Unassociated Document
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of report (Date of earliest event reported)
|
March
18, 2009
|
AMERICAN
ELECTRIC POWER COMPANY, INC.
|
(Exact
Name of Registrant as Specified in Its Charter)
1-3525
|
New
York
|
13-4922640
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(Commission
File Number)
|
(State
or Other Jurisdiction of Incorporation)
|
(IRS
Employer Identification No.)
|
COLUMBUS
SOUTHERN POWER COMPANY
|
(Exact
Name of Registrant as Specified in Its Charter)
1-2680
|
Ohio
|
31-4154203
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(Commission
File Number)
|
(State
or Other Jurisdiction of Incorporation)
|
(IRS
Employer Identification No.)
|
(Exact
Name of Registrant as Specified in Its Charter)
1-6543
|
Ohio
|
31-4271000
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(Commission
File Number)
|
(State
or Other Jurisdiction of Incorporation)
|
(IRS
Employer Identification No.)
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1
Riverside Plaza, Columbus, OH
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43215
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (see General Instruction
A.2. below):
[
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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[
]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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[
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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See
discussions of Ohio rate matters beginning on pages A-78 and H-17 of the Annual
Report on Form 10-K for the year ended December 31, 2008.
On March
18, 2009, The Public Utilities Commission of Ohio (“PUCO”) issued an order that
modified and approved Columbus Southern Power Company’s (CSPCo’s) and Ohio Power
Company’s (OPCo’s) (collectively, the Companies) Electric Security Plans (ESPs)
(the “Order”). If accepted by the Companies, the ESPs would be in effect through
2011. The Order authorized increases to customers’ rates during the
ESP period. The PUCO capped the overall bill increases, including the FAC
referred to below, for CSPCo to 7% in 2009, 6% in 2010 and 6% in 2011, and for
OPCo to 8% in 2009, 7% in 2010 and 8% in 2011. The Order provided that 2009
rates would be effective as of January 1, 2009, and that the Companies may,
after final PUCO review and approval, collect the 2009 revenues over the
remainder of 2009. These revenue percentage increases are projected to result in
increased revenues of approximately $116 million, $109 million and $116 million
for CSPCo and approximately $130 million, $125 million and $153 million for OPCo
for the years ending December 31, 2009, 2010 and 2011,
respectively.
The Order
provides a fuel adjustment clause (FAC) for the three-year period of the ESP
that allows the Companies to pass through to customers actual fuel costs
incurred, along with purchased power and related expenses that will be trued-up,
subject to the annual caps described above and to annual prudency and accounting
review. The Order also allows the Companies to defer unrecovered fuel expenses
resulting from the annual caps and to accrue carrying charges on such deferrals
at the Companies’ weighted average cost of capital. Any deferred fuel balance at
the end of the ESP period would be recovered through a non-bypassable surcharge
over the period 2012 through 2018. The quarterly deferred FAC balances for 2009
are expected to be material. The PUCO rejected a proposal by several
intervenors to offset the FAC costs with a credit for off-system sales
margins.
Additionally,
the Order addressed several other items, including:
·
|
Approved
new distribution riders, subject to true-up for recovery of costs for
enhanced vegetation management programs and gridSMART. The PUCO
ordered the Companies to mitigate the costs of gridSMART by seeking
matching funds under the American Recovery and Reinvestment Act of 2009.
The PUCO denied the other distribution system reliability programs
proposed by the Companies as part of the ESP filing and decided those
requests would need to be examined in the context of a complete
distribution rate case.
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·
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Approved
the Companies’ request to recover the incremental carrying costs that will
be incurred after January 1, 2009 for environmental investments made from
2001 through 2008 that are not reflected in existing
rates.
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·
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Approved
90% of the Companies’ request for a Provider of Last Resort charge to
compensate for the risk of customers changing electric
suppliers.
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·
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Found
that the Companies’ shareholders should fund a minimum of $15 million in
costs over the ESP period for low-income, at-risk customer
programs. This funding obligation will be recognized as a
liability and an adjustment to reported earnings for the three month
period ending March 31, 2009.
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·
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Ordered
that the Companies’ request for recovery of certain existing regulatory
assets, including customer choice implementation as part of the ESPs,
would be more appropriately considered in the context of the Companies’
next distribution rate case. These assets total $56 million for
CSPCo and $38 million for OPCo as of February 28,
2009.
|
·
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Allowed
the Companies to request, through an annual filing, future recovery of
carrying charges on environmental expenditures incurred beginning in
2009.
|
Finally,
consistent with its decisions on ESP orders of other companies, the PUCO ordered
that it will establish a proceeding to examine the methodology for the
Significantly Excessive Earnings Test (SEET) that will be applicable to all
electric utilities in Ohio. However, the PUCO decided that the Companies’ SEET
would exclude off-system sales margins and FAC deferrals and related
expenses. The PUCO’s review of the Companies’ 2009 earnings is not
expected until the third quarter of 2010.
The
Companies intend to file a motion requesting rehearing of certain elements of
the Order, and the Companies also expect intervenors to file motions for
rehearing.
This
report made by AEP, CSPCo and OPCo contains forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of
1934. Although AEP believes that its expectations are based on
reasonable assumptions, any such statements may be influenced by factors that
could cause actual outcomes and results to be materially different from those
projected. Among the factors that could cause actual results to
differ materially from those in the forward-looking statements are: economic
climate and growth in, or contraction within, AEP service territories and
changes in market demand and demographic patterns; inflationary or deflationary
interest rate trends; volatility in the financial markets, particularly
developments affecting the availability of capital on reasonable terms and
developments impairing the ability to finance new capital projects and refinance
existing debt at attractive rates; the availability and cost of funds to finance
working capital and capital needs, particularly during periods when the time lag
between incurring costs and recovery is long and the costs are material;
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 AEP generating plants
including the ability to restore Cook Plant Unit 1 in a timely manner; the
ability to recover regulatory assets and stranded costs in connection with
deregulation; the ability to recover increases in fuel and other energy costs
through regulated or competitive electric rates; the ability to build or acquire
generating capacity and transmission line facilities (including the ability to
obtain any necessary regulatory or siting approvals and permits) when needed at
acceptable prices and terms and to recover those costs (including the costs of
projects that are cancelled) 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) the ability to
constrain operation and maintenance costs; the 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 AEP has contractual arrangements, including
participants in the energy trading markets; 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 implementation of the
recently passed utility law in Ohio and the allocation of costs within RTOs,
including PJM and SPP; 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 the pension, other
postretirement benefit plans and nuclear decommissioning trust and the impact on
future funding requirements; prices for power to 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.
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, each Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
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AMERICAN
ELECTRIC POWER COMPANY, INC.
|
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COLUMBUS
SOUTHERN POWER COMPANY
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OHIO
POWER COMPANY
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By:
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/s/
Joseph M. Buonaiuto
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Name:
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Joseph
M. Buonaiuto
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March 24,
2009