approved change in accounting method
from the Internal Revenue Service.
|
APCo and OPCo. The information
required by this item is incorporated herein by reference to the definitive
information statement of each company for the 2008 annual meeting of
stockholders.
CSPCo,
I&M and PSO and SWEPCo.
Each of
the above is a wholly-owned subsidiary of AEP and does not have a separate audit
committee. A description of the AEP Audit Committee pre-approval policies, which
apply to these companies, is contained in the definitive proxy statement of AEP
for the 2008 annual meeting of shareholders. The following table presents
directly billed fees for professional services rendered by Deloitte & Touche
LLP for the audit of these companies’ annual financial statements for the years
ended December 31, 2006 and 2007, and fees directly billed for other services
rendered by Deloitte & Touche LLP during those periods. Deloitte
& Touche LLP also provides additional professional and other services to the
AEP System, the cost of which may ultimately be allocated to these companies
though not billed directly to them. For a description of these fees and
services, see the definitive proxy statement of AEP for the 2008 annual meeting
of shareholders.
|
CSPCo
|
I&M
|
|
2007
|
2006
|
2007
|
2006
|
Audit
Fees
|
$1,333,878
|
$1,417,304
|
$1,653,620
|
$1,544,365
|
Audit-Related
Fees
|
51,072
|
31,755
|
67,010
|
248,233
|
Tax
Fees
|
58,621
|
22,913
|
67,071
|
26,216
|
TOTAL
|
$1,443,571
|
$1,471,972
|
$1,787,701
|
$1,818,814
|
|
PSO
|
SWEPCo
|
|
2007
|
2006
|
2007
|
2006
|
Audit
Fees
|
$807,663
|
$643,041
|
$915,937
|
$745,835
|
Audit-Related
Fees
|
31,855
|
16,772
|
36,252
|
87,657
|
Tax
Fees
|
48,108
|
18,804
|
56,628
|
22,134
|
TOTAL
|
$887,626
|
$678,617
|
$1,008,817
|
$855,626
|
PART
IV
ITEM
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
The
following documents are filed as a part of this
report:
|
|
1. Financial
Statements:
|
The
following financial statements have been incorporated herein by reference
pursuant to Item 8.
|
AEP
and Subsidiary Companies:
|
Reports
of Independent Registered Public Accounting Firm; Management’s Report on
Internal Control over Financial Reporting; Consolidated Statements of
Operations for the years ended December 31, 2007, 2006 and 2005;
Consolidated Balance Sheets as of December 31, 2007 and 2006; Consolidated
Statements of Cash Flows for the years ended December 31, 2007, 2006 and
2005; Consolidated Statements of Changes in Common Shareholders’ Equity
and Comprehensive Income (Loss) for the years ended December 31, 2007,
2006 and 2005; Notes to Consolidated Financial
Statements.
|
APCo,
CSPCo, I&M, OPCo, SWEPCo
|
Consolidated
Statements of Income (or Statements of Operations) for the years ended
December 31, 2007, 2006 and 2005; Consolidated Statements of Changes in
Common Shareholder’s Equity and Comprehensive Income (Loss) for the years
ended December 31, 2007, 2006 and 2005; Consolidated Balance Sheets as of
December 31, 2007 and 2006; Consolidated Statements of Cash Flows for the
years ended December 31, 2007, 2006 and 2005; Notes to Financial
Statements of Registrant Subsidiaries; Report of Independent Registered
Public Accounting Firm.
|
PSO:
|
Statements
of Income (or Statements of Operations) for the years ended December 31,
2007, 2006 and 2005; Statements of Changes in Common Shareholder’s Equity
and Comprehensive Income (Loss) for the years ended December 31, 2007,
2006 and 2005; Balance Sheets as of December 31, 2007 and 2006; Statements
of Cash Flows for the years ended December 31, 2007, 2006 and 2005; Notes
to Financial Statements of Registrant Subsidiaries; Report of Independent
Registered Public Accounting Firm.
|
2. Financial
Statement Schedules:
|
Financial
Statement Schedules are listed in the Index to Financial Statement
Schedules (Certain schedules have been omitted because the required
information is contained in the notes to financial statements or because
such schedules are not required or are not applicable). Report of
Independent Registered Public Accounting Firm.
|
3. Exhibits:
|
Exhibits
for AEP, APCo, CSPCo, I&M, OPCo, PSO and SWEPCo are listed in the
Exhibit Index and are incorporated herein by
reference.
|
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) 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.
|
|
|
|
|
|
|
|
By:
|
/s/ Holly
Keller Koeppel
|
|
|
(Holly
Keller Koeppel, Executive Vice President
|
|
|
and
Chief Financial Officer)
|
Date:
February 28, 2008
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
(i) Principal
Executive Officer:
|
|
|
|
|
|
|
|
|
|
/s/ Michael
G. Morris
|
|
Chairman
of the Board, President,
|
|
February
28, 2008
|
(Michael
G. Morris)
|
|
Chief
Executive Officer
|
|
|
|
|
And
Director
|
|
|
|
|
|
|
|
(ii) Principal
Financial Officer:
|
|
|
|
|
|
|
|
|
|
/s/ Holly
Keller Koeppel
|
|
Executive
Vice President and
|
|
February
28, 2008
|
(Holly
Keller Koeppel)
|
|
Chief
Financial Officer
|
|
|
|
|
|
|
|
(iii) Principal
Accounting Officer:
|
|
|
|
|
|
|
|
|
|
/s/ Joseph
M. Buonaiuto
|
|
Senior
Vice President, Controller and
|
|
February
28, 2008
|
(Joseph
M. Buonaiuto)
|
|
Chief
Accounting Officer
|
|
|
|
|
|
|
|
(iv) A
Majority of the Directors:
|
|
|
|
|
|
|
|
|
|
*E.
R. Brooks
|
|
|
|
|
*Donald
M. Carlton
|
|
|
|
|
*Ralph
D. Crosby, Jr.
|
|
|
|
|
*John
P. DesBarres
|
|
|
|
|
*Robert
W. Fri
|
|
|
|
|
*Linda
A. Goodspeed
|
|
|
|
|
*Thomas
E. Hoaglin
|
|
|
|
|
*William
R. Howell
|
|
|
|
|
*Lester
A. Hudson, Jr.
|
|
|
|
|
*Lionel
L. Nowell, III
|
|
|
|
|
*Richard
L. Sandor
|
|
|
|
|
*Donald
G. Smith
|
|
|
|
|
*Kathryn
D. Sullivan
|
|
|
|
|
|
|
|
|
|
|
*By:
|
/s/ Holly
Keller Koeppel
|
|
|
|
February
28, 2008
|
|
(Holly
Keller Koeppel, Attorney-in-Fact)
|
|
|
|
|
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) 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. The signature of the undersigned
company shall be deemed to relate only to matters having reference to such
company and any subsidiaries thereof.
|
Public
Service Company of Oklahoma
|
|
Southwestern
Electric Power Company
|
|
|
|
|
|
By:
|
/s/ Holly
Keller Koeppel
|
|
|
(Holly
Keller Koeppel, Vice President
and
Chief Financial Officer)
|
Date:
February 28, 2008
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated. The signature of each of the undersigned
shall be deemed to relate only to matters having reference to the above-named
company and any subsidiaries thereof.
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
(i) Principal
Executive Officer:
|
|
|
|
|
|
|
|
|
|
/s/ Michael
G. Morris
|
|
Chairman
of the Board,
|
|
February
28, 2008
|
(Michael
G. Morris)
|
|
Chief
Executive Officer and Director
|
|
|
|
|
|
|
|
(ii) Principal
Financial Officer:
|
|
|
|
|
|
|
|
|
|
/s/ Holly
Keller Koeppel
|
|
Vice
President,
|
|
February
28, 2008
|
(Holly
Keller Koeppel)
|
|
Chief
Financial Officer and Director
|
|
|
|
|
|
|
|
(iii) Principal
Accounting Officer:
|
|
|
|
|
|
|
|
|
|
/s/ Joseph
M. Buonaiuto
|
|
Controller
and
|
|
February
28, 2008
|
(Joseph
M. Buonaiuto)
|
|
Chief
Accounting Officer
|
|
|
|
|
|
|
|
(iv) A
Majority of the Directors:
|
|
|
|
|
|
|
|
|
|
*Nicholas
K. Akins
|
|
|
|
|
*Carl
L. English
|
|
|
|
|
*Thomas
M. Hagan
|
|
|
|
|
*John
B. Keane
|
|
|
|
|
*Robert
P. Powers
|
|
|
|
|
*Stephen
P. Smith
|
|
|
|
|
*Susan
Tomasky
|
|
|
|
|
*Dennis
E. Welch
|
|
|
|
|
|
|
|
|
|
*By:
|
/s/ Holly
Keller Koeppel
|
|
|
|
February
28, 2008
|
|
(Holly
Keller Koeppel, Attorney-in-Fact)
|
|
|
|
|
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) 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. The signature of the undersigned
company shall be deemed to relate only to matters having reference to such
company and any subsidiaries thereof.
|
Appalachian
Power Company
|
|
Columbus
Southern Power Company
|
|
Ohio
Power Company
|
|
By:
|
/s/ Holly
Keller Koeppel
|
|
|
(Holly
Keller Koeppel, Vice President
and
Chief Financial Officer)
|
Date:
February 28, 2008
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated. The signature of each of the undersigned
shall be deemed to relate only to matters having reference to the above-named
company and any subsidiaries thereof.
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
(i) Principal
Executive Officer:
|
|
|
|
|
|
|
|
|
|
/s/ Michael
G. Morris
|
|
Chairman
of the Board,
|
|
February
28, 2008
|
(Michael
G. Morris)
|
|
Chief
Executive Officer and Director
|
|
|
|
|
|
|
|
(ii) Principal
Financial Officer:
|
|
|
|
|
|
|
|
|
|
/s/ Holly
Keller Koeppel
|
|
Vice
President,
|
|
February
28, 2008
|
(Holly
Keller Koeppel)
|
|
Chief
Financial Officer and Director
|
|
|
|
|
|
|
|
(iii) Principal
Accounting Officer:
|
|
|
|
|
|
|
|
|
|
/s/ Joseph
M. Buonaiuto
|
|
Controller
and
|
|
February
28, 2008
|
(Joseph
M. Buonaiuto)
|
|
Chief
Accounting Officer
|
|
|
|
|
|
|
|
(iv) A
Majority of the Directors:
|
|
|
|
|
|
|
|
|
|
*Nicholas
K. Akins
|
|
|
|
|
*Carl
L. English
|
|
|
|
|
*John
B. Keane
|
|
|
|
|
*Robert
P. Powers
|
|
|
|
|
*Stephen
P. Smith
|
|
|
|
|
*Susan
Tomasky
|
|
|
|
|
*Brian
X. Tierney
|
|
|
|
|
*Dennis
E. Welch
|
|
|
|
|
|
|
|
|
|
*By:
|
/s/ Holly
Keller Koeppel
|
|
|
|
February
28, 2008
|
|
(Holly
Keller Koeppel, Attorney-in-Fact)
|
|
|
|
|
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) 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. The signature of the undersigned
company shall be deemed to relate only to matters having reference to such
company and any subsidiaries thereof.
|
Indiana
Michigan Power Company
|
|
By:
|
/s/ Holly
Keller Koeppel
|
|
|
(Holly Keller Koeppel Vice
President
and
Chief Financial Officer)
|
Date:
February 28, 2008
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated. The signature of each of the undersigned
shall be deemed to relate only to matters having reference to the above-named
company and any subsidiaries thereof.
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
(i) Principal
Executive Officer:
|
|
|
|
|
|
|
|
|
|
/s/ Michael
G. Morris
|
|
Chairman
of the Board,
|
|
February
28, 2008
|
(Michael
G. Morris)
|
|
Chief
Executive Officer and Director
|
|
|
|
|
|
|
|
(ii) Principal
Financial Officer:
|
|
|
|
|
|
|
|
|
|
/s/ Holly
Keller Koeppel
|
|
Vice
President,
|
|
February
28, 2008
|
(Holly
Keller Koeppel)
|
|
Chief
Financial Officer and Director
|
|
|
|
|
|
|
|
(iii) Principal
Accounting Officer:
|
|
|
|
|
|
|
|
|
|
/s/ Joseph
M. Buonaiuto
|
|
Controller
and
|
|
February
28, 2008
|
(Joseph
M. Buonaiuto)
|
|
Chief
Accounting Officer
|
|
|
|
|
|
|
|
(iv) A
Majority of the Directors:
|
|
|
|
|
|
|
|
|
|
*Nicholas
K. Akins
|
|
|
|
|
*Carl
L. English
|
|
|
|
|
*Allen
R. Glassburn
|
|
|
|
|
*Joann
M. Grevenow
|
|
|
|
|
*Patrick
C. Hale
|
|
|
|
|
*Marc
E. Lewis
|
|
|
|
|
*Helen
J. Murray
|
|
|
|
|
*Robert
P. Powers
|
|
|
|
|
*Susanne
M. Moorman Rowe
|
|
|
|
|
*Susan
Tomasky
|
|
|
|
|
|
|
|
|
|
*By:
|
/s/ Holly
Keller Koeppel
|
|
|
|
February
28, 2008
|
|
(Holly
Keller Koeppel, Attorney-in-Fact)
|
|
|
|
|
INDEX
TO FINANCIAL STATEMENT SCHEDULES
|
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
|
The
following financial statement schedules are included in this
report:
|
|
AMERICAN
ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
Schedule
II — Valuation and Qualifying Accounts and Reserves
|
APPALACHIAN
POWER COMPANY AND SUBSIDIARIES
Schedule
II — Valuation and Qualifying Accounts and Reserves
|
COLUMBUS
SOUTHERN POWER COMPANY AND SUBSIDIARIES
Schedule
II — Valuation and Qualifying Accounts and Reserves
|
INDIANA
MICHIGAN POWER COMPANY AND SUBSIDIARIES
Schedule
II — Valuation and Qualifying Accounts and Reserves
|
OHIO
POWER COMPANY CONSOLIDATED
Schedule
II — Valuation and Qualifying Accounts and Reserves
|
PUBLIC
SERVICE COMPANY OF OKLAHOMA
Schedule
II — Valuation and Qualifying Accounts and Reserves
|
SOUTHWESTERN
ELECTRIC POWER COMPANY CONSOLIDATED
Schedule
II — Valuation and Qualifying Accounts and
Reserves
|
We have
audited the consolidated financial statements of American Electric Power
Company, Inc. and subsidiary companies (the “Company”) as of December 31, 2007
and 2006, and for each of the three years in the period ended December 31, 2007,
and the Company's internal control over financial reporting as of December 31,
2007, and have issued our reports thereon dated February 28, 2008 (which reports
express unqualified opinions and, with respect to the report on the consolidated
financial statements, includes an explanatory paragraph concerning the adoption
of new accounting pronouncements in 2005, 2006, and 2007); such consolidated
financial statements and reports are included in your 2007 Annual Report and are
incorporated herein by reference. Our audits also included the
consolidated financial statement schedule of the Company listed in Item
15. This consolidated financial statement schedule is the responsibility
of the Company's management. Our responsibility is to express an opinion
based on our audits. In our opinion, such consolidated financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material respects, the
information set forth therein.
/s/
Deloitte & Touche LLP
Columbus,
Ohio
February
28, 2008
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have
audited the consolidated financial statements of Appalachian Power Company and
subsidiaries, Columbus Southern Power Company and subsidiaries, Indiana Michigan
Power Company and subsidiaries, Ohio Power Company Consolidated, Public Service
Company of Oklahoma and Southwestern Electric Power Company Consolidated
(collectively the “Companies”) as of December 31, 2007 and 2006, and for each of
the three years in the period ended December 31, 2007, and have issued our
reports thereon dated February 28, 2008 (which reports express unqualified
opinions and include an explanatory paragraph concerning the adoption of new
accounting pronouncements in 2005, 2006 and 2007 where applicable); such
financial statements and reports are included in your 2007 Annual Reports and
are incorporated herein by reference. Our audits also included the
financial statement schedules of the Companies listed in
Item 15. These financial statement schedules are the responsibility of the
Companies’ management. Our responsibility is to express an opinion based
on our audits. In our opinion, such financial statement schedules, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information set forth
therein.
/s/
Deloitte & Touche LLP
Columbus,
Ohio
February
28, 2008
AMERICAN
ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
SCHEDULE
II — VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Column
A
|
|
Column
B
|
|
Column
C
|
|
Column
D
|
|
Column
E
|
|
|
|
|
|
|
|
|
Additions
|
|
|
|
|
|
|
|
Description
|
|
Balance
at Beginning of Period
|
|
Charged
to Costs and Expenses
|
|
Charged
to Other
Accounts
(a)
|
|
Deductions
(b)
|
|
Balance
at
End
of
Period
|
|
|
|
|
|
(in
thousands)
|
|
Deducted
from Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Provision for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Uncollectible
Accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended December 31, 2007
|
|
$
|
29,828
|
|
$
|
46,234
|
|
$
|
1,311
|
|
$
|
25,327
|
|
$
|
52,046
|
|
|
|
Year
Ended December 31, 2006
|
|
|
30,553
|
|
|
29,831
|
|
|
1,001
|
|
|
31,557
|
|
|
29,828
|
|
|
|
Year
Ended December 31, 2005
|
|
|
77,175
|
|
|
27,384
|
|
|
24
|
|
|
74,030
|
|
|
30,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
Recoveries on accounts previously written off.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
Uncollectible accounts written off.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APPALACHIAN
POWER COMPANY AND SUBSIDIARIES
SCHEDULE
II — VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Column
A
|
|
Column
B
|
|
Column
C
|
|
Column
D
|
|
Column
E
|
|
|
|
|
|
|
|
|
Additions
|
|
|
|
|
|
|
|
Description
|
|
Balance
at Beginning of Period
|
|
Charged
to Costs and Expenses
|
|
Charged
to Other
Accounts
(a)
|
|
Deductions
(b)
|
|
Balance
at
End
of
Period
|
|
|
|
|
|
(in
thousands)
|
|
Deducted
from Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Provision for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Uncollectible
Accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended December 31, 2007
|
|
$
|
4,334
|
|
$
|
12,501
|
|
$
|
1,205
|
|
$
|
4,092
|
|
$
|
13,948
|
|
|
|
Year
Ended December 31, 2006
|
|
|
1,805
|
|
|
4,012
|
|
|
999
|
|
|
2,482
|
|
|
4,334
|
|
|
|
Year
Ended December 31, 2005
|
|
|
5,561
|
|
|
3,304
|
|
|
21
|
|
|
7,081
|
|
|
1,805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
Recoveries on accounts previously written off.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
Uncollectible accounts written off.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COLUMBUS
SOUTHERN POWER COMPANY AND SUBSIDIARIES
SCHEDULE
II — VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Column
A
|
|
Column
B
|
|
Column
C
|
|
Column
D
|
|
Column
E
|
|
|
|
|
|
|
|
|
Additions
|
|
|
|
|
|
|
|
Description
|
|
Balance
at Beginning of Period
|
|
Charged
to Costs and Expenses
|
|
Charged
to Other
Accounts
(a)
|
|
Deductions
(b)
|
|
Balance
at
End
of
Period
|
|
|
|
|
|
(in
thousands)
|
|
Deducted
from Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Provision for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Uncollectible
Accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended December 31, 2007
|
|
$
|
546
|
|
$
|
2,017
|
|
$
|
-
|
|
$
|
-
|
|
$
|
2,563
|
|
|
|
Year
Ended December 31, 2006
|
|
|
1,082
|
|
|
189
|
|
|
-
|
|
|
725
|
|
|
546
|
|
|
|
Year
Ended December 31, 2005
|
|
|
674
|
|
|
408
|
|
|
-
|
|
|
-
|
|
|
1,082
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
Recoveries on accounts previously written off.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
Uncollectible accounts written off.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INDIANA
MICHIGAN POWER COMPANY AND SUBSIDIARIES
SCHEDULE
II — VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Column
A
|
|
Column
B
|
|
Column
C
|
|
Column
D
|
|
Column
E
|
|
|
|
|
|
|
|
|
Additions
|
|
|
|
|
|
|
|
Description
|
|
Balance
at Beginning of Period
|
|
Charged
to Costs and Expenses
|
|
Charged
to Other
Accounts
(a)
|
|
Deductions
(b)
|
|
Balance
at
End
of
Period
|
|
|
|
|
|
(in
thousands)
|
|
Deducted
from Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Provision for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Uncollectible
Accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended December 31, 2007
|
|
$
|
601
|
|
$
|
2,137
|
|
$
|
-
|
|
$
|
27
|
|
$
|
2,711
|
|
|
|
Year
Ended December 31, 2006
|
|
|
898
|
|
|
208
|
|
|
-
|
|
|
505
|
|
|
601
|
|
|
|
Year
Ended December 31, 2005
|
|
|
187
|
|
|
819
|
|
|
-
|
|
|
108
|
|
|
898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
Recoveries on accounts previously written off.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
Uncollectible accounts written off.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OHIO
POWER COMPANY CONSOLIDATED
SCHEDULE
II — VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Column
A
|
|
Column
B
|
|
Column
C
|
|
Column
D
|
|
Column
E
|
|
|
|
|
|
|
|
|
Additions
|
|
|
|
|
|
|
|
Description
|
|
Balance
at Beginning of Period
|
|
Charged
to Costs and Expenses
|
|
Charged
to Other
Accounts
(a)
|
|
Deductions
(b)
|
|
Balance
at
End
of
Period
|
|
|
|
|
|
(in
thousands)
|
|
Deducted
from Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Provision for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Uncollectible
Accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended December 31, 2007
|
|
$
|
824
|
|
$
|
2,666
|
|
$
|
-
|
|
$
|
94
|
|
$
|
3,396
|
|
|
|
Year
Ended December 31, 2006
|
|
|
1,517
|
|
|
243
|
|
|
-
|
|
|
936
|
|
|
824
|
|
|
|
Year
Ended December 31, 2005
|
|
|
93
|
|
|
1,425
|
|
|
-
|
|
|
1
|
|
|
1,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
Recoveries on accounts previously written off.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
Uncollectible accounts written off.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PUBLIC
SERVICE COMPANY OF OKLAHOMA
SCHEDULE
II — VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Column
A
|
|
Column
B
|
|
Column
C
|
|
Column
D
|
|
Column
E
|
|
|
|
|
|
|
|
|
Additions
|
|
|
|
|
|
|
|
Description
|
|
Balance
at Beginning of Period
|
|
Charged
to Costs and Expenses
|
|
Charged
to Other
Accounts
(a)
|
|
Deductions
(b)
|
|
Balance
at
End
of
Period
|
|
|
|
|
|
(in
thousands)
|
|
Deducted
from Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Provision for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Uncollectible
Accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended December 31, 2007
|
|
$
|
5
|
|
$
|
-
|
|
$
|
-
|
|
$
|
5
|
|
$
|
-
|
|
|
|
Year
Ended December 31, 2006
|
|
|
240
|
|
|
(81
|
)
(c)
|
|
-
|
|
|
154
|
|
|
5
|
|
|
|
Year
Ended December 31, 2005
|
|
|
76
|
|
|
164
|
|
|
-
|
|
|
-
|
|
|
240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Recoveries
on accounts previously written off.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Uncollectible
accounts written off.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) Includes
a credit of $81 thousand from a true-up adjustment as a result of changes
to the System Integration Agreement and the CSW Operating
Agreement.
|
|
SOUTHWESTERN
ELECTRIC POWER COMPANY CONSOLIDATED
SCHEDULE
II — VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Column
A
|
|
Column
B
|
|
Column
C
|
|
Column
D
|
|
Column
E
|
|
|
|
|
|
|
|
|
Additions
|
|
|
|
|
|
|
|
Description
|
|
Balance
at Beginning of Period
|
|
Charged
to Costs and Expenses
|
|
Charged
to Other
Accounts
(a)
|
|
Deductions
(b)
|
|
Balance
at
End
of
Period
|
|
|
|
|
|
(in
thousands)
|
|
Deducted
from Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Provision for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Uncollectible
Accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended December 31, 2007
|
|
$
|
130
|
|
$
|
23
|
|
$
|
-
|
|
$
|
10
|
|
$
|
143
|
|
|
|
Year
Ended December 31, 2006
|
|
|
548
|
|
|
(37
|
)
(c)
|
|
-
|
|
|
381
|
|
|
130
|
|
|
|
Year
Ended December 31, 2005
|
|
|
45
|
|
|
534
|
|
|
-
|
|
|
31
|
|
|
548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Recoveries
on accounts previously written off.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Uncollectible
accounts written off.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) Includes
a credit of $95 thousand from a true-up adjustment as a result of changes
to the System Integration Agreement and the CSW Operating
Agreement.
|
|
EXHIBIT
INDEX
|
The
documents listed below are being filed or have previously been filed on
behalf of the Registrants shown and are incorporated herein by reference
to the documents indicated and made a part hereof. Exhibits
(“Ex”) not identified as previously filed are filed
herewith. Exhibits, designated with a dagger (†), are
management contracts or compensatory plans or arrangements required to be
filed as an Exhibit to this Form pursuant to Item 14(c) of this
report.
|
Exhibit
Designation
|
|
Nature of Exhibit
|
|
Previously Filed as Exhibit
to:
|
REGISTRANT:
AEP‡ File No. 1-3525
|
|
|
3(a)
|
|
Composite
of the Restated Certificate of Incorporation of AEP, dated January 13,
1999.
|
|
1998
Form 10-K, Ex 3(c)
|
*3(b)
|
|
Composite
By-Laws of AEP, as amended as of December 12, 2007.
|
|
|
4(a)
|
|
Indenture
(for unsecured debt securities), dated as of May 1, 2001, between AEP and
The Bank of New York, as Trustee.
|
|
Registration
Statement No. 333-86050, Ex 4(a)(b)(c)
Registration
Statement No. 333-105532, Ex 4(d)(e)(f)
|
4(b)
|
|
Purchase
Agreement dated as of March 8, 2005, between AEP and Merrill Lynch
International.
|
|
Form
10-Q, Ex 4(a), March 31, 2005
|
10(a)
|
|
Interconnection
Agreement, dated July 6, 1951, among APCo, CSPCo, KPCo, OPCo and I&M
and with AEPSC, as amended.
|
|
Registration
Statement No. 2-52910, Ex 5(a)
Registration
Statement No. 2-61009, Ex 5(b)
1990
Form 10-K, Ex 10(a)(3)
|
10(b)
|
|
Restated
and Amended Operating Agreement, among PSO, SWEPCo and AEPSC, Issued on
February 10, 2006, Effective May 1, 2006.
|
|
2002
Form 10-K, Ex 10(b)
Form
10-Q, Ex 10(b), March 31, 2006
|
10(c)
|
|
Transmission
Agreement, dated April 1, 1984, among APCo, CSPCo, I&M, KPCo, OPCo and
with AEPSC as agent, as amended.
|
|
1985
Form 10-K, Ex 10(b)
1988
Form 10-K, Ex 10(b)(2)
|
10(d)
|
|
Transmission
Coordination Agreement, dated October 29, 1998, among PSO, TCC, TNC,
SWEPCo and AEPSC.
|
|
2002
Form 10-K, Ex 10(d)
|
10(e)(1)
|
|
Amended
and Restated Operating Agreement of PJM and AEPSC on behalf of APCo,
CSPCo, I&M, KPCo, OPCo, Kingsport Power Company and Wheeling Power
Company.
|
|
2004
Form 10-K, Ex 10(e)(1)
|
10(e)(2)
|
|
PJM
West Reliability Assurance Agreement among Load Serving Entities in the
PJM West service area.
|
|
2004
Form 10-K, Ex 10(e)(2)
|
10(e)(3)
|
|
Master
Setoff and Netting Agreement among PJM and AEPSC on behalf of APCo, CSPCo,
I&M, KPCo, OPCo, Kingsport Power Company and Wheeling Power
Company.
|
|
2004
Form 10-K, Ex 10(e)(3)
|
10(f)
|
|
Lease
Agreements, dated as of December 1, 1989, between AEGCo or I&M and
Wilmington Trust Company, as amended.
|
|
Registration
Statement No. 33-32752, Ex 28(c)(1-6)(C)
Registration
Statement No. 33-32753, Ex 28(a)(1-6)(C)
AEGCo
1993 Form 10-K, Ex 10(c)(1-6)(B)
I&M
1993 Form 10-K, Ex 10(e)(1-6)(B)
|
10(g)
|
|
Lease
Agreement dated January 20, 1995 between OPCo and JMG Funding, Limited
Partnership, and amendment thereto (confidential treatment
requested).
|
|
OPCo
1994 Form 10-K, Ex 10(l)(2)
|
10(h)
|
|
Modification
No. 1 to the AEP System Interim Allowance Agreement, dated July 28, 1994,
among APCo, CSPCo, I&M, KPCo, OPCo and AEPSC.
|
|
1996
Form 10-K, Ex 10(l)
|
10(i)
|
|
Consent
Decree with U.S. District Court
|
|
Form
8-K, Item 8.01 dated October 9, 2007
|
†10(j)
|
|
AEP
Accident Coverage Insurance Plan for Drectors.
|
|
1985
Form 10-K, Ex 10(g)
|
†10(k)(1)
|
|
AEP
Retainer Deferral Plan for Non-Employee Directors, effective January 1,
2005, as amended February 9, 2007.
|
|
2006
Form 10-K, Ex 10(j)(i)
|
†10(k)(2)
|
|
AEP
Stock Unit Accumulation Plan for Non-Employee Directors, as
amended.
|
|
2003
Form 10-K, Ex 10(k)(2)
|
†10(k)(2)(A)
|
|
First
Amendment to AEP Stock Unit Accumulation Plan for Non-Employee Directors
dated as of February 9, 2007.
|
|
2006
Form 10-K, Ex 10(j)(2)(A)
|
†10(l)(1)(A)
|
|
AEP
System Excess Benefit Plan, Amended and Restated as of January 1,
2001.
|
|
2000
Form 10-K, Ex 10(j)(1)(A)
|
†10(l)(1)(B)
|
|
Guaranty
by AEP of AEPSC Excess Benefits Plan.
|
|
1990
Form 10-K, Ex 10(h)(1)(B)
|
†10(l)(1)(C)
|
|
First
Amendment to AEP System Excess Benefit Plan, dated as of March 5,
2003.
|
|
2002
Form 10-K, Ex 10(1)(1)(c)
|
†10(l)(2)
|
|
AEP
System Supplemental Retirement Savings Plan, Amended and Restated as of
January 1, 2005 (Non-Qualified), as amended December 28,
2006.
|
|
2006
Form 10-K, Ex 10(k)(2)
|
†10(l)(3)
|
|
Service
Corporation Umbrella Trust for Executives.
|
|
1993
Form 10-K, Ex 10(g)(3)
|
†10(m)(1)
|
|
Employment
Agreement between AEP, AEPSC and Michael G. Morris dated December 15,
2003.
|
|
2003
Form 10-K, Ex 10(m)(1)
|
†10(m)(2)
|
|
Memorandum
of agreement between Susan Tomasky and AEPSC dated January 3,
2001.
|
|
2000
Form 10-K, Ex 10(s)
|
†10(m)(3)
|
|
Letter
Agreement dated June 23, 2000 between AEPSC and Holly K.
Koeppel.
|
|
2002
Form 10-K, Ex 10(m)(3)(A)
|
†10(m)(4)
|
|
Employment
Agreement dated July 29, 1998 between AEPSC and Robert P.
Powers.
|
|
2002
Form 10-K, Ex 10(m)(4)
|
†10(m)(5)
|
|
Letter
Agreements dated June 4, 2004 and June 9, 2004 between AEPSC and Carl
English.
|
|
Form
10-Q, Ex 10(b), September 30, 2004
|
†10(m)(6)
|
|
Letter
Agreements dated June 14, 2004 and June 17, 2004 between AEPSC and John B.
Keane.
|
|
2006
Form 10-K, Ex 10(l)(6)
|
†10(n)
|
|
AEP
System Senior Officer Annual Incentive Compensation Plan, amended and
restated effective December 13, 2006.
|
|
Form
8-K, Ex 10.1 dated April 25, 2007
|
†10(o)(1)
|
|
AEP
System Survivor Benefit Plan, effective January 27, 1998.
|
|
Form
10-Q, Ex 10, September 30, 1998
|
†10(o)(2)
|
|
First
Amendment to AEP System Survivor Benefit Plan, as amended and restated
effective January 31, 2000.
|
|
2002
Form 10-K, Ex 10(o)(2)
|
†10(p)
|
|
AEP
System Incentive Compensation Deferral Plan Amended and Restated as of
January 1, 2005, as amended December 28, 2006.
|
|
2006
Form 10-K, Ex 10(o)l
|
†10(q)
|
|
AEP
System Nuclear Performance Long Term Incentive Compensation Plan dated
August 1, 1998.
|
|
2002
Form 10-K, Ex 10(r)
|
†10(r)
|
|
Nuclear
Key Contributor Retention Plan dated May 1, 2000.
|
|
2002
Form 10-K, Ex 10(s)
|
*†10(s)
|
|
AEP
Change In Control Agreement, effective January 1, 2008.
|
|
|
†10(t)(1)
|
|
Amended
and Restated AEP System Long-Term Incentive Plan.
|
|
Form
8-K, Item 1.01, dated April 26, 2005
|
*†10(t)(1)(A)
|
|
First
Amendment to Amended and Restated AEP System Long-Term Incentive
Plan.
|
|
|
†10(t)(2)
|
|
Form
of Performance Share Award Agreement furnished to participants of the AEP
System Long-Term Incentive Plan, as amended.
|
|
Form
10-Q, Ex 10(c), September 30, 2004
|
†10(t)(3)
|
|
Form
of Restricted Stock Unit Agreement furnished to participants of the AEP
System Long-Term Incentive Plan, as amended.
|
|
Form
10-Q, Ex 10(a), March 31, 2005
|
†10(t)(4)
|
|
AEP
System Stock Ownership Requirement Plan, (as Amended and Restated
Effective January 1, 2005), as amended December 28, 2006.
|
|
2006
Form 10-K, Ex 10(s)(4)
|
†10(u)(1)
|
|
Central
and South West System Special Executive Retirement Plan as amended and
restated effective July 1, 1997.
|
|
CSW
1998 Form 10-K, Ex 18, File No. 1-1443
|
†10(u)(2)
|
|
Certified
Board Resolutions of AEP Utilities, Inc. (formerly CSW) of July
16, 1996.
|
|
2003
Form 10-K, Ex 10(v)(3)
|
†10(u)(3)
|
|
Central
and South West Corporation Executive Deferred Savings Plan as amended and
restated effective as of January 1, 1997.
|
|
CSW
1998 Form 10-K, Ex 24, File No. 1-1443
|
*12
|
|
Statement
re: Computation of Ratios
|
|
|
*13
|
|
Copy
of those portions of the AEP 2006 Annual Report (for the fiscal year ended
December 31, 2006) which are incorporated by reference in this
filing.
|
|
|
*21
|
|
List
of subsidiaries of AEP.
|
|
|
*23
|
|
Consent
of Deloitte & Touche LLP.
|
|
|
*24
|
|
Power
of Attorney.
|
|
|
*31(a)
|
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
|
*31(b)
|
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
|
*32(a)
|
|
Certification
of Chief Executive Officer Pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code.
|
|
|
*32(b)
|
|
Certification
of Chief Financial Officer Pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code.
|
|
|
REGISTRANT:
APCo‡ File No. 1-3457
|
|
|
3(a)
|
|
Composite
of the Restated Articles of Incorporation of APCo, amended as of March 7,
1997.
|
|
1996
Form 10-K, Ex 3(d)
|
*3(b)
|
|
Composite
By-Laws of APCo, amended as of February 26, 2008.
|
|
|
4(a)
|
|
Indenture
(for unsecured debt securities), dated as of January 1, 1998, between APCo
and The Bank of New York, As Trustee.
|
|
Registration
Statement No. 333-45927, Ex 4(a)(b)
Registration
Statement No. 333-49071, Ex 4(b)
Registration
Statement No. 333-84061, Ex 4(b)(c)
Registration
Statement No. 333-100451, Ex 4(b)(c)(d)
Registration
Statement No. 333-116284, Ex 4(b)(c)
Registration
Statement No. 333-123348, Ex 4(b)(c)
Registration
Statement No. 333-136432, Ex 4(b)(c)(d)
|
4(b)
|
|
Company
Order and Officer’s Certificate to The Bank of New York, dated August 17,
2007 establishing terms of 5.65% Senior Notes Series O due 2012
and 6.70% Senior Notes Series P due 2037.
|
|
Form
8-K, Ex 4(a) dated August 17, 2007
|
10(a)(1)
|
|
Power
Agreement, dated October 15, 1952, between OVEC and United States of
America, acting by and through the United States Atomic Energy Commission,
and, subsequent to January 18, 1975, the Administrator of the Energy
Research and Development Administration, as amended.
|
|
Registration
Statement No. 2-60015, Ex 5(a)
Registration
Statement No. 2-63234, Ex 5(a)(1)(B) Registration Statement No 2-66301, Ex
5(a)(1)(C) Registration Statement No. 2-67728, Ex 5(a)(1)(D)
1989
Form 10-K, Ex 10(a)(1)(F)
1992
Form 10-K, Ex 10(a)(1)(B)
|
10(a)(2)
|
|
Inter-Company
Power Agreement, dated as of July 10, 1953, among OVEC and the Sponsoring
Companies, as amended March 13, 2006.
|
|
Registration
Statement No. 2-60015, Ex 5(c)
Registration
Statement No. 2-67728, Ex 5(a)(3)(B)
1992
Form 10-K, Ex 10(a)(2)(B)
2005
Form 10-K, Ex 10(a)(2)
|
10(a)(3)
|
|
Power
Agreement, dated July 10, 1953, between OVEC and Indiana-Kentucky Electric
Corporation, as amended.
|
|
Registration
Statement No. 2-60015, Ex 5(e)
|
10(b)
|
|
Interconnection
Agreement, dated July 6, 1951, among APCo, CSPCo, KPCo, OPCo and I&M
and with AEPSC, as amended.
|
|
Registration
Statement No. 2-52910, Ex 5(a)
Registration
Statement No. 2-61009, Ex 5(b)
AEP
1990 Form 10-K, Ex 10(a)(3), File No. 1-3525
|
10(c)
|
|
Transmission
Agreement, dated April 1, 1984, among APCo, CSPCo, I&M, KPCo, OPCo and
with AEPSC as agent, as amended.
|
|
AEP
1985 Form 10-K, Ex 10(b)
AEP
1988 Form 10-K, Ex 10(b)(2)
|
10(d)(1)
|
|
Amended
and Restated Operating Agreement of PJM and AEPSC on behalf of APCo,
CSPCo, I&M, KPCo, OPCo, Kingsport Power Company and Wheeling Power
Company.
|
|
2004
Form 10-K, Ex 10(d)(1)
|
10(d)(2)
|
|
PJM
West Reliability Assurance Agreement among Load Serving Entities in the
PJM West service area.
|
|
2004
Form 10-K, Ex 10(d)(2)
|
10(d)(3)
|
|
Master
Setoff and Netting Agreement among PJM and AEPSC on behalf of APCo, CSPCo,
I&M, KPCo, OPCo, Kingsport Power Company and Wheeling Power
Company.
|
|
2004
Form 10-K, Ex 10(d)(3)
|
10(e)
|
|
Modification
No. 1 to the AEP System Interim Allowance Agreement, dated July 28, 1994,
among APCo, CSPCo, I&M, KPCo, OPCo and AEPSC.
|
|
AEP
1996 Form 10-K, Ex 10(l), File No. 1-3525
|
10(f)
|
|
Consent
Decree with U.S. District Court
|
|
Form
8-K, Item 8.01 dated October 9, 2007
|
†10(g)
|
|
|
|
Form
8-K, Ex 10.1 dated April 25, 2007
|
†10(h)(1)(A)
|
|
AEP
System Excess Benefit Plan, Amended and Restated as of January 1,
2001.
|
|
AEP
2000 Form 10-K, Ex 10(j)(1)(A), File No. 1-3525
|
†10(h)(1)(B)
|
|
First
Amendment to AEP System Excess Benefit Plan, dated as of March 5,
2003.
|
|
2002
Form 10-K, Ex 10(h)(1)(B)
|
†10(h)(2)
|
|
AEP
System Supplemental Retirement Savings Plan, Amended and Restated as of
January 1, 2005 (Non-Qualified), as amended December 28,
2006.
|
|
2006
Form 10-K, Ex 10(g)(2)
|
†10(h)(3)
|
|
Umbrella
Trust for Executives.
|
|
AEP
1993 Form 10-K, Ex 10(g)(3), File No. 1-3525
|
†10(i)(1)
|
|
Employment
Agreement between AEP, AEPSC and Michael G. Morris dated December 15,
2003.
|
|
2003
Form 10-K, Ex 10(i)(1)
|
†10(i)(2)
|
|
Memorandum
of Agreement between Susan Tomasky and AEPSC dated January 3,
2001.
|
|
AEP
2000 Form 10-K, Ex 10(s), File No. 1-3525
|
†10(i)(3)
|
|
Employment
Agreement dated July 29, 1998 between AEPSC and Robert P.
Powers.
|
|
2002
Form 10-K, Ex 10(i)(3)
|
†10(i)(4)
|
|
Letter
Agreements dated June 4, 2004 and June 9, 2004 between AEPSC and Carl
English.
|
|
AEP
Form 10-Q, Ex 10(b), September 30, 2004
|
†10(i)(5)
|
|
Letter
Agreements dated June 14, 2004 and June 17, 2004 between AEPSC and John B.
Keane.
|
|
2006
Form 10-K, Ex 10(h)(5)
|
†10(j)(1)
|
|
AEP
System Survivor Benefit Plan, effective January 27, 1998.
|
|
AEP
Form 10-Q, Ex 10, September 30, 1998,
File
No. 1-3525
|
†10(i)(j)(2)
|
|
First
Amendment to AEP System Survivor Benefit Plan, as amended and restated
effective January 31, 2000.
|
|
2002
Form 10-K, Ex 10(j)(2)
|
*†10(k)
|
|
AEP
Change In Control Agreement, effective January 1, 2008.
|
|
|
†10(l)(1)
|
|
Amended
and Restated AEP System Long-Term Incentive Plan.
|
|
Form
8-K, Ex 10.1, dated April 26, 2005
|
*10(l)(1)(A)
|
|
First
Amendment to Amended and Restated AEP System Long-Term Incentive
Plan.
|
|
|
†10(l)(2)
|
|
Form
of Performance Share Award Agreement furnished to participants of the AEP
System Long-Term Incentive Plan, as amended.
|
|
AEP
Form 10-Q, Ex 10(c), dated November 5, 2004
|
†10(l)(3)
|
|
Form
of Restricted Stock Unit Agreement furnished to participants of the AEP
System Long-Term Incentive Plan, as amended.
|
|
AEP
Form 10-Q, Ex 10(a), March 31, 2005
|
†10(l)(4)
|
|
AEP
System Stock Ownership Requirement Plan, (as Amended and Restated
Effective January 1, 2005), as amended December 28, 2006
|
|
2006
Form 10-K, Ex 10(k)(4)
|
†10(m)(1)
|
|
Central
and South West System Special Executive Retirement Plan as amended and
restated effective July 1, 1997.
|
|
CSW
1998 Form 10-K, Ex 18, File No. 1-1443
|
†10(m)(2)
|
|
Certified
Board Resolutions of AEP Utilities, Inc. (formerly
CSW) of July 16, 1996.
|
|
2003
Form 10-K, Ex 10(n)(3)
|
†10(n)
|
|
AEP
System Incentive Compensation Deferral Plan Amended and Restated as of
January 1, 2005, as amended December 28, 2006.
|
|
2006
Form 10-K, Ex 10(m)
|
†10(o)
|
|
AEP
System Nuclear Performance Long Term Incentive Compensation Plan dated
August 1, 1998.
|
|
2002
Form 10-K, Ex 10(p)
|
†10(p)
|
|
Nuclear
Key Contributor Retention Plan dated May 1, 2000.
|
|
2002
Form 10-K, Ex 10(q)
|
*12
|
|
Statement
re: Computation of Ratios
|
|
|
*13
|
|
Copy
of those portions of the APCo 2007 Annual Report (for the fiscal year
ended December 31, 2007) which are incorporated by reference in this
filing.
|
|
|
21
|
|
List
of subsidiaries of APCo
|
|
AEP
2006 Form 10-K, Ex 21, File No. 1-3525
|
*23
|
|
Consent
of Deloitte & Touche LLP
|
|
|
*24
|
|
Power
of Attorney.
|
|
|
*31(a)
|
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
|
*31(b)
|
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
|
*32(a)
|
|
Certification
of Chief Executive Officer Pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code.
|
|
|
*32(b)
|
|
Certification
of Chief Financial Officer Pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code.
|
|
|
REGISTRANT:
CSPCo‡ File No. 1-2680
|
|
|
3(a)
|
|
Composite
of Amended Articles of Incorporation of CSPCo, dated May 19,
1994.
|
|
1994
Form 10-K, Ex 3(c)
|
3(b)
|
|
Code
of Regulations and By-Laws of CSPCo.
|
|
1987
Form 10-K, Ex 3(d)
|
4(a)
|
|
Indenture
(for unsecured debt securities), dated as of September 1, 1997, between
CSPCo and Bankers Trust Company, as Trustee.
|
|
Registration
Statement No. 333-54025, Ex 4(a)(b)(c)(d)
Registration
Statement No. 333-128174, Ex 4(b)(c)(d)
|
4(c)
|
|
Indenture
(for unsecured debt securities), dated as of February 1, 2003, between
CSPCo and Bank One, N.A., as Trustee.
|
|
Registration
Statement No. 333-128174, Ex 4(e)(f)(g)
|
4(b)
|
|
Company
Order and Officer’s Certificate to Deutsche Bank Trust Company Americas,
dated October 14, 2005, establishing terms of 5.85% senior Notes, Series
F, due 2035.
|
|
Form
8-K, Ex 4(a), dated October 14, 2005
|
10(a)(1)
|
|
Power
Agreement, dated October 15, 1952, between OVEC and United States of
America, acting by and through the United States Atomic Energy Commission,
and, subsequent to January 18, 1975, the Administrator of the Energy
Research and Development Administration, as amended.
|
|
Registration
Statement No. 2-60015, Ex 5(a)
Registration
Statement No. 2-63234, Ex 5(a)(1)(B)
Registration
Statement No. 2-66301, Ex 5(a)(1)(C)
Registration
Statement No. 2-67728, Ex 5(a)(1)(B)
APCo
1989 Form 10-K, Ex 10(a)(1)(F), File No. 1-3457
APCo
1992 Form 10-K, Ex 10(a)(1)(B), File No.1-3457
|
10(a)(2)
|
|
Inter-Company
Power Agreement, dated July 10, 1953, among OVEC and the Sponsoring
Companies, as amended March 13, 2006.
|
|
Registration
Statement No. 2-60015, Ex 5(c)
Registration
Statement No. 2-67728, Ex 5(a)(3)(B)
1992
Form 10-K, Ex 10(a)(2)
2005
Form 10-K, Ex 10(a)(2)
|
10(a)(3)
|
|
Power
Agreement, dated July 10, 1953, between OVEC and Indiana-Kentucky Electric
Corporation, as amended.
|
|
Registration
Statement No. 2-60015, Ex 5(e)
|
10(b)(1)
|
|
Interconnection
Agreement, dated July 6, 1951, among APCo, CSPCo, KPCo, OPCo and I&M
and AEPSC, as amended.
|
|
Registration
Statement No. 2-52910, Ex 5(a)
Registration
Statement No. 2-61009, Ex 5(b)
AEP
1990 Form 10-K, Ex 10(a)(3), File No. 1-3525
|
*10(b)(2)
|
|
Unit
Power Agreement, dated March 15, 2007 between AEGCo and
CSPCo.
|
|
|
10(c)
|
|
Transmission
Agreement, dated April 1, 1984, among APCo, CSPCo, I&M, KPCo, OPCo,
and with AEPSC as agent, as amended.
|
|
AEP
1985 Form 10-K, Ex 10(b), File No. 1-3525
AEP
1988 Form 10-K, Ex 10(b)(2) File No. 1-3525
|
10(d)(1)
|
|
Amended
and Restated Operating Agreement of PJM and AEPSC on behalf of APCo,
CSPCo, I&M, KPCo, OPCo, Kingsport Power Company and Wheeling Power
Company.
|
|
2004
Form 10-K, Ex 10(d)(1)
|
10(d)(2)
|
|
PJM
West Reliability Assurance Agreement among Load Serving Entities in the
PJM West service area.
|
|
2004
Form 10-K, Ex 10(d)(2)
|
10(d)(3)
|
|
Master
Setoff and Netting Agreement among PJM and AEPSC on behalf of APCo, CSPCo,
I&M, KPCo, OPCo, Kingsport Power Company and Wheeling Power
Company.
|
|
2004
Form 10-K, Ex 10(d)(3)
|
10(e)
|
|
Modification
No. 1 to the AEP System Interim Allowance Agreement, dated July 28, 1994,
among APCo, CSPCo, I&M, KPCo, OPCo and AEPSC.
|
|
AEP
1996 Form 10-K, Ex 10(l), File No. 1-3525
|
10(f)
|
|
Consent
Decree with U.S. District Court
|
|
Form
8-K, Item 8.01 dated October 9, 2007
|
*12
|
|
Statement
re: Computation of Ratios
|
|
|
*13
|
|
Copy
of those portions of the CSPCo 2007 Annual Report (for the fiscal year
ended December 31, 2007) which are incorporated by reference in this
filing.
|
|
|
21
|
|
List
of subsidiaries of CSPCo
|
|
AEP
2006 Form 10-K, Ex 21, File No. 1-3525
|
*23
|
|
Consent
of Deloitte & Touche LLP
|
|
|
*24
|
|
Power
of Attorney
|
|
|
*31(a)
|
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
|
*31(b)
|
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
|
*32(a)
|
|
Certification
of Chief Executive Officer Pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code.
|
|
|
*32(b)
|
|
Certification
of Chief Financial Officer Pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code.
|
|
|
REGISTRANT:
I&M‡ File No. 1-3570
|
|
|
3(a)
|
|
Composite
of the Amended Articles of Acceptance of I&M, dated of March 7,
1997.
|
|
1996
Form 10-K, Ex 3(c)
|
*3(b)
|
|
Composite
By-Laws of I&M, amended as of February 26, 2008.
|
|
|
4(a)
|
|
Indenture
(for unsecured debt securities), dated as of October 1, 1998, between
I&M and The Bank of New York, as Trustee.
|
|
Registration
Statement No. 333-88523, Ex 4(a)(b)(c)
Registration
Statement No. 333-58656, Ex 4(b)(c)
Registration
Statement No. 333-108975, Ex 4(b)(c)(d)
Registration
Statement No. 333-136538, Ex 4(b)(c)
|
4(b)
|
|
Company
Order and Officer’s Certificate to The Bank of New York, dated November
14, 2006, establishing terms of 6.05% Senior Notes, Series H, due
2037.
|
|
Form
8-K, Ex 4(a), dated November 14, 2006
|
10(a)(1)
|
|
Power
Agreement, dated October 15, 1952, between OVEC and United States of
America, acting by and through the United States Atomic Energy Commission,
and, subsequent to January 18, 1975, the Administrator of the Energy
Research and Development Administration, as amended.
|
|
Registration
Statement No. 2-60015, Ex 5(a)
Registration
Statement No. 2-63234, Ex 5(a)(1)(B)
Registration
Statement No. 2-66301, Ex 5(a)(1)(C)
Registration
Statement No. 2-67728, Ex 5(a)(1)(D)
APCo
1989 Form 10-K, Ex 10(a)(1)(F), File No. 1-3457
APCo
1992 Form 10-K, Ex 10(a)(1)(B), File No. 1-3457
|
10(a)(2)
|
|
Inter-Company
Power Agreement, dated as of July 10, 1953, among OVEC and the Sponsoring
Companies, as amended, March 13, 2006.
|
|
Registration
Statement No. 2-60015, Ex 5(c)
Registration
Statement No. 2-67728, Ex 5(a)(3)(B)
1992
Form 10-K, Ex 10(a)(2)
2005
Form 10-K, Ex 10(a)(2)
|
10(a)(3)
|
|
Power
Agreement, dated July 10, 1953, between OVEC and Indiana-Kentucky Electric
Corporation, as amended
|
|
Registration
Statement No. 2-60015, Ex 5(e)
|
10(a)(4)
|
|
Inter-Company
Power Agreement, dated as of July 10, 1953, among OVEC and the Sponsoring
Companies, as amended.
|
|
Registration
Statement No. 2-60015, Ex 5(c)
Registration
Statement No. 2-67728, Ex 5(a)(3)(B)
APCo
1992 Form 10-K, Ex 10(a)(2)(B), File No. 1-3457
|
10(b)(1)
|
|
Interconnection
Agreement, dated July 6, 1951, among APCo, CSPCo, KPCo, I&M, and OPCo
and with AEPSC, as amended.
|
|
Registration
Statement No. 2-52910, Ex 5(a)
Registration
Statement No. 2-61009, Ex 5(b)
AEP
1990 Form 10-K, Ex 10(a)(3), File No. 1-3525
|
10(b)(2)
|
|
Unit
Power Agreement dated as of March 31, 1982 between AEGCo and I&M, as
amended.
|
|
Registration
Statement No. 33-32752, Ex 28(b)(1)(A)(B)
|
10(c)
|
|
Transmission
Agreement, dated April 1, 1984, among APCo, CSPCo, I&M, KPCo, OPCo and
with AEPSC as agent, as amended.
|
|
AEP
1985 Form 10-KEx 10(b), File No. 1-3525
AEP
1988 Form 10-K, File No. 1-3525, Ex 10(b)(2)
|
10(d)(1)
|
|
Amended
and Restated Operating Agreement of PJM and AEPSC on behalf of APCo,
CSPCo, I&M, KPCo, OPCo, Kingsport Power Company and Wheeling Power
Company.
|
|
2004
Form 10-K, Ex 10(d)(1)
|
10(d)(2)
|
|
PJM
West Reliability Assurance Agreement among Load Serving Entities in the
PJM West service area.
|
|
2004
Form 10-K, Ex 10(d)(2)
|
10(d)(3)
|
|
Master
Setoff and Netting Agreement among PJM and AEPSC on behalf of APCo, CSPCo,
I&M, KPCo, OPCo, Kingsport Power Company and Wheeling Power
Company.
|
|
2004
Form 10-K, Ex 10(d)(3)
|
10(e)
|
|
Modification
No. 1 to the AEP System Interim Allowance Agreement, dated July 28, 1994,
among APCo, CSPCo, I&M, KPCo, OPCo and AEPSC.
|
|
AEP
1996 Form 10-K, Ex 10(l), File No. 1-3525
|
10(f)
|
|
Consent
Decree with U.S. District Court
|
|
Form
8-K, Item 8.01 dated October 9, 2007
|
10(g)
|
|
Lease
Agreements, dated as of December 1, 1989, between I&M and Wilmington
Trust Company, as amended.
|
|
Registration
Statement No. 33-32753, Ex 28(a)(1-6)(C)
1993
Form 10-K, Ex 10(e)(1-6)(B)
|
*12
|
|
Statement
re: Computation of Ratios
|
|
|
*13
|
|
Copy
of those portions of the I&M 2007 Annual Report (for the fiscal year
ended December 31, 2007) which are incorporated by reference in this
filing.
|
|
|
21
|
|
List
of subsidiaries of I&M
|
|
AEP
2006 Form 10-K, Ex 21, File No. 1-3525
|
*23
|
|
Consent
of Deloitte & Touche LLP
|
|
|
*24
|
|
Power
of Attorney
|
|
|
*31(a)
|
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
|
*31(b)
|
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
|
*32(a)
|
|
Certification
of Chief Executive Officer Pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code.
|
|
|
*32(b)
|
|
Certification
of Chief Financial Officer Pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code.
|
|
|
REGISTRANT:
OPCo‡ File No.1-6543
|
|
|
3(a)
|
|
Composite
of the Amended Articles of Incorporation of OPCo, dated June 3,
2002.
|
|
Form
10-Q, Ex 3(e), June 30, 2002
|
3(b)
|
|
Code
of Regulations of OPCo.
|
|
1990
Form 10-K, Ex 3(d)
|
4(a)
|
|
Indenture
(for unsecured debt securities), dated as of September 1, 1997, between
OPCo and Bankers Trust Company (now Deutsche Bank Trust Company Americas),
as Trustee.
|
|
Registration
Statement No. 333-49595, Ex 4(a)(b)(c)
Registration
Statement No. 333-106242, Ex 4(b)(c)(d)
Registration
Statement No. 333-75783, Ex 4(b)(c)
Registration
Statement No. 333-127913, Ex 4(b)(c)
Registration
Statement No. 333-139802, Ex 4(a)(b)(c)
|
4(b)
|
|
Company
Order and Officer’s Certificate to Deutsche Bank Trust Company Americas,
dated April 5, 2007, establishing terms of Floating Rate Notes, Series
B.
|
|
Form
8-K, Ex 4(a) dated April 5, 2007
|
4(c)
|
|
Indenture
(for unsecured debt securities), dated as of February 1, 2003, between
OPCo and Bank One, N.A., as Trustee.
|
|
Registration
Statement No. 333-127913, Ex 4(d)(e)(f)
|
10(a)(1)
|
|
Power
Agreement, dated October 15, 1952, between OVEC and United States of
America, acting by and through the United States Atomic Energy Commission,
and, subsequent to January 18, 1975, the Administrator of the Energy
Research and Development Administration, as amended.
|
|
Registration
Statement No. 2-60015, Ex 5(a)
Registration
Statement No. 2-63234, Ex 5(a)(1)(B)
Registration
Statement No. 2-66301, Ex 5(a)(1)(C)
Registration
Statement No. 2-67728, Ex 5(a)(1)(D)
APCo
Form 10-K, Ex 10(a)(1)(F), File No. 1-3457
APCo
Form 10-K, Ex 10(a)(1)(B), File No. 1-3457
|
10(a)(2)
|
|
Inter-Company
Power Agreement, dated July 10, 1953, among OVEC and the Sponsoring
Companies, as amended, March 13, 2006.
|
|
Registration
Statement No. 2-60015, Ex 5(c)
Registration
Statement No. 2-67728, Ex 5(a)(3)(B)
Form
10-K, Ex 10(a)(2)
Form
10-K, Ex 10(a)(2)
|
10(a)(3)
|
|
Power
Agreement, dated July 10, 1953, between OVEC and Indiana-Kentucky Electric
Corporation, as amended.
|
|
Registration
Statement No. 2-60015, Ex 5(e)
|
10(b)
|
|
Interconnection
Agreement, dated July 6, 1951, among APCo, CSPCo, KPCo, I&M and OPCo
and with AEPSC, as amended.
|
|
Registration
Statement No. 2-52910, Ex 5(a)
Registration
Statement No. 2-61009, Ex 5(b)
AEP
1990 Form 10-K, Ex 10(a)(3), File 1-3525
|
10(c)
|
|
Transmission
Agreement, dated April 1, 1984, among APCo, CSPCo, I&M, KPCo, OPCo and
with AEPSC as agent.
|
|
AEP
1985 Form 10-K, Ex 10(b), File No. 1-3525
AEP
1988 Form 10-K, Ex 10(b)(2), File No. 1-3525
|
10(d)(1)
|
|
Amended
and Restated Operating Agreement of PJM and AEPSC on behalf of APCo,
CSPCo, I&M, KPCo, OPCo, Kingsport Power Company and Wheeling Power
Company.
|
|
2004
Form 10-K, Ex 10(d)(1)
|
10(d)(2)
|
|
PJM
West Reliability Assurance Agreement among Load Serving Entities in the
PJM West service area.
|
|
2004
Form 10-K, Ex 10(d)(2)
|
10(d)(3)
|
|
Master
Setoff and Netting Agreement among PJM and AEPSC on behalf of APCo, CSPCo,
I&M, KPCo, OPCo, Kingsport Power Company and Wheeling Power
Company.
|
|
2004
Form 10-K, Ex 10(d)(3)
|
10(e)
|
|
Modification
No. 1 to the AEP System Interim Allowance Agreement, dated July 28, 1994,
among APCo, CSPCo, I&M, KPCo, OPCo and AEPSC.
|
|
AEP
1996 Form 10-K, Ex 10(l), File No. 1-3525
|
10(f)
|
|
Consent
Decree with U.S. District Court
|
|
Form
8-K, Item 8.01 dated October 9, 2007
|
10(g)(1)
|
|
Amendment
No. 1, dated October 1, 1973, to Station Agreement dated January 1, 1968,
among OPCo, Buckeye and Cardinal Operating Company, and amendments
thereto.
|
|
1993
Form 10-K, Ex 10(f)
2003
Form 10-K, Ex 10(e)
|
10(g)(2)
|
|
Amendment
No. 9, dated July 1, 2003, to Station Agreement dated January 1, 1968,
among OPCo, Buckeye and Cardinal Operating Company, and amendments
thereto.
|
|
Form
10-Q, Ex 10(a), September 30, 2004
|
10(h)
|
|
Lease
Agreement dated January 20, 1995 between OPCo and JMG Funding, Limited
Partnership, and amendment thereto (confidential treatment
requested).
|
|
1994
Form 10-K, Ex 10(l)(2)
|
†10(i)
|
|
AEP
System Senior Officer Annual Incentive Compensation Plan amended and
restated effective December 13, 2006.
|
|
Form
8-K, Ex 10.1 dated April 25, 2007
|
†10(j)(1)(A)
|
|
AEP
System Excess Benefit Plan, Amended and Restated as of January 1,
2001.
|
|
AEP
2000 Form 10-K, Ex 10(j)(1)(A), File No. 1-3525
|
†10(j)(1)(B)
|
|
First
Amendment to AEP System Excess Benefit Plan, dated as of March 5,
2003.
|
|
2002
Form 10-K, Ex 10(i)(1)(B)
|
†10(j)(2)
|
|
AEP
System Supplemental Retirement Savings Plan, Amended and Restated as of
January 1, 2005 (Non-Qualified), as amended December 28,
2006.
|
|
2006
Form 10-K, Ex 10(i)(2)
|
†10(j)(3)
|
|
Umbrella
Trust for Executives
|
|
AEP
1993 Form 10-K, Ex 10(g)(3), File No. 1-3525
|
†10(k)(1)
|
|
Employment
Agreement between AEP, AEPSC and Michael G. Morris dated December 15,
2003.
|
|
2003
Form 10-K, Ex 10(j)(1)
|
†10(k)(2)
|
|
Memorandum
of agreement between Susan Tomasky and AEPSC dated January 3,
2001.
|
|
AEP
2000 Form 10-K, Ex 10(s), File No. 1-3525
|
†10(k)(3)
|
|
Employment
Agreement dated July 29, 1998 between AEPSC and Robert P.
Powers.
|
|
2002
Form 10-K, Ex 10(j)(3)
|
†10(k)(4)
|
|
Letter
Agreements dated June 4, 2004 and June 9, 2004 between AEPSC
and Carl English
|
|
AEP
Form 10-Q, Ex 10(b), September 30, 2004, File No.
1-3525
|
†10(k)(5)
|
|
Letter
Agreements dated June 14, 2004 and June 17, 2004 between AEPSC and John B.
Keane
|
|
2006
Form 10-K, Ex 10(j)(5)
|
†10(l)(1)
|
|
AEP
System Survivor Benefit Plan, effective January 27, 1998.
|
|
AEP
Form 10-Q, Ex 10, September 30, 1998, File No. 1-3525
|
†10(l)(2)
|
|
First
Amendment to AEP System Survivor Benefit Plan, as amended and restated
effective January 31, 2000.
|
|
2002
Form 10-K, Ex 10(k)(2)
|
*†10(m)
|
|
AEP
Change In Control Agreement, effective January 1, 2008.
|
|
|
†10(n)(1)
|
|
Amended
and Restated AEP System Long-Term Incentive Plan.
|
|
Form
8-K, Ex 10.1, dated April 26, 2005
|
*10(n)(1)(A)
|
|
First
Amendment to Amended and Restated AEP System Long-Term Incentive
Plan.
|
|
|
†10(n)(2)
|
|
Form
of Performance Share Award Agreement furnished to participants of the AEP
System Long-Term Incentive Plan, as amended
|
|
AEP
Form 10-Q, Ex 10(c), dated November 5, 2004,
File
No. 1-3525
|
†10(n)(3)
|
|
Form
of Restricted Stock Unit Agreement furnished to participants of the AEP
System Long-Term Incentive Plan, as amended.
|
|
Form
10-Q, Ex 10(a), March 31, 2005
|
†10(n)(4)
|
|
AEP
System Stock Ownership Requirement Plan, (as Amended and Restated
Effective January 1, 2005), as amended December 28, 2006
|
|
2006
Form 10-K, Ex 10(m)(4)
|
†10(o)(1)
|
|
Central
and South West System Special Executive Retirement Plan as amended and
restated effective July 1, 1997.
|
|
CSW
1998 Form 10-K, Ex 18, File No. 1-1443
|
†10(o)(2)
|
|
Certified
Board Resolutions of AEP Utilities, Inc. (formerly CSW) of July
16, 1996.
|
|
2003
Form 10-K, Ex 10(o)(3)
|
†10(p)
|
|
AEP
System Incentive Compensation Deferral Plan Amended and Restated as of
January 1, 2005, as amended December 28, 2006.
|
|
2006
Form 10-K, Ex 10(o)
|
†10(q)
|
|
AEP
System Nuclear Performance Long Term Incentive Compensation Plan dated
August 1, 1998.
|
|
2002
Form 10-K, Ex 10(q)
|
†10(r)
|
|
Nuclear
Key Contributor Retention Plan dated May 1, 2000.
|
|
2002
Form 10-K, Ex 10(r)
|
*12
|
|
Statement
re: Computation of Ratios
|
|
|
*13
|
|
Copy
of those portions of the OPCo 2007 Annual Report (for the fiscal year
ended December 31, 2007) which are incorporated by reference in this
filing.
|
|
|
21
|
|
List
of subsidiaries of OPCo
|
|
AEP
2006 Form 10-K, Ex 21, File No. 1-3525
|
*23
|
|
Consent
of Deloitte & Touche LLP
|
|
|
*24
|
|
Power
of Attorney
|
|
|
*31(a)
|
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
|
*31(b)
|
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
|
*32(a)
|
|
Certification
of Chief Executive Officer Pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code.
|
|
|
*32(b)
|
|
Certification
of Chief Financial Officer Pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code.
|
|
|
REGISTRANT:
PSO‡ File No. 0-343
|
|
|
3(a)
|
|
Restated
Certificate of Incorporation of PSO.
|
|
CSW
1996 Form U5S, Ex B-3.1, File No. 1-1443
|
*3(b)
|
|
Composite
By-Laws of PSO amended as of February 26, 2008.
|
|
|
4(a)
|
|
Indenture
(for unsecured debt securities), dated as of November 1, 2000, between PSO
and The Bank of New York, as Trustee.
|
|
Registration
Statement No. 333-100623, Ex 4(a)(b)
Registration
Statement No. 333-114665, Ex 4(b)(c)
Registration
Statement No. 333-133548, Ex 4(b)(c)
|
4(b)
|
|
Sixth
Supplemental Indenture, dated as of August 10, 2006 between PSO and The
Bank of New York, as Trustee, establishing terms of the 6.15% Senior
Notes, Series F, due 2016.
|
|
Form
8-K, Ex 4(a), dated August 11, 2006
|
4(c)
|
|
Seventh
Supplemental Indenture, dated as of November 14, 2007 between PSO and The
Bank of New York, as Trustee, establishing terms of the 6.625% Senior
Notes, Series G, due 2037.
|
|
Form
8-K, Ex 4(a), dated November 14, 2007
|
10(a)
|
|
Restated
and Amended Operating Agreement, among PSO, SWEPCo and AEPSC, Issued on
February 10, 2006, Effective May 1, 2006.
|
|
2002
Form 10-K, Ex 10(a)
Form
10-Q, Ex 10(a), March 31, 2006
|
10(b)
|
|
Transmission
Coordination Agreement, dated October 29, 1998, among PSO, TCC, TNC,
SWEPCo and AEPSC.
|
|
2002
Form 10-K, Ex 10(b)
|
*12
|
|
Statement
re: Computation of Ratios
|
|
|
*13
|
|
Copy
of those portions of the PSO 2007 Annual Report (for the fiscal year ended
December 31, 2007) which are incorporated by reference in this
filing.
|
|
|
21
|
|
List
of subsidiaries of PSO
|
|
AEP
2006 Form 10-K, Ex 21, File No. 1-3525
|
*23
|
|
Consent
of Deloitte & Touche LLP
|
|
|
*24
|
|
Power
of Attorney
|
|
|
*31(a)
|
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
|
*31(b)
|
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
|
*32(a)
|
|
Certification
of Chief Executive Officer Pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code.
|
|
|
*32(b)
|
|
Certification
of Chief Financial Officer Pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code.
|
|
|
REGISTRANT:
SWEPCo‡ File No. 1-3146
|
|
|
3(a)
|
|
Restated
Certificate of Incorporation, as amended through May 6, 1997, including
Certificate of Amendment of Restated Certificate of
Incorporation.
|
|
Form
10-Q, Ex 3.4, March 31, 1997
|
*3(b)
|
|
Composite
By-Laws of SWEPCo amended as of February 26, 2008.
|
|
.
|
4(b)
|
|
SWEPCO-obligated,
mandatorily redeemable preferred securities of subsidiary trust holding
solely Junior Subordinated Debentures of SWEPCo:
(1) Subordinated
Indenture, dated as of September 1, 2003, between SWEPCo and the Bank of
New York, as Trustee.
(2) Amended
and Restated Trust Agreement of SWEPCo Capital Trust I, dated as of
September 1, 2003, among SWEPCo, as Depositor, the Bank of New York, as
Property Trustee, The Bank of New York (Delaware), as Delaware Trustee,
and the Administrative Trustees.
(3) Guarantee
Agreement, dated as of September 1, 2003, delivered by SWEPCo for the
benefit of the holders of SWEPCo Capital Trust I’s Preferred
Securities.
(4) First
Supplemental Indenture dated as of October 1, 2003, providing for the
issuance of Series B Junior Subordinated Debentures between SWEPCo, as
Issuer and the Bank of New York, as Trustee
(5) Agreement
as to Expenses and Liabilities, dated as of October 1, 2003 between SWEPCo
and SWEPCo Capital Trust I (included in Item (4) above as Ex
4(f)(i)(A).
|
|
Registration
Statement No. 333-145669,
Ex
4(b)(1), 4(b)(2), 4(b)(3), 4(b)(4), 4(b)(5)
|
4(c)
|
|
Indenture
(for unsecured debt securities), dated as of February 4, 2000, between
SWEPCo and The Bank of New York, as Trustee.
|
|
Registration
Statement No. 333-96213
Registration
Statement No. 333-87834, Ex 4(a)(b)
Registration
Statement No. 333-100632, Ex 4(b)
Registration
Statement No. 333-108045, Ex 4(b)
Registration
Statement No. 333-145669, Ex 4(c)(d)
|
4(e)
|
|
Sixth
Supplemental Indenture, dated as of December 4, 2007 between SWEPCo and
The Bank of New York, as Trustee, establishing terms of 5.875% Senior
Notes, Series F, due 2018.
|
|
Form
8-K, Ex 4(a), dated December 4, 2007
|
10(a)
|
|
Restated
and Amended Operating Agreement, among PSO, TCC, TNC, SWEPCo and AEPSC,
Issued on February 10, 2006, Effective May 1, 2006..
|
|
2002
Form 10-K, Ex 10(a)
Form
10-Q, Ex 10(a), March 31, 2006
|
10(b)
|
|
Transmission
Coordination Agreement, dated October 29, 1998, among PSO, TCC, TNC,
SWEPCo and AEPSC.
|
|
2002
Form 10-K, Ex 10(b)
|
*12
|
|
Statement
re: Computation of Ratios
|
|
|
*13
|
|
Copy
of those portions of the SWEPCo 2007 Annual Report (for the fiscal year
ended December 31, 2007) which are incorporated by reference in this
filing.
|
|
|
21
|
|
List
of subsidiaries of SWEPCo
|
|
AEP
2006 Form 10-K, Ex 21, File No. 1-3525
|
*23
|
|
Consent
of Deloitte & Touche LLP
|
|
|
*24
|
|
Power
of Attorney
|
|
|
*31(a)
|
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
|
*31(b)
|
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
|
*32(a)
|
|
Certification
of Chief Executive Officer Pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code.
|
|
|
*32(b)
|
|
Certification
of Chief Financial Officer Pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code.
|
|
|
_______________
|
‡
Certain instruments defining the rights of holders of long-term debt of
the registrants included in the financial statements of registrants filed
herewith have been omitted because the total amount of securities
authorized thereunder does not exceed 10% of the total assets of
registrants. The registrants hereby agree to furnish a copy of
any such omitted instrument to the SEC upon
request.
|