U-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM U-1

                           APPLICATION OR DECLARATION
                                      under
                 The Public Utility Holding Company Act of 1935

                               GULF POWER COMPANY
                                One Energy Place
                            Pensacola, Florida 32520

               (Name of company or companies filing this statement
                  and addresses of principal executive offices)

                              THE SOUTHERN COMPANY

 (Name of top registered holding company parent of each applicant or declarant)

                                 Warren E. Tate
                     Vice President, Secretary and Treasurer
                               Gulf Power Company
                                One Energy Place
                            Pensacola, Florida 32520
                     (Name and address of agent for service)

  The Commission is requested to mail signed copies of all orders, notices and
             communications to the above agent for service and to:


        Gale E. Klappa                               John D. McLanahan, Esq.
Executive Vice President, Chief                       Troutman Sanders LLP
Financial Officer and Treasurer                    600 Peachtree Street, N.E.
     The Southern Company                                  Suite 5200
  270 Peachtree Street, N.W.                       Atlanta, Georgia 30308-2216
    Atlanta, Georgia 30303









                              INFORMATION REQUIRED

Item 1.       Description of Proposed Transactions.

              1.1 Gulf Power Company ("Gulf") is a wholly-owned subsidiary of
The Southern Company ("Southern"), a registered holding company under the Public
Utility Holding Company Act of 1935, as amended (the "Act").

              Gulf proposes to incur, from time to time or at any time on or
before March 31, 2006, obligations in connection with the issuance and sale by
public instrumentalities of one or more series of pollution control revenue
bonds in an aggregate principal amount of up to $180,000,000.

              Gulf further proposes to issue and sell, from time to time or at
any time on or before March 31, 2006, one or more series of its senior
debentures, senior promissory notes or other senior debt instruments
(individually a "Senior Note" and collectively the "Senior Notes"), one or more
series of its first mortgage bonds and one or more series of its preferred stock
in an aggregate amount of up to $450,000,000 in any combination of issuance.

              1.2 Each issue of the proposed pollution control revenue bonds
will be issued for the financing or refinancing of the costs of certain air and
water pollution control facilities and sewage and solid waste disposal
facilities at one or more of Gulf's electric generating plants or other
facilities located in various counties. It is proposed that each such county or
the otherwise appropriate public body or instrumentality (the "County") will
issue its revenue bonds (the "Revenue Bonds") to finance or refinance the costs
of the acquisition, construction, installation and equipping of said facilities
at the plant or other facility located in its jurisdiction (the "Project"). Each


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County is authorized by relevant state law to issue its Revenue Bonds for such
purposes.

              While the actual amount of Revenue Bonds to be issued by each
County has not yet been determined, such amount will be based upon the cost of
refunding outstanding bonds or the cost of the Project located in its
jurisdiction.

              Gulf proposes to enter into a Loan or Installment Sale Agreement
with the County, substantially in the form of Exhibit B-1 hereto, relating to
each issue of the Revenue Bonds (the "Agreement"). Under the Agreement, the
County will loan to Gulf the proceeds of the sale of the County's Revenue Bonds,
and Gulf may issue a non-negotiable promissory note therefor (the "Note"), or
the County will undertake to purchase and sell the related Project to Gulf. The
installment sale structure may be used because it is required by applicable
state law or to the extent it affords transactional advantages to Gulf. Such
proceeds will be deposited with a Trustee (the "Trustee") under an indenture to
be entered into between the County and such Trustee (the "Trust Indenture"),
pursuant to which such Revenue Bonds are to be issued and secured, and will be
applied by Gulf to payment of the Cost of Construction (as defined in the
Agreement) of the Project or to refund outstanding pollution control revenue
obligations.

              The Note or the Agreement will provide for payments to be made by
Gulf at times and in amounts which shall correspond to the payments with respect
to the principal of, premium, if any, and interest on the related Revenue Bonds
whenever and in whatever manner the same shall become due, whether at stated
maturity, upon redemption or declaration or otherwise.

              The Agreement will provide for the assignment to the Trustee of
the County's interest in, and of the moneys receivable by the County under, the
Agreement and the Note.


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              The Agreement will also obligate Gulf to pay the fees and charges
of the Trustee and may provide that Gulf may at any time, so long as it is not
in default thereunder, prepay the amount due under the Agreement or the Note,
including interest thereon, in whole or in part, such payment to be sufficient
to redeem or purchase outstanding Revenue Bonds in the manner and to the extent
provided in the Trust Indenture.

              The Trust Indenture will provide that the Revenue Bonds issued
thereunder (i) may be redeemable at any time on or after a specified date from
the date of issuance, in whole or in part, at the option of Gulf, and may
require the payment of a premium at a specified percentage of the principal
amount which may decline annually thereafter, and (ii) will be redeemed in
whole, at the option of Gulf, in certain other cases of undue burdens or
excessive liabilities imposed with respect to the related Project, its
destruction or damage beyond practicable or desirable repairability or
condemnation or taking by eminent domain, or if operation of the related
facility is enjoined and Gulf determines to discontinue operation thereof, such
redemption of all such outstanding Revenue Bonds to be at the principal amount
thereof plus accrued interest, but without premium. It is proposed that the
Revenue Bonds will mature not more than 40 years from the first day of the month
in which they are initially issued and may, if it is deemed advisable for
purposes of the marketability of the Revenue Bonds, be entitled to the benefit
of a mandatory redemption sinking fund calculated to retire a portion of the
aggregate principal amount of the Revenue Bonds prior to maturity.

              The Trust Indenture and the Agreement may give the holders of the
Revenue Bonds the right, during such time as the Revenue Bonds bear interest at
a fluctuating rate or otherwise, to require Gulf to purchase the Revenue Bonds
from time to time, and arrangements may be made for the remarketing of any such
Revenue Bonds through a remarketing agent. Gulf also may be required to purchase


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the Revenue Bonds, or the Revenue Bonds may be subject to mandatory redemption,
at any time if the interest thereon is determined to be subject to federal
income tax. Also in the event of taxability, interest on the Revenue Bonds may
be effectively converted to a higher variable or fixed rate, and Gulf also may
be required to indemnify the bondholders against any other additions to
interest, penalties and additions to tax; such terms are not considered to
constitute the issuance of a separate security under Sections 6(a) and 7 of the
Act, but rather possible additional terms of the Revenue Bonds and Gulf's
obligations with respect thereto.

              In order to obtain the benefit of ratings for the Revenue Bonds
equivalent to the rating of Gulf's first mortgage bonds outstanding under the
indenture dated as of September 1, 1941 between Gulf and JPMorgan Chase Bank
(formerly The Chase Manhattan Bank), as trustee, as supplemented and amended
(the "Mortgage"), which ratings Gulf has been advised may be thus attained, Gulf
may determine to secure its obligations under the Note and the related Agreement
by delivering to the Trustee, to be held as collateral, a series of its first
mortgage bonds (the "Collateral Bonds") in principal amount either (i) equal to
the principal amount of the Revenue Bonds or (ii) equal to the sum of such
principal amount of the Revenue Bonds plus interest payments thereon for a
specified period. Such series of Collateral Bonds will be issued under an
indenture supplemental to the Mortgage (the "Supplemental Indenture"), will
mature on the maturity date of such Revenue Bonds and will be non-transferable
by the Trustee. The Collateral Bonds, in the case of clause (i) above, would
bear interest at a rate or rates equal to the interest rate or rates to be borne
by the related Revenue Bonds and, in the case of clause (ii) above, would be
non-interest bearing.


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              The Supplemental Indenture will provide, however, that the
obligation of Gulf to make payments with respect to the Collateral Bonds will be
satisfied to the extent that payments are made under the Note or the Agreement
sufficient to meet payments when due in respect of the related Revenue Bonds.
The Supplemental Indenture will provide that, upon acceleration by the Trustee
of the principal amount of all related outstanding Revenue Bonds under the Trust
Indenture, the Trustee may demand the mandatory redemption of the related
Collateral Bonds then held by it as collateral at a redemption price equal to
the principal amount thereof plus accrued interest, if any, to the date fixed
for redemption. The Supplemental Indenture may also provide that, upon the
optional redemption of the Revenue Bonds, in whole or in part, a related
principal amount of the Collateral Bonds will be redeemed at the redemption
price of the Revenue Bonds.

              In the case of interest bearing Collateral Bonds, because interest
accrues in respect of such Collateral Bonds until satisfied by payments under
the Note or the Agreement, "annual interest charges" in respect of such
Collateral Bonds will be included in computing the "interest earnings
requirement" of the Mortgage which restricts the amount of first mortgage bonds
which may be issued and sold to the public in relation to Gulf's net earnings.
In the case of non-interest bearing Collateral Bonds, since no interest would
accrue in respect of such Collateral Bonds, the "interest earnings requirement"
would be unaffected.

              The Trust Indenture will provide that, upon deposit with the
Trustee of funds sufficient to pay or redeem all or any part of the related
Revenue Bonds, or upon direction to the Trustee by Gulf to so apply funds
available therefor, or upon delivery of such outstanding Revenue Bonds to the
Trustee by or for the account of Gulf, the Trustee will be obligated to deliver
to Gulf the Collateral Bonds then held as collateral in an aggregate principal
amount as they relate to the aggregate principal amount of such Revenue Bonds


                                       5


for the payment or redemption of which such funds have been deposited or applied
or which shall have been so delivered.

              As an alternative to or in conjunction with Gulf's securing its
obligations through the issuance of the Collateral Bonds as above described,
Gulf may cause an irrevocable Letter of Credit or other credit facility (the
"Letter of Credit") of a bank or other financial institution (the "Bank") to be
delivered to the Trustee. The Letter of Credit would be an irrevocable
obligation of the Bank to pay to the Trustee, upon request, up to an amount
necessary in order to pay principal of and accrued interest on the Revenue Bonds
when due. Pursuant to a separate agreement with the Bank, Gulf would agree to
pay to the Bank, on demand or pursuant to a borrowing under such agreement, all
amounts that are drawn under the Letter of Credit, as well as certain fees and
expenses. Such delivery of the Letter of Credit to the Trustee would obtain for
the Revenue Bonds the benefit of a rating equivalent to the credit rating of the
Bank. In the event that the Letter of Credit is delivered to the Trustee as an
alternative to the issuance of the Collateral Bonds, Gulf may also convey to the
County a subordinated security interest in the Project or other property of Gulf
as further security for Gulf's obligations under the Agreement and the Note.
Such subordinated security interest would be assigned by the County to the
Trustee.

              As a further alternative to, or in conjunction with, securing its
obligations under the Agreement and Note as above described, and in order to
obtain a "AAA" rating for the Revenue Bonds by one or more nationally recognized
securities rating services, Gulf may cause an insurance company to issue a
policy of insurance guaranteeing the payment when due of the principal of and
interest on such series of the Revenue Bonds. Such insurance policy would extend


                                       6


for the term of the related Revenue Bonds and would be non-cancelable by the
insurance company for any reason. Gulf's payment of the premium with respect to
said insurance policy could be in various forms, including a non-refundable,
one-time insurance premium paid at the time the policies are issued, and/or an
additional interest percentage to be paid to said insurer in correlation with
regular interest payments. In addition, Gulf may be obligated to make payments
of certain specified amounts into separate escrow funds and to increase the
amounts on deposit in such funds under certain circumstances. The amount in each
escrow fund would be payable to the insurance company as indemnity for any
amounts paid pursuant to the related insurance policy in respect of principal of
or interest on the related Revenue Bonds.
              It is contemplated that the Revenue Bonds will be sold by the
County pursuant to arrangements with one or more purchasers, placement agents or
underwriters. In accordance with applicable state laws, the interest rate to be
borne by the Revenue Bonds will be approved by the County and will be either a
fixed rate, which fixed rate may be convertible to a rate which will fluctuate
in accordance with a specified prime or base rate or rates or may be determined
pursuant to certain remarketing or auction procedures, or a fluctuating rate,
which fluctuating rate may be convertible to a fixed rate. While Gulf may not be
party to the purchase, placement or underwriting arrangements for the Revenue
Bonds, such arrangements will provide that the terms of the Revenue Bonds and
their sale by the County shall be satisfactory to Gulf. Bond Counsel will issue
an opinion that, based upon existing law, interest on the Revenue Bonds will
generally be excludable from gross income for federal income tax purposes. Gulf
has been advised that the interest rates on obligations, the interest on which
is tax exempt, recently have been and can be expected at the time of issue of
the Revenue Bonds to be lower than the rates on obligations of like tenor and
comparable quality, interest on which is fully subject to federal income
taxation.


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              The effective cost to Gulf of any series of the Revenue Bonds will
not exceed the greater of (i) 200 basis points over comparable term U.S.
Treasury securities, or (ii) a gross spread over such Treasury securities which
is consistent with comparable securities. Such effective cost will reflect the
applicable interest rate or rates and any underwriters' discount or commission.

              The premium (if any) payable upon the redemption of any Revenue
Bonds at the option of Gulf will not exceed the greater of (i) 5% of the
principal amount of the Revenue Bonds so to be redeemed, or (ii) a percentage of
such principal amount equal to the rate of interest per annum borne by such
Revenue Bonds.

              The purchase price payable by or on behalf of Gulf in respect of
Revenue Bonds tendered for purchase at the option of the holders thereof will
not exceed 100% of the principal amount thereof, plus accrued interest to the
purchase date.

              Any Letter of Credit issued as security for the payment of Revenue
Bonds will be issued pursuant to a Reimbursement Agreement between Gulf and the
financial institution issuing such Letter of Credit. Pursuant to the
Reimbursement Agreement, Gulf will agree to pay or cause to be paid to the
financial institution, on each date that any amount is drawn under such
institution's Letter of Credit, an amount equal to the amount of such drawing,
whether by cash or by means of a borrowing from such institution pursuant to the
Reimbursement Agreement. Any such borrowing may have a term of up to 10 years
and will bear interest at the lending institution's prevailing rate offered to
corporate borrowers of similar quality which will not exceed (i) the London
Interbank Offered Rate plus up to 3%, (ii) the lending institution's certificate
of deposit rate plus up to 2-3/4%, or (iii) a rate not to exceed the prime rate
plus 1%, to be established by agreement with the lending institution prior to
the borrowing.


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              1.3 It is proposed that each series of Senior Notes will have a
maturity that will not exceed approximately 50 years.

              The interest rate on each issue of Senior Notes may be either a
fixed rate or an adjustable rate to be determined on a periodic basis by auction
or remarketing procedures, in accordance with formula or formulae based upon
certain reference rates, or by other predetermined methods.

              The Senior Notes will be direct, unsecured and unsubordinated
obligations of Gulf ranking pari passu with all other unsecured and
unsubordinated obligations of Gulf. The Senior Notes will be effectively
subordinated to all secured debt of Gulf, including its first mortgage bonds.
The Senior Notes will be governed by an indenture or other document.

              The underwriting fees, commissions or other similar expenses paid
in connection with the issue, sale or distribution of the Senior Notes of each
series will not exceed 5% of the aggregate principal amount of such series.

              The effective cost of money on the Senior Notes will not exceed
the greater of (i) 300 basis points over comparable term U.S. Treasury
securities, or (ii) a gross spread over such Treasury securities which is
consistent with comparable securities.

              The Senior Notes will be sold in any of the following ways: (i)
through underwriters or dealers; (ii) directly to a limited number of purchasers
or to a single purchaser, or (iii) through agents or dealers. If underwriters
are used in the sale of the Senior Notes, such Senior Notes will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The Senior
Notes may be offered to the public either through underwriting syndicates (which
may be represented by managing underwriters) or directly by one or more


                                       9


underwriters acting alone. The Senior Notes may be sold directly by Gulf or
through agents designated from time to time. If dealers are used in the sale of
any Senior Notes, such Senior Notes will be sold to the dealers as principal.
Any dealer may then resell such Senior Notes to the public at varying prices to
be determined by such dealer at the time of resale.

              Senior Notes may be sold pursuant to "delayed delivery contracts"
which permit the underwriters to locate buyers who will agree to buy the Senior
Notes at the same price but at a later date than the date of the closing of the
sale to the underwriters. Senior Notes may also be sold through the use of
medium-term note and similar programs, including in transactions covered by Rule
144A under the Securities Act of 1933, as amended.

              Any Senior Notes would have such designations, aggregate principal
amount, maturity, interest rate(s) or methods of determining the same, interest
payment terms, redemption provisions, non-refunding provisions, sinking fund
terms, conversion or put terms and other terms and conditions as Gulf may
determine at the time of issuance.

              1.4 It is proposed that each series of Gulf's first mortgage bonds
(the "new Bonds") will have a term of not more than 40 years and will be sold
for the best price obtainable but for a price to Gulf of not less than 98% nor
more than 101-3/4% of the principal amount thereof, plus accrued interest (if
any).

              The new Bonds will be issued under the Mortgage as heretofore
supplemented by various indentures supplemental thereto, and as to be further
supplemented by a Supplemental Indenture providing for each series of the new
Bonds to be issued.

              Gulf may provide that none of the new Bonds of any series will be
redeemed for a five-year or other period commencing on or about the first day of
the month of issuance at a regular redemption price if such redemption is for


                                       10


the purpose or in anticipation of refunding such new Bonds through the use,
directly or indirectly, of funds borrowed by Gulf at an effective interest cost
to Gulf (computed in accordance with generally accepted financial practice) of
less than the effective interest cost to Gulf of the new Bonds of such series.
Such limitation will not apply to redemptions at a special redemption price by
operation of the improvement fund or the replacement provisions of the Mortgage
or by the use of proceeds of released property.

              Gulf may covenant that it will not redeem the new Bonds of any
series, in any year prior to the fifth or other specified year after the
issuance of such series, through the operation of the improvement fund
provisions of the Mortgage in a principal amount which would exceed 1% of the
initial aggregate principal amount of such series.

              Gulf also may covenant that it will not, in any calendar year,
redeem the new Bonds of any series through the operation of the replacement
provisions of the Mortgage in a principal amount which would exceed 1% of the
initial aggregate principal amount of such series.

              In addition, Gulf may make provision for a mandatory cash sinking
fund for the benefit of any series of the new Bonds. In connection therewith,
Gulf may have the non-cumulative option in any year of making an optional
sinking fund payment in an amount not exceeding such mandatory sinking fund
payment.

              In order to enhance the marketability of the new Bonds, it may be
desirable to cause an insurance company to issue a policy of insurance for the
payment when due of the new Bonds of a particular series. It also may be
desirable that the terms of the new Bonds, or any series thereof, provide for an
adjustable interest rate thereon to be determined on a periodic basis, rather
than a fixed interest rate. In such event, it is proposed that the rate of
interest on such new Bonds for an initial period would be a fixed rate per
annum. Periodically thereafter, the interest rate would be adjusted by periodic


                                       11


auction or remarketing procedures, or in accordance with a formula or formulae
based upon certain reference rates, or by other predetermined methods.

              In connection with any such adjustable rate issue, it is proposed
that such series of the new Bonds may not be redeemable at the option of Gulf
during certain short-term interest periods. It is further proposed that the
non-refunding limitation described above, as well as the restriction on
redemptions through operation of the improvement fund provisions, may apply with
respect to each long-term interest period commencing with the first day of the
month in which any such interest period begins.

              1.5 It is proposed that each issuance of Gulf's preferred stock,
par or stated value of up to $100 per share (the "new Preferred Stock"), will be
sold for the best price obtainable (after giving effect to the purchasers'
compensation) but for a price to Gulf (before giving effect to such purchasers'
compensation) of not less than 100% of the par or stated value per share.

              The authorized number of shares of preferred stock of Gulf may be
increased by amendment to the Articles of Incorporation of Gulf and the new
Preferred Stock of each series will be created, and its terms established, by
resolution of the board of directors of Gulf which when filed with the Secretary
of State of Maine will constitute an amendment to the charter of Gulf. Gulf may
make provision for a cumulative sinking fund for the benefit of a particular
series of the new Preferred Stock which would retire a certain number of shares
of such series annually, commencing at a specified date after the sale. In
connection therewith, Gulf may have the non-cumulative option of redeeming up to
an additional like number of shares of such series annually.

              Gulf may provide that no share of a particular series of the new
Preferred Stock will be redeemed for a five-year or other period commencing on


                                       12


or about the first day of the month of issuance, if such redemption is for the
purpose or in anticipation of refunding such share directly or indirectly
through the incurring of debt, or through the issuance of stock ranking equally
with or prior to the new Preferred Stock as to dividends or assets, if such debt
has an effective interest cost to Gulf (computed in accordance with generally
accepted financial practice) or such stock has an effective dividend cost to
Gulf (so computed) of less than the effective dividend cost to Gulf of the
respective series of the new Preferred Stock.

              Gulf may determine that, in light of the current market conditions
at the time any series of the new Preferred Stock is offered, it is in the best
interest of Gulf and its investors and consumers that the terms of such new
Preferred Stock provide for an adjustable dividend rate thereon to be determined
on a periodic basis, rather than a fixed rate dividend. In such event, it is
proposed that the rate of dividends on such new Preferred Stock for an initial
period would be a fixed amount or rate per annum. Periodically thereafter, the
rate would be adjusted by periodic auction or remarketing procedures, or in
accordance with a formula or formulae based upon certain reference rates, or by
other predetermined methods.

              1.6 Gulf may determine to use the proceeds from the sale of the
Revenue Bonds, the Senior Notes, the new Bonds and the new Preferred Stock to
redeem or otherwise retire its outstanding senior notes, first mortgage bonds,
pollution control bonds and/or preferred stock if such use is considered
advisable. To the extent that the redemption or other retirement of outstanding
preferred stock using the proceeds from security sales as proposed herein may
require authorization under Section 12(c) of the Act, Gulf hereby requests such
authorization. Gulf also proposes that it may use the proceeds from the sale of
the Senior Notes, the new Bonds and new Preferred Stock, along with other funds,
to pay a portion of its cash requirements to carry on its electric utility
business.


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              1.7 Gulf represents that it will maintain its common equity as a
percentage of capitalization (inclusive of short-term debt) at no less than
thirty percent. Gulf will not publicly issue any of the securities for which
authorization by the Commission is requested herein unless such securities are
rated (to the extent that they are rated at the time of issuance) at the
investment grade level as established by at least one "nationally recognized
statistical rating organization", as that term is used in paragraphs (c)(2)(vi)
(E), (F) and (H) of Rule 15c3-1 under the Securities Exchange Act of 1934, as
amended. Gulf requests that the Commission reserve jurisdiction over the
issuance by Gulf of any such securities that are rated below investment grade.

              1.8 Pursuant to orders of the Commission, Gulf has authority to
issue and sell $350,000,000 of senior notes (of which, $280,000,000 has been
sold), $400,000,000 of first mortgage bonds and/or preferred stock and
$200,000,000 of pollution control revenue bonds (of which, $95,930,000 has been
sold) as set forth in Commission File No. 70-9171 (HCAR No. 35-26870, dated May
14, 1998) and in Commission File No. 70-8949 (HCAR No. 35-26736, dated June 30,
1997). Gulf hereby requests that the authority described in the above-mentioned
orders remain in effect until such time as the order with respect to the matters
requested herein is issued.



Item 2.       Fees, Commissions and Expenses.

              The fees and expenses in connection with the proposed transactions
(other than underwriting discounts and commissions) are estimated not to exceed
$2,000,000. The prospectus supplement or offering circular relating to each
offering will reflect the actual expenses based upon the amount of the related
offering.


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Item 3.       Applicable Statutory Provisions.

              Sections 6(a), 7 and 12(c) of the Act and Rules 23, 42 and 54
thereunder are applicable to the proposed transactions.

              Gulf further considers that the sale or granting of subordinated
security interests in the Projects or other property of Gulf, as set forth under
Item 1.3 above, may be subject to Section 12(d) of the Act, and that the
exception afforded by subparagraph (b)(3) of Rule 44 thereunder may be
applicable.

              Gulf considers that any guarantee of payment of the Revenue Bonds
may be subject to Sections 6(a) and 7 of the Act.

              Gulf considers that Sections 9(a) and 10 of the Act may be
applicable to any purchase of Revenue Bonds by Gulf as described herein and to
the extent that the transactions contemplated herein in connection with the
Revenue Bonds involve an Installment Sale Agreement or Agreements pursuant to
which the County undertakes to sell the related Project to Gulf.

              Gulf considers that the acquisition, retirement or redemption of
Senior Notes, new Bonds and new Preferred Stock in connection with any sinking
fund provisions with respect thereto (including any optional redemptions
included as part of such sinking fund provisions) are excepted from the
requirements of Section 12(c) of the Act by Rule 42 thereunder.

              The proposed transactions will be carried out in accordance with
the procedure specified in Rule 23 and pursuant to an order or orders of the
Commission in respect thereto.

              Rule 54 Analysis: The proposed transactions are also subject to
Rule 54, which provides that, in determining whether to approve an application
which does not relate to any "exempt wholesale generator" ("EWG") or "foreign
utility company" ("FUCO"), the Commission shall not consider the effect of the


                                       15


capitalization or earnings of any such EWG or FUCO which is a subsidiary of a
registered holding company if the requirements of Rule 53(a), (b) and (c) are
satisfied.

              Southern currently meets all of the conditions of Rule 53(a). At
September 30, 2002, Southern's "aggregate investment," as defined in Rule
53(a)(1), in EWGs and FUCOs was approximately $231.3 million, or 4.99% of
Southern's "consolidated retained earnings," also as defined in Rule 53(a)(1),
as of September 30, 2002 ($4.640 billion).1

              In addition, Southern has complied and will continue to comply
with the record-keeping requirements of Rule 53(a)(2), the limitation under Rule
53(a)(3) on the use of operating company personnel to render services to EWGs
and FUCOs, and the requirements of Rule 53(a)(4) concerning the submission of
copies of certain filings under the Act to retail rate regulatory commissions.
Further, none of the circumstances described in Rule 53(b) has occurred.

___________________________

1 As discussed in Southern's Application on Form U-1 (File No. 70-9727) relating
to the spin-off of Mirant Corporation ("Mirant"), Southern and Mirant
reorganized certain energy-related and FUCO activities and Mirant completed a
tax-free distribution to Southern of these activities on March 5, 2001 (the
"Mini-Spin"). On April 2, 2001, Southern completed the spin-off of its remaining
ownership interest in Mirant to Southern's shareholders. Therefore, the four
indirect subsidiaries (EPZ Lease, Inc., Dutch Gas Lease, Inc., GAMOG Lease, Inc.
and NUON Lease, Inc.) obtained through the Mini-Spin are the only remaining FUCO
investments held by Southern. Although Southern now owns all of the equity in
these companies as a result of the Mini-Spin, Southern has no direct or indirect
investment or any aggregate investment within the meaning of Rule 53 in these
FUCOs, including any direct or indirect guarantees or credit positions related
to any capital or financing leases. Furthermore, the only remaining EWG
investment held by Southern after the spin-off is Southern Company-Florida LLC,
which was organized during the first quarter of 2001. Southern has executed
limited keep-well commitments whereby Southern would be required to make capital
contributions to Southern Energy Finance Capital Corp. or to Southern Energy
Finance Company, Inc. in the event of a shortfall in the scheduled debt service
resulting from certain changes in the payments due from Southern under the
Southern Company Income Tax Allocation Agreement. The maximum potential capital
contribution required under these commitments is the unamortized balance of the
related loans, which totaled approximately $372 million as of September 30,
2002.



                                       16



Item 4.       Regulatory Approval.

              Gulf's obligations with respect to the Collateral Bonds, the
borrowings under the Agreements, the issuance of the Notes in respect thereof
and the issuance and sale of the Senior Notes, the new Bonds and the new
Preferred Stock will have been expressly authorized by the Florida Public
Service Commission, which has jurisdiction over the issuance of stocks, bonds
and certain evidence of indebtedness by public utility companies operating in
Florida.

              The transactions by Gulf proposed herein are not subject to the
jurisdiction of any state commission or of any federal commission other than the
Commission.

Item 5.       Procedure.

              Gulf requests that the Commission's order herein be issued as soon
as the rules allow and that there be no 30-day waiting period between the
issuance of the Commission's order and the date on which it is to become
effective. Gulf hereby waives a recommended decision by a hearing officer or
other responsible officer of the Commission and hereby consents that the
Division of Investment Management may assist in the preparation of the
Commission's decision and/or order in this matter unless such Division opposes
the matters covered hereby.




                                       17



Item 6.       Exhibits and Financial Statements.

              (a)            Exhibits.

                A-1(a) - Indenture dated as of September 1, 1941, between
                         Gulf and JPMorgan Chase Bank (formerly The Chase
                         Manhattan Bank), as Trustee, and indentures
                         supplemental thereto through November 1, 1996.
                         (Designated in Registration Nos. 2-4833 as Exhibit B-3,
                         2-62319 as Exhibit 2(a)-3, 2-63765 as Exhibit 2(a)-3,
                         2-66260 as Exhibit 2(a)-3, 33-2809 as Exhibit 4(a)-2,
                         33-43739 as Exhibit 4(a)-2, in Gulf's Form 10-K for the
                         year ended December 31, 1991, File No. 0-2429, as
                         Exhibit 4(b), in Form 8-K dated August 18, 1992, File
                         No. 0-2429, as Exhibit 4(a)-3, in Registration No.
                         33-50165 as Exhibit 4(a)-2, in Form 8-K dated July 12,
                         1993, File No. 0-2429, as Exhibit 4, in Certificate of
                         Notification, File No. 70-8229, as Exhibit A, in
                         Certificate of Notification, File No. 70-8229, as
                         Exhibits E and F, in Form 8-K dated January 17, 1996,
                         File No. 0-2429, as Exhibit 4, in Certificate of
                         Notification, File No. 70-8229, as Exhibit A, in
                         Certificate of Notification, File No. 70-8229, as
                         Exhibit A and in Form 8-K dated November 6, 1996, File
                         No. 0-2429, as Exhibit 4.)

                A-1(b) - Form of Supplemental Indenture with respect to the
                         new Bonds, between Gulf and JPMorgan Chase Bank, as
                         Trustee. (To be filed by amendment.)

                A-2(a) - Senior Note Indenture dated as of January 1, 1998,
                         between Gulf and JPMorgan Chase Bank (formerly The
                         Chase Manhattan Bank), as Trustee, and indentures
                         supplemental thereto through January 30, 2002.
                         (Designated in Form 8-K dated June 17, 1998, File No.
                         0-2429, as Exhibits 4.1 and 4.2, in Form 8-K dated
                         August 17, 1999, File No. 0-2429, as Exhibit 4.2, in
                         Form 8-K dated July 31, 2001, File No. 0-2429, as
                         Exhibit 4.2, in Form 8-K dated October 5, 2001, File
                         No. 0-2429, as Exhibit 4.2 and in Form 8-K dated
                         January 18, 2002, File No. 0-2429, as Exhibit 4.2.)

                A-2(b) - Form of Supplemental Indenture to Senior Note
                         Indenture between Gulf and JPMorgan Chase Bank . (To be
                         filed by amendment.)

                A-3(a) - Restated Articles of Incorporation of Gulf and
                         amendments thereto through February 9, 2001.
                         (Designated in Registration No. 33-43739 as Exhibit
                         4(b)-1, in Form 8-K dated January 15, 1992, File No.
                         0-2429, as Exhibit 1(b), in Form 8-K dated August 18,


                                       18


                         1992, File No. 0-2429, as Exhibit 4(b)-2, in Form 8-K
                         dated September 22, 1993, File No. 0-2429, as Exhibit
                         4, in Form 8-K dated November 3, 1993, File No. 0-2429,
                         as Exhibit 4, in Gulf's Form 10-K for the year ended
                         December 31, 1997, File No. 0-2429, as Exhibit 3(d)2
                         and in Gulf's Form 10-K for the year ended December 31,
                         2000, File No. 0-2429, as Exhibit 3(d)2.)

                A-3(b) - Form proposed amendment to articles of
                         incorporation of Gulf increasing the amount of
                         authorized preferred stock. (To be filed by amendment.)

                A-3(c) - By-laws of Gulf as amended effective July 26, 2002,
                         and as presently in effect.

                  B-1  - Form of Loan or Installment Sale Agreement between
                         Gulf and the County relating to the Revenue Bonds. (To
                         be filed by amendment.)

                  B-2  - Form of Trust Indenture between the County and the
                         Trustee relating to the Revenue Bonds. (To be filed by
                         amendment.)

                  C    - Registration statement pursuant to the Securities Act
                         of 1933, as amended. (Filed electronically May 1, 2001
                         File No. 333-59942.)

                  D    - None.

                  E    - None.

                  F    - Opinion of Beggs & Lane, counsel for Gulf. (To be
                         filed by amendment.)

                  G    - Form of Notice.

Exhibits heretofore filed with the Securities and Exchange Commission and
designated as set forth above are hereby incorporated herein by reference and
made a part hereof with the same effect as if filed herewith.

              (b)  Financial Statements.

              Balance sheet of Gulf at September 30, 2002. (Designated in Gulf's
Form 10-Q for the quarter ended September 30, 2002, File No. 0-2429.)

              Statements of Income of Gulf for the period ended September 30,
2002. (Designated in Gulf's Form 10-Q for the quarter ended September 30, 2002,
File No. 0-2429.)

              Since September 30, 2002, there have been no material adverse
changes, not in the ordinary course of business, in the financial condition of
Gulf from that set forth in or contemplated by the foregoing financial
statements.


                                       19


Item 7.       Information as to Environmental Effects.
              (a) The proposed transactions are strictly financial in nature in
the ordinary course of Gulf's business. Accordingly, the Commission's action in
these matters will not constitute any major federal action significantly
affecting the quality of the human environment within the meaning of the
National Environmental Policy Act.
              (b) No other federal agency has prepared or is preparing an
environmental impact statement with regard to the proposed transactions.


                                    SIGNATURE

              Pursuant to the requirements of the Public Utility Holding Company
Act of 1935, the undersigned company has duly caused this Form U-1 to be signed
on its behalf by the undersigned thereunto duly authorized.

Dated:  February 21, 2003                   GULF POWER COMPANY



                                         By: /s/Wayne Boston
                                              Wayne Boston
                                          Assistant Secretary

EX-99

                                                                  Exhibit A-3(b)
                               GULF POWER COMPANY
                                     BY-LAWS

                                    I N D E X

Section                                                                    Page

      1.   Annual Meeting of Stockholders - Location and date                1

              (The annual meeting of stockholders is to be held at the
              office of the Corporation in the State of Maine, or at such
              other place within or without the State of Maine as the
              Board of Directors may determine, on the last Tuesday in
              June each year; provided, however, that the Board of
              Directors may fix an earlier day in any year.)

2.   Special Meetings of Stockholders - Location and Method of Call          1

3.   Notice of Meeting of Stockholders - Time, Place, and Purpose            1

              (Notice of the time, place and purpose of every meeting of
              stockholders shall be mailed by the Secretary or the Officer
              performing his duties at least ten days before the meeting
              to each stockholder of record entitled to vote.)

4. Quorum 1

5. Stock 1

              (a) Regulations governing issuance of stock (b) Dividends -
              Declaration, payment, limitations and
                    definitions

6.   Replacement of Lost, Destroyed or Mutilated Certificates                2

7.   Election of Board of Directors - Total Number of Directors              3
        Allowed, and Number Consituting a Quorum

8.   Board of Directors' Meetings, Annual and Other Notices                  4
        of Meetings, etc

July 26, 2002                        i




                               GULF POWER COMPANY
                                     BY-LAWS

                                    I N D E X
Section                                                                     Page

 9. Appointment and Term of Office 4

10.   Appointment and Duties of Executive Committee                          4

11.   Duties and Powers of the President                                     5

12.   Succession of Officers in Event of Inability of President to Act       5

13.   Duties and Powers of the Secretary                                     5

14.   Duties and Powers of the Treasurer                                     5

15.   Duties and Powers of the Comptroller                                   6

16.   Duties and Powers of Assistant Secretaries, Assistant Treasurers,      6
         and Assistant Comptroller

17.   Qualifications, Duties and Powers of the Clerk                         6

18.   Delegation of Duties and Powers by the Board of Directors              6

19.   Selection of Successor Directors to fill Vacancies by Reason           6
         of Death, Resignation, etc.

20.   Power to Authorize Compensation for Directors                          6

21.      Indemnification                                                     7

22.   Power to Select Depositaries and Designate Required Signatures         8

23.   Corporate Seal - Description                                           8

24.   Business Transactions Between Corporation and its Directors            8

25.      Amendment to By-laws                                                9

July 26, 2002                        ii




                               GULF POWER COMPANY

                                     BY-LAWS




                  Section 1. The annual meeting of the stockholders of the
corporation for the election of directors and for the transaction of such other
corporate business as may properly come before such meeting shall be held at the
corporation's office, in the State of Maine, or at such other place within or
without the State of Maine as the Board of Directors may determine, on the last
Tuesday in June in each year; provided, however, that the Board of Directors may
fix an earlier day for such annual meeting of stockholders in any particular
year; and provided further that, if the day fixed for such annual meeting of
stockholders is a legal holiday, such meeting shall be held on the first day
thereafter which is not a legal holiday.

                  Section 2. Special meetings of the stockholders of the
corporation may be held at such time and at such place within or without the
State of Maine as may be determined by the President or the Board of Directors
or Executive Committee, or stockholders holding one-fourth of the then
outstanding capital stock entitled to vote.

                  Section 3. Notice of the time, place and purpose of every
meeting of stockholders shall be mailed by the Secretary or the officer
performing his duties at least ten days before the meeting to each stockholder
of record entitled to vote, at his post office address as shown by the records
of the corporation, but meetings may be held without notice if all stockholders
entitled to vote are present or if notice is waived before or after the meeting
by those not present. No stockholder shall be entitled to notice of any meeting
of stockholders with respect to any shares registered in his name after the date
upon which notice of such meeting is required by law or by these by-laws to have
been mailed or otherwise given to stockholders.

                  Section 4. Subject to the provisions of the articles of
incorporation, as amended, the holders of a majority of the stock of the
corporation entitled to vote, present in person or by proxy, shall constitute a
quorum, but less than a quorum shall have power to adjourn.

                  At all meetings of stockholders, each stockholder entitled to
vote may vote and otherwise act either in person or by proxy.

                  Section 5. The stock of the corporation shall be transferable
or assignable on the books of the corporation by the holders in person or by
attorney on the surrender of the certificates therefor duly endorsed. The
certificates of stock of the corporation shall be numbered and shall be entered
in the books of the corporation and registered as they are issued. They shall




July 26, 2002                        1





exhibit the name of the registered holder and shall certify the number of shares
owned by him and shall be signed by, or in the name of the corporation by, the
President or a Vice-President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary, and shall be sealed with the corporate
seal of the corporation. Where such certificate is signed by a Transfer Agent or
by a Transfer Clerk acting on behalf of the corporation and by a Registrar, the
signature of any such President, Vice-President, Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary and the seal of the corporation may be
facsimile. In case any officer or officers who shall have signed, or whose
facsimile signature or signatures shall have been used on, any such certificate
or certificates, shall cease to be such officer or officers of the corporation,
whether because of death, resignation or otherwise, before such certificate or
certificates shall have been delivered by the corporation, such certificate or
certificates may nevertheless be adopted by the corporation and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures shall have been used
thereon had not ceased to be such officer or officers of the corporation and the
issuance and delivery of any such certificate or certificates shall be
conclusive evidence of such adoption.

                  The stock transfer books of the corporation may be closed by
order of the Board of Directors for such period, not to exceed sixty days
previous to any meeting of the stockholders or previous to the payment of any
dividend upon the stock of the corporation, as the Board may determine, during
which time no transfer of stock upon the books of the Corporation shall be made,
and said books shall be re-opened the day following the date fixed for such
meeting or for the payment of such dividend. If the stock transfer books of the
corporation are ordered closed by the Board of Directors, every stockholder who
appears of record at the time of closing said books shall be entitled to vote at
the meeting or to receive the dividend on account of which the said books were
ordered closed. In lieu of providing for the closing of the stock transfer books
of the corporation, the Board of Directors may fix a date not exceeding sixty
days preceding the date of any meeting of stockholders, or any dividend payment
date, as the record date for the determination of the stockholders entitled to
notice of and to vote at such meeting, or entitled to receive such dividend, as
the case may be. If the stock transfer books of the corporation are not ordered
closed by the Board of Directors or if the Board of Directors does not fix a
date of record in lieu thereof, every stockholder who appears of record on the
date of a stockholders' meeting shall be entitled to vote at such meeting and
every stockholder who appears of record on the date specified by the Board of
Directors in their declaration of a dividend shall be entitled to such dividend.

                  Section 6. Upon receipt by this corporation of evidence,
satisfactory to the Board of Directors, of the loss, destruction or mutilation
of any certificate of stock of this corporation and, if required by the Board of
Directors, upon receipt of indemnity satisfactory to the Board of Directors and
upon surrender and cancellation of such certificate, if mutilated, the Board of
Directors may, if it so determines, direct the officers of this corporation to
execute and deliver a new certificate of like tenor and for the same number of


July 26, 2002                        2




shares of the same class of stock to be issued in lieu of such lost, destroyed
or mutilated certificate.

                  Section 7. The affairs of this corporation shall be managed by
a Board consisting of not less than six directors, nor more than fifteen
directors, their number to be fixed at the annual or any special meeting of the
stockholders, who shall be elected annually by the stockholders entitled to
vote, to hold office until their successors are elected and qualify. Directors
need not be stockholders. A majority of the members of the Board then in office
shall constitute a quorum. Vacancies in the Board of Directors may be filled by
the Board at any meeting, including vacancies arising from the election of fewer
directors than the total number fixed. Any and all of the directors may at any
time be removed without cause assigned by the vote of the holders of a majority
in number of all of the outstanding stock entitled to vote given at a meeting
called for the purpose of considering such action. The foregoing provisions of
this Section 7 relating to the election of directors and to the filling of
vacancies in the Board of Directors shall be subject to the provisions of the
Articles of Incorporation, as amended.

                  A person being a full-time executive employee of the
corporation or its parent company or any affiliated company when first elected a
director of the corporation (hereinafter sometimes referred to as an
"employee-director") shall not be eligible for election as a director when he
ceases to be an executive employee, whether by reason of resignation, retirement
or other cause. Any employee-director shall resign as a director effective on
the date he ceases to be an executive employee.

                  A person not an employee-director shall not be eligible to
serve as a director of the corporation (1) after his 70th birthday, (2) one year
after permanent separation from the business or professional organization with
which he was primarily associated when first elected a director, (3) one year
after any other material change in his primary occupation or executive position
from that which he pursued or held when first elected a director, or (4) one
year after moving his principal residence outside the service area in which he
was a resident when first elected a director, whichever event first occurs. The
application to an individual of any provision of this paragraph may be waived by
the Board of Directors. Any such waiver shall only be effective on a
year-to-year basis. The provisions of this paragraph, with the exception of item
(1) above, shall apply only to those individuals elected as a member of the
Board of Directors after the annual meeting of this Board held July 26, 1996.

                  Any employee-director who is not eligible for election as a
director by reason of the foregoing provisions shall be eligible for election
and re-election by the Board of Directors as an advisory director, upon the
recommendation of the Chief Executive Officer of the corporation, for a term
ending at the first meeting of the Board of Directors following the annual
meeting of stockholders next following such election. Any person eligible for


July 26, 2002                        3




election as an advisory director must be one whose services as such will be, in
the opinion of the Board of Directors, of value to the corporation. An advisory
director shall be entitled to notice of and to attend and advise but not to vote
at, meetings of the Board of Directors, and of any committees thereof to which
he shall be appointed, nor shall he be counted in determining the existence of a
quorum, and for his services may be paid, in the discretion of the Board of
Directors, compensation and reimbursement of expenses on the same basis as if he
were a director.

                  Section 8. The annual meeting of the Board of Directors shall
be held as soon as practicable after the annual meeting of the stockholders.
Other meetings of the Board of Directors shall be held at the times fixed by
resolution of the Board or upon call of the Chairman of the Board, the President
or a Vice-President or any person upon whom powers have devolved pursuant to
Section 12 hereof. The Secretary or officer performing his duties shall give at
least two days' notice of all meetings of Directors, provided that a meeting may
be held without notice immediately after the annual election of Directors, and
notice need not be given of regular meetings held at times fixed by resolution
of the Board. Meetings may be held at any time without notice if all the
Directors are present or if those not present waive notice either before or
after the meeting. Notice by mail or telegraph to the usual business or
residence address of the director shall be sufficient. The purpose of special
meetings of the Board of Directors need not be stated in such notice unless
required by law and unless otherwise indicated in the notice any and all
business may be transacted at a special meeting of the Board of Directors.

                  Section 9. The Board of Directors, as soon as may be
convenient after the election of directors in each year, may appoint one of
their number Chairman of the Board and shall appoint one of their number
President of the corporation, and shall also appoint one or more
Vice-presidents, a Secretary and a Treasurer, none of whom need be members of
the Board, and shall, from time to time, appoint such other officers as they may
deem proper. The same person may be appointed to more than one office. The term
of office of all officers shall be for one year and until their respective
successors are chosen and qualified, but any officer may be removed from office
at any time by the Board of Directors without cause assigned. Vacancies in the
offices shall be filled by the Board of Directors.

                  Section 10. The Board of Directors, as soon as may be after
the election in each year, may appoint an executive committee to consist of the
President and such number of directors as the Board may from time to time
determine. Such committee shall have and may exercise all of the powers of the
Board during the intervals between its meetings which may be lawfully delegated,
subject to such limitations as may be provided by a resolution of the Board. The
Board shall have the power at any time to change the membership of such
committee and to fill vacancies in it. The executive committee may make rules
for the conduct of its business and may appoint such committees and assistants
as it may deem necessary. The Board may, from time to time, determine by
resolution the number of members of such committee required to constitute a
quorum. The Board shall designate the Chairman of the executive committee and


July 26, 2002                        4




the proceedings of the executive committee shall from time to time be reported
to the Board of Directors.

                  Section 11. Unless otherwise designated as separate offices by
the Board of Directors, the President shall be the Chief Executive Officer of
the corporation; he shall preside at all meetings of the stockholders and
directors; he shall have general supervision of the business of the corporation;
shall see that all orders and resolutions of the Board are carried into effect,
subject, however, to the rights of the directors to delegate any specific
powers, except such as may be by statute exclusively conferred on the President,
to any other officer of the corporation. He shall, unless otherwise ordered,
execute bonds, deeds, mortgages, and other contracts, and when required shall
cause the seal of the corporation to be affixed thereto and shall sign
certificates of stock. He shall be ex officio a member of all standing
committees, and shall submit to the stockholders at their annual meeting a
report of the year's business. Should the offices of President and Chief
Executive Officer be held by different persons, the above duties shall be as
delegated to each office by the Board of Directors.

                  Section 12. Notwithstanding the provisions of Section 9
hereof, in the event of the absence or inability of the President to act, the
powers and duties of the President shall, subject to the control of the Board of
Directors, devolve successively upon such other persons as shall have been
designated in a resolution adopted by the Board of Directors, and in accordance
with the order of succession set forth therein.

                  Section 13. The Secretary shall attend all sessions of the
Board and record all votes and the minutes of all proceedings in a book to be
kept for that purpose; and shall perform like duties for standing committees
when required. He shall give or cause to be given notice of all meetings of the
stockholders and the Board of Directors, and of standing committees when
required, and shall perform such other duties as may be prescribed by the Board
of Directors or the President under whose supervision he shall act. He shall
keep in safe custody the seal of the Corporation, and when authorized, affix the
same to any instrument requiring a seal, and attest the signatures thereof, when
directed or required to do so.

                  Section 14. The Treasurer shall have the custody of the
corporate funds and securities, and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation, and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation, in such depositaries as may be designated by the Board of
Directors. He shall disburse the funds of the corporation as may be ordered by
the Board, taking proper vouchers for such disbursements, and shall render to
the President, and to the directors at the regular meetings of the Board or
whenever they may require it, an account of all his transactions as Treasurer
and of the financial condition of the corporation. He shall give the corporation
a bond for the faithful performance of the duties of his office, and for the


July 26, 2002                        5




restoration to the corporation in case of his death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind, in his possession or under his control belonging to the
corporation.

                  Section 15. It shall be the duty of the Comptroller to
supervise and be responsible for accounting transactions of the corporation; to
have charge of the installation and supervision of all accounting and
statistical records, the preparation of all financial and statistical statements
and reports, and the accounting methods, systems and forms in use by all
departments; he shall perform such other duties as may be assigned to him from
time to time by the President.

                  Section 16. One or more Assistant Secretaries or Assistant
Treasurers or Assistant Comptrollers may be elected by the Board or appointed by
the President to hold office until the next annual meeting of the Board of
Directors and until their successors are elected or appointed, but may be
removed at any time. They shall perform any or all of the duties of the
Secretary or Treasurer, or Comptroller as the case may be, and such other duties
as may be assigned to them from time to time.

                  Section 17. The corporation shall have and continuously
maintain a Clerk who shall maintain a registered office at some fixed place
within the State of Maine which shall then be construed as the corporation's
registered office in the State of Maine. The Clerk shall not be an Officer of
the corporation. The Clerk shall be a resident of Maine, and shall keep, in a
book kept for such purpose, the records of all stockholders' meetings, and shall
perform such duties and have such powers as are prescribed by the Maine Business
Corporation Act in effect from time to time. The Clerk shall be appointed by the
Board of Directors and shall serve until his successor is duly elected and
qualified.

                  Section 18. In the case of the absence of any officer of the
corporation, or for any other reason that the Board may deem sufficient, the
Board may delegate the powers or duties of such officers to any other officer or
to any director, for the time being.

                  Section 19. If the office of any director becomes vacant by
reason of death, resignation, retirement, disqualification, removal from office,
or otherwise, the remaining directors then in office, even though less than a
quorum, by a majority vote may choose a successor or successors, who shall hold
office for the unexpired term in respect of which such vacancy occurred; but
vacancies in the Board of Directors arising from the election of fewer directors
than the total number fixed shall be filled in the manner prescribed by Section
7 thereof.

                  Section 20. The Board of Directors shall have power to
authorize the payment of compensation to the directors for services to the
corporation, including fees for attendance at meetings of the Board of


July 26, 2002                        6




Directors, of the executive committee and all other committees and to determine
the amount of such compensation and fees.

                  Section 21.

                  A.  Indemnity

                  To the fullest extent permitted by law, the Company shall
indemnify each person made, or threatened to be made, a party to any threatened,
pending, or completed claim, action, suit or proceeding, whether civil or
criminal, administrative or investigative, and whether by or in the right of the
Company or otherwise, by reason of the fact that such person, or such person's
testator or intestate, is or was a director, officer or was an employee of the
Company holding one or more management positions through and inclusive of
managers (but not positions below the level of managers) (such positions being
hereinafter referred to as "Management Positions") or is or was serving at the
request of the Company as a director, officer, employee, agent or trustee of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, in any capacity at the request of the Company, against all
loss and expense actually or reasonably incurred by him including, without
limiting the generality of the foregoing, judgments, fines, penalties,
liabilities, sanctions, and amounts paid in settlement and attorneys fees and
disbursements actually and necessarily incurred by him in defense of such action
or proceeding, or any appeal therefrom. The indemnification provided by this
Section shall inure to the benefit of the heirs, executors and administrators of
such person.

                  In any case in which a director, officer of the Company or
employee of the Company holding one or more Management Positions requests
indemnification with respect to the defense of any such claim, action, suit or
proceedings, the Company may advance expenses (including attorney's fees)
incurred by such person prior to the final disposition of such claim, action,
suit or proceeding, as authorized by the Board of Directors in the specific
case, upon receipt of a written undertaking by or on behalf of such person to
repay amounts advanced if it shall ultimately be determined that such person was
not entitled to be indemnified by the Company under this Section or otherwise;
provided, however, that the advancement of such expenses shall not be deemed to
be indemnification unless and until it shall ultimately be determined that such
person is entitled to be indemnified by the Company. Such a person claiming
indemnification shall be entitled to indemnification upon a determination that
no judgment or other final adjudication adverse to such person has established
that such person's acts were committed in bad faith or were the result of active


July 26, 2002                        7




and deliberate dishonesty and were material to the cause of action so
adjudicated, or such person personally obtained an economic benefit including a
financial profit or other advantage to which such person was not legally
entitled. Without limiting the generality of the foregoing provision, no former,
present or future director or officer of the Company or employee of the Company
holding one or more management positions, or his heirs, executors or
administrators, shall be liable for any undertaking entered into by the Company
or its subsidiaries or affiliates as required by the Securities and Exchange
Commission pursuant to any rule or regulation of the Securities and Exchange
Commission now or hereafter in effect or orders issued pursuant to the Public
Utility Holding Company Act of 1935, the Federal Power Act, or any undertaking
entered into by the Company due to environmental requirements including all
legally enforceable environmental compliance obligations imposed by federal,
state or local statute, regulation, permit, judicial or administrative decree,
order and judgment or other similar means, or any undertaking entered into by
the Company pursuant to any approved Company compliance plan or any federal or
state or municipal ordinance which directly or indirectly regulates the Company,
or its parent by reason of their being holding or investment companies, public
utility companies, public utility holding companies or subsidiaries of public
utility holding companies.

                  The foregoing rights shall not be exclusive of any other
rights to which any such director, officer or employee may otherwise be entitled
and shall be available whether or not the director, officer or employee
continues to be a director, officer or employee at the time of incurring any
such expenses and liabilities.

                  If any word, clause or provision of the By-laws or any
indemnification made under this Section 21 shall for any reason be determined to
be invalid, the remaining provisions of the By-Laws shall not otherwise be
affected thereby but shall remain in full force and effect. The masculine
pronoun, as used in the By-Laws, means the masculine and feminine wherever
applicable.

                  B.  Insurance

                  The Company may purchase and maintain insurance on behalf of
any person described in Section 21 against any liability or expense (including
attorney fees) which may be asserted against such person whether or not the
Company would have the power to indemnify such person against such liability or
expense under this Section 21 or otherwise.

                  Section 22. The Board of Directors are authorized to select
such depositaries as they shall deem proper for the funds of the corporation.
All checks and drafts against such deposited funds shall be signed by such
officers or such other persons as may be specified by the Board of Directors.

                  Section 23. The corporate seal shall be circular in form, and
shall have inscribed thereon the name of the corporation, followed by the word
"Maine" and shall have the word "Seal" inscribed in the center thereof.

                  Section 24. A director of this corporation shall not be
disqualified by his office from dealing or contracting with the corporation,
either as vendor, purchaser or otherwise, nor shall any transaction or contract
of this corporation be void or voidable by reason of the fact that any director


July 26, 2002                        8




or any firm of which any director is a member or any corporation of which any
director is a shareholder or director is in any way interested in such
transaction or contract, provided that such transaction or contract is or shall
be authorized, ratified or approved either (a) by vote of a majority of a quorum
of the Board of Directors or the executive committee, without counting in such
majority or quorum any directors so interested or being a member of a firm so
interested or a shareholder or director of a corporation so interested, or (b)
by vote at a stockholders' meeting of the holders of a majority of all the
outstanding shares of the stock of the corporation entitled to vote or by a
writing or writings signed by a majority of such holders; nor shall any director
be liable to account to the corporation for any profit realized by him from or
through any transaction or contract of this corporation authorized, ratified or
approved as aforesaid, by reason of the fact that he or any firm of which he is
a member or any corporation of which he is a shareholder or director was
interested in such transaction or contract. Nothing herein contained shall
create any liability in the events above described or prevent the authorization,
ratification or approval of such contracts or transactions in any other manner
provided by law.

                  Section 25. These by-laws may be altered or amended (a) by a
majority vote of the outstanding stock entitled to vote at any annual meeting or
upon notice at any special meeting of stockholders, or (b) at any meeting of the
Board of Directors by a majority vote of the entire Board then in office.


July 26, 2002                        9

EX-99

                                                                      Exhibit G


                               Gulf Power Company
                         Proposed Notice of Proceedings


         Gulf Power Company ("Gulf"), a wholly-owned subsidiary of The Southern
Company ("Southern"), a registered holding company under the Public Utility
Holding Company Act of 1935, as amended (the "Act"), has filed an
application-declaration (the "Application") under Sections 6(a), 7, 9 and 12 of
the Act and Rules 23, 42, 44 and 54 thereunder.

Revenue Bonds

         Gulf proposes to incur, from time to time or at any time on or before
March 31, 2006, obligations in connection with the issuance and sale by public
instrumentalities of revenue bonds in an aggregate principal amount of not to
exceed $180,000,000.

         Each issue of the proposed pollution control revenue bonds will be
issued for the financing or refinancing of the costs of certain air and water
pollution control facilities and sewage and solid waste disposal facilities at
one or more of Gulf's electric generating plants or other facilities located in
various counties. It is proposed that each such county or the otherwise
appropriate public body or instrumentality (the "County") will issue its revenue
bonds (the "Revenue Bonds") to finance or refinance the costs of the
acquisition, construction, installation and equipping of said facilities at the
plant or other facility located in its jurisdiction (the "Project"). Each County
is authorized by relevant state law to issue its Revenue Bonds for such
purposes.

         While the actual amount of Revenue Bonds to be issued by each County
has not yet been determined, such amount will be based upon the cost of
refunding outstanding bonds or the cost of the Project located in its
jurisdiction.

         Gulf proposes to enter into a Loan or Installment Sale Agreement with
the County, relating to each issue of the Revenue Bonds (the "Agreement"). Under
the Agreement, the County will loan to Gulf the proceeds of the sale of the
County's Revenue Bonds, and Gulf may issue a non-negotiable promissory note
therefor (the "Note"), or the County will undertake to purchase and sell the
related Project to Gulf. The installment sale structure may be used because it
is required by applicable state law or to the extent it affords transactional
advantages to Gulf. Such proceeds will be deposited with a Trustee (the
"Trustee") under an indenture to be entered into between the County and such
Trustee (the "Trust Indenture"), pursuant to which such Revenue Bonds are to be
issued and secured, and will be applied by Gulf to payment of the Cost of
Construction (as defined in the Agreement) of the Project or to refund
outstanding pollution control revenue obligations.

         The Note or the Agreement will provide for payments to be made by Gulf
at times and in amounts which shall correspond to the payments with respect to
the principal of, premium, if any, and interest on the related Revenue Bonds
whenever and in whatever manner the same shall become due, whether at stated
maturity, upon redemption or declaration or otherwise.

         The Agreement will provide for the assignment to the Trustee of the
County's interest in, and of the moneys receivable by the County under, the
Agreement and the Note. The Agreement will also obligate Gulf to pay the fees
and charges of the Trustee and may provide that Gulf may at any time, so long as
it is not in default thereunder, prepay the amount due under the Agreement in
whole or in part, such payment to be sufficient to redeem or purchase
outstanding Revenue Bonds in the manner and to the extent provided in the Trust
Indenture.

         The Trust Indenture will provide that the Revenue Bonds issued
thereunder will be redeemable (i) at any time on or after a specified date from
the date of issuance, in whole or in part, at the option of Gulf, and may
require the payment of a premium at a specified percentage of the principal
amount which may decline annually thereafter, and (ii) in whole, at the option
of Gulf, in certain other cases of undue burdens or excessive liabilities
imposed with respect to the related Project, its destruction or damage beyond
practicable or desirable repairability or condemnation or taking by eminent
domain, or if operation of the related facility is enjoined and Gulf determines
to discontinue operation thereof, such redemption of all such outstanding
Revenue Bonds to be at the principal amount thereof plus accrued interest, but
without premium. It is proposed that the Revenue Bonds will mature not more than
40 years from the first day of the month in which they are initially issued and
may, if it is deemed advisable for purposes of the marketability of the Revenue
Bonds, be entitled to the benefit of a mandatory redemption sinking fund
calculated to retire a portion of the aggregate principal amount of the Revenue
Bonds prior to maturity.

         The Trust Indenture and the Agreement may give the holders of the
Revenue Bonds the right, during such time as the Revenue Bonds bear interest at
a fluctuating rate or otherwise, to require Gulf to purchase the Revenue Bonds
from time to time, and arrangements may be made for the remarketing of any such
Revenue Bonds through a remarketing agent. Gulf also may be required to purchase
the Revenue Bonds, or the Revenue Bonds may be subject to mandatory redemption,
at any time if the interest thereon is determined to be subject to federal
income tax. Also in the event of taxability, interest on the Revenue Bonds may
be effectively converted to a higher variable or fixed rate, and Gulf also may
be required to indemnify the bondholders against any other additions to
interest, penalties and additions to tax; such terms are not considered to
constitute the issuance of a separate security under Sections 6(a) and 7 of the
Act, but rather possible additional terms of the Revenue Bonds and Gulf's
obligations with respect thereto.

         In order to obtain the benefit of ratings for the Revenue Bonds
equivalent to the rating of Gulf's first mortgage bonds outstanding under the
indenture dated as of September 1, 1941 between Gulf and JPMorgan Chase Bank
(formerly The Chase Manhattan Bank), as trustee, as supplemented and amended
(the "Mortgage"), which ratings Gulf has been advised may be thus attained, Gulf
may determine to secure its obligations under the Note and the related Agreement
by delivering to the Trustee, to be held as collateral, a series of its first
mortgage bonds (the "Collateral Bonds") in principal amount either (i) equal to
the principal amount of the Revenue Bonds or (ii) equal to the sum of such
principal amount of the Revenue Bonds plus interest payments thereon for a
specified period. Such series of Collateral Bonds will be issued under an
indenture supplemental to the Mortgage (the "Supplemental Indenture"), will
mature on the maturity date of such Revenue Bonds and will be non-transferable
by the Trustee. The Collateral Bonds, in the case of clause (i) above, would
bear interest at a rate or rates equal to the interest rate or rates to be borne
by the related Revenue Bonds and, in the case of clause (ii) above, would be
non-interest bearing.

         The Supplemental Indenture will provide, however, that the obligation
of Gulf to make payments with respect to the Collateral Bonds will be satisfied
to the extent that payments are made under the Note or the Agreement sufficient
to meet payments when due in respect of the related Revenue Bonds. The
Supplemental Indenture will provide that, upon acceleration by the Trustee of
the principal amount of all related outstanding Revenue Bonds under the Trust
Indenture, the Trustee may demand the mandatory redemption of the related
Collateral Bonds then held by it as collateral at a redemption price equal to
the principal amount thereof plus accrued interest, if any, to the date fixed
for redemption. The Supplemental Indenture may also provide that, upon the
optional redemption of the Revenue Bonds, in whole or in part, a related
principal amount of the Collateral Bonds will be redeemed at the redemption
price of the Revenue Bonds.

         In the case of interest bearing Collateral Bonds, because interest
accrues in respect of such Collateral Bonds until satisfied by payments under
the Note or the Agreement, "annual interest charges" in respect of such
Collateral Bonds will be included in computing the "interest earnings
requirement" of the Mortgage which restricts the amount of first mortgage bonds
which may be issued and sold to the public in relation to Gulf's net earnings.
In the case of non-interest bearing Collateral Bonds, since no interest would
accrue in respect of such Collateral Bonds, the "interest earnings requirement"
would be unaffected.

         The Trust Indenture will provide that, upon deposit with the Trustee of
funds sufficient to pay or redeem all or any part of the related Revenue Bonds,
or upon direction to the Trustee by Gulf to so apply funds available therefor,
or upon delivery of such outstanding Revenue Bonds to the Trustee by or for the
account of Gulf, the Trustee will be obligated to deliver to Gulf the Collateral
Bonds then held as collateral in an aggregate principal amount as they relate to
the aggregate principal amount of such Revenue Bonds for the payment or
redemption of which such funds have been deposited or applied or which shall
have been so delivered.

         As an alternative to or in conjunction with Gulf's securing its
obligations through the issuance of the Collateral Bonds as above described,
Gulf may cause an irrevocable Letter of Credit or other credit facility (the
"Letter of Credit") of a bank or other financial institution (the "Bank") to be
delivered to the Trustee. The Letter of Credit would be an irrevocable
obligation of the Bank to pay to the Trustee, upon request, up to an amount
necessary in order to pay principal of and accrued interest on the Revenue Bonds
when due. Pursuant to a separate agreement with the Bank, Gulf would agree to
pay to the Bank, on demand or pursuant to a borrowing under such agreement, all
amounts that are drawn under the Letter of Credit, as well as certain fees and
expenses. Such delivery of the Letter of Credit to the Trustee would obtain for
the Revenue Bonds the benefit of a rating equivalent to the credit rating of the
Bank. In the event that the Letter of Credit is delivered to the Trustee as an
alternative to the issuance of the Collateral Bonds, Gulf may also convey to the
County a subordinated security interest in the Project or other property of Gulf
as further security for Gulf's obligations under the Agreement and the Note.
Such subordinated security interest would be assigned by the County to the
Trustee.

         As a further alternative to, or in conjunction with, securing its
obligations under the Agreement and Note as above described, and in order to
obtain a "AAA" rating for the Revenue Bonds by one or more nationally recognized
securities rating services, Gulf may cause an insurance company to issue a
policy of insurance guaranteeing the payment when due of the principal of and
interest on such series of the Revenue Bonds. Such insurance policy would extend
for the term of the related Revenue Bonds and would be non-cancelable by the
insurance company for any reason. Gulf's payment of the premium with respect to
said insurance policy could be in various forms, including a non-refundable,
one-time insurance premium paid at the time the policies are issued, and/or an
additional interest percentage to be paid to said insurer in correlation with
regular interest payments. In addition, Gulf may be obligated to make payments
of certain specified amounts into separate escrow funds and to increase the
amounts on deposit in such funds under certain circumstances. The amount in each
escrow fund would be payable to the insurance company as indemnity for any
amounts paid pursuant to the related insurance policy in respect of principal of
or interest on the related Revenue Bonds.

         It is contemplated that the Revenue Bonds will be sold by the County
pursuant to arrangements with one or more purchasers, placement agents or
underwriters. In accordance with applicable state laws, the interest rate to be
borne by the Revenue Bonds will be approved by the County and will be either a
fixed rate, which fixed rate may be convertible to a rate which will fluctuate
in accordance with a specified prime or base rate or rates or may be determined
pursuant to certain remarketing or auction procedures, or a fluctuating rate,
which fluctuating rate may be convertible to a fixed rate. While Gulf may not be
party to the purchase, placement or underwriting arrangements for the Revenue
Bonds, such arrangements will provide that the terms of the Revenue Bonds and
their sale by the County shall be satisfactory to Gulf. Bond Counsel will issue
an opinion that, based upon existing law, interest on the Revenue Bonds will
generally be excludable from gross income for federal income tax purposes. Gulf
has been advised that the interest rates on obligations, the interest on which
is tax exempt, recently have been and can be expected at the time of issue of
the Revenue Bonds to be lower than the rates on obligations of like tenor and
comparable quality, interest on which is fully subject to federal income
taxation.

         The effective cost to Gulf of any series of the Revenue Bonds will not
exceed the greater of (i) 200 basis points over comparable term U.S. Treasury
securities, or (ii) a gross spread over such Treasury securities which is
consistent with comparable securities. Such effective cost will reflect the
applicable interest rate or rates and any underwriters' discount or commission.

         The premium (if any) payable upon the redemption of any Revenue Bonds
at the option of Gulf will not exceed the greater of (i) 5% of the principal
amount of the Revenue Bonds so to be redeemed, or (ii) a percentage of such
principal amount equal to the rate of interest per annum borne by such Revenue
Bonds.

         The purchase price payable by or on behalf of Gulf in respect of
Revenue Bonds tendered for purchase at the option of the holders thereof will
not exceed 100% of the principal amount thereof, plus accrued interest to the
purchase date.

         Any Letter of Credit issued as security for the payment of Revenue
Bonds will be issued pursuant to a Reimbursement Agreement between Gulf and the
financial institution issuing such Letter of Credit. Pursuant to the
Reimbursement Agreement, Gulf will agree to pay or cause to be paid to the
financial institution, on each date that any amount is drawn under such
institution's Letter of Credit, an amount equal to the amount of such drawing,
whether by cash or by means of a borrowing from such institution pursuant to the
Reimbursement Agreement. Any such borrowing may have a term of up to 10 years
and will bear interest at the lending institution's prevailing rate offered to
corporate borrowers of similar quality which will not exceed (i) the London
Interbank Offered Rate plus up to 3%, (ii) the lending institution's certificate
of deposit rate plus up to 2-3/4%, or (iii) a rate not to exceed the prime rate
plus 1%, to be established by agreement with the lending institution prior to
the borrowing.

Senior Notes

         Gulf seeks authorization to issue and sell at any time or from time to
time in one or more series from the period beginning with the effective date of
an order issued in this proceeding through March 31, 2006 up to $450 million
aggregate principal amount of its senior debentures, senior promissory notes or
other senior debt instruments (individually, a "Senior Note" and collectively,
the "Senior Notes") governed by an indenture or other document. Gulf requests
authority to issue and sell Senior Notes pursuant to the authority requested
herein without additional prior Securities and Exchange Commission (the
"Commission") approval if Gulf is within the parameters discussed in the
Application. The provisions of each series of Senior Notes and related
instruments would be determined at the time of the sale of such series of Senior
Notes.

         Gulf requests authority to issue Senior Notes for which the specific
terms and conditions are not currently known, subject to the following
parameters:

         (a) The effective cost of money on Senior Notes issued pursuant to the
Application will not exceed the greater of (i) 300 basis points over comparable
term U.S. Treasury securities, or (ii) a gross spread over such Treasury
securities which is consistent with comparable securities.

         (b) The maturity of the Senior Notes will not exceed approximately 50
years.

         (c) The interest rate on each issue of Senior Notes may be either a
fixed rate or an adjustable rate to be determined on a periodic basis by auction
or remarketing procedures, in accordance with formula or formulae based upon
certain reference rates, or by other predetermined methods.

         (d) The Senior Notes will be direct, unsecured and unsubordinated
obligations of Gulf ranking pari passu with all other unsecured and
unsubordinated obligations of Gulf. The Senior Notes will be effectively
subordinated to all secured debt of Gulf, including its first mortgage bonds.

         (e) The underwriting fees, commissions, or other similar expenses paid
in connection with the issue, sale or distribution of the Senior Notes of each
series pursuant to the Application will not exceed 5% of the aggregate principal
amount of such series.

         The Senior Notes will be sold in any of the following ways: (i) through
underwriters or dealers; (ii) directly to a limited number of purchasers or to a
single purchaser, or (iii) through agents or dealers. If underwriters are used
in the sale of the Senior Notes, such Senior Notes will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The Senior Notes may
be offered to the public either through underwriting syndicates (which may be
represented by managing underwriters) or directly by one or more underwriters
acting alone. The Senior Notes may be sold directly by Gulf or through agents
designated from time to time. If dealers are used in the sale of any Senior
Notes, such Senior Notes will be sold to the dealers as principal. Any dealer
may then resell such Senior Notes to the public at varying prices to be
determined by such dealer at the time of resale.

         Senior Notes may be sold pursuant to "delayed delivery contracts" which
permit the underwriters to locate buyers who will agree to buy the Senior Notes
at the same price but at a later date than the date of the closing of the sale
to the underwriters. Senior Notes may also be sold through the use of
medium-term note and similar programs, including in transactions covered by Rule
144A under the Securities Act of 1933, as amended.

         Any Senior Notes would have such designations, aggregate principal
amount, maturity, interest rate(s) or methods of determining the same, interest
payment terms, redemption provisions, non-refunding provisions, sinking fund
terms, conversion or put terms and other terms and conditions as Gulf may
determine at the time of issuance.

First Mortgage Bonds

         It is proposed that each series of Gulf's first mortgage bonds (the
"new Bonds") will have a term of not more than 40 years and will be sold for the
best price obtainable but for a price to Gulf of not less than 98% nor more than
101-3/4% of the principal amount thereof, plus accrued interest (if any).

         The new Bonds will be issued under the Mortgage as heretofore
supplemented by various indentures supplemental thereto, and as to be further
supplemented by a Supplemental Indenture providing for each series of the new
Bonds to be issued.

         Gulf may provide that none of the new Bonds of any series will be
redeemed for a five-year or other period commencing on or about the first day of
the month of issuance at a regular redemption price if such redemption is for
the purpose or in anticipation of refunding such new Bonds through the use,
directly or indirectly, of funds borrowed by Gulf at an effective interest cost
to Gulf (computed in accordance with generally accepted financial practice) of
less than the effective interest cost to Gulf of the new Bonds of such series.
Such limitation will not apply to redemptions at a special redemption price by
operation of the improvement fund or the replacement provisions of the Mortgage
or by the use of proceeds of released property.

         Gulf may covenant that it will not redeem the new Bonds of any series,
in any year prior to the fifth or other specified year after the issuance of
such series, through the operation of the improvement fund provisions of the
Mortgage in a principal amount which would exceed 1% of the initial aggregate
principal amount of such series.

         Gulf also may covenant that it will not, in any calendar year, redeem
the new Bonds of any series through the operation of the replacement provisions
of the Mortgage in a principal amount which would exceed 1% of the initial
aggregate principal amount of such series.

         In addition, Gulf may make provision for a mandatory cash sinking fund
for the benefit of any series of the new Bonds. In connection therewith, Gulf
may have the non-cumulative option in any year of making an optional sinking
fund payment in an amount not exceeding such mandatory sinking fund payment.

         In order to enhance the marketability of the new Bonds, it may be
desirable to cause an insurance company to issue a policy of insurance for the
payment when due of the new Bonds of a particular series. It also may be
desirable that the terms of the new Bonds, or any series thereof, provide for an
adjustable interest rate thereon to be determined on a periodic basis, rather
than a fixed interest rate. In such event, it is proposed that the rate of
interest on such new Bonds for an initial period would be a fixed rate per
annum. Periodically thereafter, the interest rate would be adjusted by periodic
auction or remarketing procedures, or in accordance with a formula or formulae
based upon certain reference rates, or by other predetermined methods.

         In connection with any such adjustable rate issue, it is proposed that
such series of the new Bonds may not be redeemable at the option of Gulf during
certain short-term interest periods. It is further proposed that the
non-refunding limitation described above, as well as the restriction on
redemptions through operation of the improvement fund provisions, may apply with
respect to each long-term interest period commencing with the first day of the
month in which any such interest period begins.

Preferred Stock

         It is proposed that each issuance of Gulf's preferred stock, par or
stated value of up to $100 per share (the "new Preferred Stock"), will be sold
for the best price obtainable (after giving effect to the purchasers'
compensation) but for a price to Gulf (before giving effect to such purchasers'
compensation) of not less than 100% of the par or stated value per share.

         The authorized number of shares of preferred stock of Gulf may be
increased by amendment to the Articles of Incorporation of Gulf and the new
Preferred Stock of each series will be created, and its terms established, by
resolution of the board of directors of Gulf which when filed with the Secretary
of State of Maine will constitute an amendment to the Charter of Gulf. Gulf may
make provision for a cumulative sinking fund for the benefit of a particular
series of the new Preferred Stock which would retire a certain number of shares
of such series annually, commencing at a specified date after the sale. In
connection therewith, Gulf may have the non-cumulative option of redeeming up to
an additional like number of shares of such series annually.

         Gulf may provide that no share of a particular series of the new
Preferred Stock will be redeemed for a five-year or other period commencing on
or about the first day of the month of issuance, if such redemption is for the
purpose or in anticipation of refunding such share directly or indirectly
through the incurring of debt, or through the issuance of stock ranking equally
with or prior to the new Preferred Stock as to dividends or assets, if such debt
has an effective interest cost to Gulf (computed in accordance with generally
accepted financial practice) or such stock has an effective dividend cost to
Gulf (so computed) of less than the effective dividend cost to Gulf of the
respective series of the new Preferred Stock.

         Gulf may determine that, in light of the current market conditions at
the time any series of the new Preferred Stock is offered, it is in the best
interest of Gulf and its investors and consumers that the terms of such new
Preferred Stock provide for an adjustable dividend rate thereon to be determined
on a periodic basis, rather than a fixed rate dividend. In such event, it is
proposed that the rate of dividends on such new Preferred Stock for an initial
period would be a fixed amount or rate per annum. Periodically thereafter, the
rate would be adjusted by periodic auction or remarketing procedures, or in
accordance with a formula or formulae based upon certain reference rates, or by
other predetermined methods.

         Gulf may determine to use the proceeds from the sale of the Revenue
Bonds, the Senior Notes, the new Bonds and the new Preferred Stock to redeem or
otherwise retire its outstanding senior notes, first mortgage bonds, pollution
control bonds and/or preferred stock if such use is considered advisable. To the
extent that the redemption or other retirement of outstanding preferred stock
using the proceeds from security sales as proposed herein may require
authorization under Section 12(c) of the Act, Gulf hereby requests such
authorization. Gulf also proposes that it may use the proceeds from the sale of
the Senior Notes, the new Bonds and new Preferred Stock, along with other funds,
to pay a portion of its cash requirements to carry on its electric utility
business.

         Pursuant to orders of the Commission, Gulf has authority to issue and
sell $350,000,000 of senior notes (of which, $280,000,000 has been sold),
$400,000,000 of first mortgage bonds and/or preferred stock and $200,000,000 of
pollution control revenue bonds (of which, $95,930,000 has been sold) as set
forth in Commission File No. 70-9171 (HCAR No. 35-26870, dated May 14, 1998) and
in Commission File No. 70-8949 (HCAR No. 35-26736, dated June 30, 1997). Gulf
hereby requests that the authority described in the above-mentioned orders
remain in effect until such time as the order with respect to the matters
requested herein is issued.

         For the Commission, by the Division of Investment Management, pursuant
to delegated authority.