-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, SrZw6jv4+xru4+2YlitpI7c9Di2XA6nldbvHC3jPq3bkCjWcjYOBQARUWHTr+NnK Y8OxyFBvlpj3/nuN6OsCWA== 0000006879-95-000018.txt : 199507030000006879-95-000018.hdr.sgml : 19950703 ACCESSION NUMBER: 0000006879-95-000018 CONFORMED SUBMISSION TYPE: U-1/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950630 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: APPALACHIAN POWER CO CENTRAL INDEX KEY: 0000006879 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 540124790 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-1/A SEC ACT: 1935 Act SEC FILE NUMBER: 070-08615 FILM NUMBER: 95551621 BUSINESS ADDRESS: STREET 1: 40 FRANKLIN RD SW CITY: ROANOKE STATE: VA ZIP: 24011 BUSINESS PHONE: 7039852300 MAIL ADDRESS: STREET 1: 1 RIVERSIDE PLAZA CITY: COLUMBUS STATE: OH ZIP: 43215 U-1/A 1 APCO/SACCO SALE TO BATTLE RIDGE File No. 70-8615 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________ Amendment No. 3 to FORM U-1 __________________________________ APPLICATION OR DECLARATION under the PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 * * * APPALACHIAN POWER COMPANY 40 Franklin Road, Roanoke, Virginia 24022 SOUTHERN APPALACHIAN POWER COMPANY 40 Franklin Road, Roanoke, Virginia 24022 (Name of companies filing this statement and addresses of principal executive offices) * * * AMERICAN ELECTRIC POWER COMPANY, INC. 1 Riverside Plaza, Columbus, Ohio 43215 (Name of top registered holding company parent of each applicant or declarant) * * * G. P. Maloney, Executive Vice President AMERICAN ELECTRIC POWER SERVICE CORPORATION 1 Riverside Plaza, Columbus, Ohio 43215 John F. DiLorenzo, Jr., Associate General Counsel AMERICAN ELECTRIC POWER SERVICE CORPORATION 1 Riverside Plaza, Columbus, Ohio 43215 (Names and addresses of agents for service) Appalachian Power Company ("APCo") and Southern Appalachian Coal Company ("SACCo") hereby amend their Application/Declaration on Form U-1 in File No. 70-8615 by supplying the following exhibits to Item 6. Exhibits and Financial Statements: Exhibit D-1 Petition to West Virginia Public Service Commission Exhibit D-3 Order of West Virginia Public Service Commission Exhibit D-4 Order of Virginia State Corporation Commission SIGNATURE Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned companies have duly caused this Amendment No. 3 to Form U-1 to be signed on their behalf by the undersigned thereunto duly authorized. APPALACHIAN POWER COMPANY SOUTHERN APPALACHIAN POWER COMPANY By:___/s/ G. P. Maloney___________ G. P. Maloney, Vice President Date: June 30, 1995 [95FN0061.APC] /PAGE EXHIBIT D-1 PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON CASE NO. 95-0337-8-PC APPALACHIAN POWER COMPANY, a corporation, Petition for the Commission's consent and approval of the sale and transfer to Whites Creek Limited Liability Company of certain real property, facilities, equipment, and permits, pursuant to the provisions of W. Va. Code, Section 24-2-12. PETITION Comes now the above-named Appalachian Power Company ("Appalachian"), the petitioner herein, and respectfully makes the following representations to the Commission: 1. The name of the petitioner is Appalachian Power Company, and its address is 40 Franklin Road, Roanoke, Virginia 24011. 2. The name and address of the entity to which Appalachian and its wholly-owned subsidiary, Southern Appalachian Coal Company ("Southern"), propose to sell and/or transfer real property, facilities, equipment, and permits are as follows: Whites Creek Limited Liability Company 1000 River East Drive Belle, West Virginia 25015 Southern is a West Virginia corporation. Whites Creek Limited Liability Company ("Whites Creek") is a West Virginia limited liability company, created pursuant to W. Va. Code, Sections 31- 1A-1 et seq. Appalachian seeks exemption from the requirement of providing copies of Southern's and Whites Creek's articles of incorporation. 3. Appalachian and Southern propose to sell and/or transfer to Whites Creek certain real property, including coal lands and docking facilities, certain coal handling and preparation facilities, certain fixed assets and improvements, certain coal mining equipment, certain environmental (and other) permits, and certain other property, rights, and interests. 4. The estimated sales price which Appalachian and Southern propose to charge for the items specified in Paragraph 3 hereof is Six Million Fifty Thousand Dollars ($6,050,000.00), subject to certain adjustments, of which One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) will be paid at closing in immediately available funds, and the remainder shall be secured by an irrevocable letter of credit and bear interest at approximately eight percent (8%) per annum and be paid in forty (40) equal quarterly installments of principal and interest of One Hundred Seventy-Five Thousand Dollars ($175,000.00) each, over the period September 30, 1995 through June 30, 2005. Alternatively, Whites Creek has the option to pay the entire purchase price at closing. 5. The terms and conditions of the proposed transaction are set forth in detail in the attached Agreement of Purchase and Sale, dated as of March 22, 1995, among Southern Appalachian Coal Company, Appalachian Power Company, and Whites Creek Limited Liability Company, and in the attached First Addendum to Agreement of Purchase and Sale, of like date, among the same parties. 6. The financial condition of Appalachian is well known to the Commission. The Commission is familiar with the assets and obligations of Southern from Case No. 84-065-E-PC, in which the Commission approved the sale of the "Julian" portion of the real property, fixed assets, mineral rights, and associated permits and agreements owned or controlled by Southern and Appalachian. Whites Creek is not subject to the Commission's jurisdiction, and since its obligations to Appalachian and Southern will either be discharged at closing or secured by an irrevocable letter of credit, its financial condition is of no relevance. For these reasons, Appalachian requests that it, Southern, and Whites Creek be exempted from the provisions of Rule 21 of the Commission's Rules of Practice and Procedure. 7. The effect of the transaction described above will be to enable Appalachian to realize the value of substantially all of the remaining coal-mining assets which were not disposed of in the transactions approved in Case No. 84-065-E-PC. 8. The Commission should give its consent and approval to the transaction proposed herein for the following reasons: The Commission has previously approved Appalachian's decision, made over a decade ago, to get out of the affiliated coal mining business. The Commission specifically approved in Case No. 84-065- E-PC the disposition of the bulk of the coal mining assets owned by Appalachian and its three wholly-owned mining subsidiaries. In the petition in that case, Appalachian informed the Commission that "[n]egotiations are under way with other parties in connection with the disposition of the remaining assets associated with Southern's mining operations." (February 7, 1984 Petition, p.3., fn.) At this point Appalachian has been successful in negotiating a transaction which accomplishes that purpose, which the Commission should approve as the prudent and logical culmination of the actions taken by Appalachian and its subsidiaries, with the Commission's endorsement, to divest themselves of their coal mining assets. 9. The terms and conditions of the transaction proposed herein are fair and reasonable. The transaction does not confer upon any party thereto an undue advantage over any other party thereto, and does not adversely affect the public in West Virginia. To the best of Appalachian's knowledge, the proposed transaction will have no effect on other utilities in West Virginia. WHEREFORE, Appalachian respectfully requests the Commission to enter an order granting its consent and approval for Appalachian and its affiliates to make the sale and/or transfer which is proposed herein. Appalachian asks the Commission to take this action as promptly as possible since the closing is scheduled to take place no later than June 30, 1995. Respectfully submitted, APPALACHIAN POWER COMPANY By Counsel /s/ William C. Porth William C. Porth ROBINSON & McELWEE Post Office Box 1791 Charleston, West Virginia 25326 Counsel for Appalachian Power Company VERIFICATION STATE OF WEST VIRGINIA, ) COUNTY OF KANAWHA ) William C. Porth, counsel for Appalachian Power Company, the Petitioner in the foregoing Petition of Appalachian Power Company, being duly sworn, states upon his information and belief that the facts and allegations therein are true. /s/ William C. Porth William C. Porth Taken, subscribed and sworn to before me on the 26th day of April, 1995. My commission expires: August 18, 2003. /s/ Annetta Sue Bonham Notary Public /PAGE EXHIBIT D-3 PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON At a session of the Public Service Commission of West Virginia, in the City of Charleston, on the 30th day of June, 1995. CASE NO. 95-0337-E-PC APPALACHIAN POWER COMPANY Petition for consent and approval of the sale to Whites Creek Limited Liability Company of certain real property, facilities, equipment and permits. COMMISSION ORDER On April 26, 1995, Appalachian Power Company (Appalachian) petitioned for consent and approval of the sale of certain real property interests located in Kanawha and Boone counties, West Virginia, to Whites Creek Limited Liability Company (Whites Creek). In the same transaction, Appalachian's wholly-owned subsidiary, Southern Appalachian Coal Company (Southern), would sell to Whites Creek certain coal handling and preparation plant facilities, together with certain fixed assets and improvements and other coal mining equipment located on Appalachian's real property interests. In addition, Southern would transfer to Whites Creek its various reclamation, pollutant discharge, pollution control and facilities permits applicable to coal mining, preparation and transportation. Appalachian requested expedited consideration due to the closeness of the June 30, 1995, closing date. With its petition, Appalachian filed a copy of the Agreement of Purchase and Sale dated March 22, 1995, among Southern, Appalachian and Whites Creek (Sales Contract), without exhibits. Appalachian also filed the first addendum, to which was attached an unexecuted Guaranty Agreement by which Whites Creek's performance was to be guaranteed for five years by August Enterprises, Ltd. up to $500,000. On June 16, 1995, Appalachian filed a supplemental petition and the second and third addenda to the Sales Contract. As amended, the transaction was restructured so that Battle Ridge Companies, Inc. (Battle Ridge), an affiliate of Whites Creek, would receive all of the properties, assets and equipment except the permits and that Whites Creek would receive the permits. In addition, the $6,050,000 purchase price would be paid in cash at closing, and Battle Ridge would become the guarantor of Whites Creek's performance, instead of August Enterprises, Inc. On May 2, 1984, as amended by a August 9, 1984, order, the Commission consented to the sale of the majority of Appalachian's affiliated coal properties in Appalachian Power Co., Case No. 84- 065-E-PC. In support of the 1995 petition, Appalachian alleged that the proposed sale would allow Appalachian to divest itself, and realize the value, of substantially all the remaining coal- mining assets which were not disposed of in the transactions approved in 1984. Furthermore, the terms and conditions were fair and reasonable, no party had an undue advantage over any other, the sale did not adversely affect the public in West Virginia, and, to the best of its knowledge, there was no effect on other utilities, Appalachian stated. By letter dated June 28, 1995, Appalachian's counsel advised the Commission that Appalachian had "evaluated the financial condition of Battle Ridge, reviewed pertinent financial information, and otherwise satisfied [itself] that the financial strength of Battle Ridge is sufficient to provide the protection bargained for under the [Sales Contract] and the Guaranty Agreement executed by Battle Ridge." In its June 2, 1995, Initial and Final Joint Staff Memorandum, Commission Staff (Staff) recommended approval, advising that the terms and conditions appeared fair and reasonable, no party had an undue advantage over any other, and the sale did not adversely affect the public. Staff restated that Appalachian believed that there was no effect on other utilities. In a June 23, 1995, Further Final Joint Staff Memorandum, Staff recommended approval of the transaction as amended by the second and third addenda. In addition to consent and approval to enter into the Sales Contract, as amended, Appalachian sought several waivers. First, without citing any particular rule, Appalachian requested a waiver of "the requirement of providing copies of Southern's and Whites Creek's articles of incorporation." Rule 10.6 of the Commission's Rules of Practice and Procedure requires a selling utility to provide "the financial condition of the petitioner [and a] brief statement of the history and corporate makeup and financial condition, if available, [of the buyer]." Rule 21 of the Commission's Rules of Practice and Procedure defines "financial condition." Neither the rules cited above nor West Virginia Code Section 24-2-12, which requires Appalachian to obtain Commission approval before it sells property, requires Appalachian to file the articles of incorporation of its wholly- owned affiliate or the purchaser. Therefore, no waiver is necessary. Since Appalachian's petition was not specific as to the rules or statutes for which it sought a waiver, we have addressed the rules and statute which are most obviously applicable. If Appalachian seeks a waiver which is not specified above, it must do so by specific application naming the rule, statute or other source of the requirement. In future filings in general, and especially those in which expedited treatment is requested, the Commission asks Appalachian to be more specific. Next, Appalachian requested a waiver of providing the Rule 21 financial information for itself, Southern and the buyer, alleging that Appalachian's financial condition was well known to the Commission, that the Commission was aware of Southern's financial condition from the 1984 case, and that the buyer's financial condition was irrelevant because the buyer's financial obligations would be discharged at closing. Rule 10.6 expressly requires Appalachian to provide its financial information. We note, though, that on May 1, 1995, Appalachian filed with the Commission its 1994 annual report, which summarizes Appalachian's financial condition. Since Appalachian has so recently filed its annual report, it is reasonable to grant the requested waiver in this case. Rule 10.6 requires the financial condition of the petitioner, and Southern is not a petitioner. Therefore, no waiver is necessary as to Southern. As to the purchaser, Rule 10.6 requires the financial condition "if it is available." Appalachian did not state whether the information is available, but argued that the buyer's condition was irrelevant because the buyer's financial obligations would be discharged at closing. We do not agree that Battle Ridge's financial condition is irrelevant. Pursuant to the Sales Contract, Battle Ridge is contractually obligated to indemnify Appalachian in certain circumstances. Moreover, pursuant to the Guaranty Agreement, Battle Ridge guarantees the Whites Creek's performance for five years, up to $500,000. However, the June 28, 1995, letter, from Appalachian's counsel advises that Appalachian has reviewed Battle Ridge's financial condition and is satisfied that Battle Ridge can live up to its contractual obligations. We also note that Battle Ridge will pay the entire purchase price in cash at closing, and this cash discharge of its $6 million obligation is some evidence of its financial condition. Finally, this transaction involves non- utility assets. Therefore, all risk of loss will be borne entirely by Appalachian's shareholders. For all of these reasons, even though we do not agree that Battle Ridge's financial condition is irrelevant, we will grant the requested waiver for Battle Ridge. Again, we wish to make it abundantly clear that this transaction involves non-utility assets and West Virginia ratepayers will not bear any part of any loss which Appalachian may suffer pursuant to the transaction. Turning to Appalachian's request for consent and approval to enter into the Sales Contract, West Virginia Code Section 24-2-12 requires a public utility to receive permission from the Commission prior to selling property, in pertinent part as follows: Unless the consent and approval of the public service commission of West Virginia is first obtained: * * * (c) no public utility . . . may . . . sell . . . its . . . property or any part thereof . . . The commission may grant its consent in advance ...... upon proper showing that the terms and conditions thereof are reasonable and that neither party thereto is given an undue advantage over the other, and [the terms and conditions] do not adversely affect the public in this state. * * * [T]he commission . . shall, if the public will be convenienced thereby, enter such order as it may deem proper and as the circumstances may require, attaching thereto such conditions as it may deem proper, consent to the entering into or doing of the things herein provided, without approving the terms and conditions thereof, and thereupon it shall be lawful to do the things provided for in such order. We find persuasive Appalachian's and Staff's positions that the terms and conditions thereof are reasonable, that neither party thereto is given an undue advantage over the other, that the transaction does not adversely affect the public in this state, and that the transaction likely will have no effect on other utilities. Moreover, the general interest in the State economy may be enhanced by the transfer of these coal properties to another developer, the transaction is consistent with the 1984 Commission policy to divest Appalachian of its coal mining assets, Appalachian's financial well-being will be reinforced with the inflow of cash and correspondingly reduced need to obtain external financing, and no party opposes the transaction. Accordingly, we find that the public will be convenienced by this transaction and grant our consent and approval to enter into the Sales Contract, as amended. We find it necessary, however, to attach conditions to our consent and approval. First, because the exhibits were not attached to the Sales Contract, we have not had an opportunity to review them. Therefore, our consent and approval is conditioned upon the exhibits being consistent with the Sales Contract, as amended, which we reviewed. Second, because the Guaranty Agreement provided to us had not been executed, our consent and approval is conditioned upon the executed Guaranty Agreement being substantially similar to the draft provided to us. Finally, pursuant to the discretion accorded us in West Virginia Code Section 24-l-12, we deem it proper only to approve the entering into of the Sales Agreement, as amended, and we do not pass upon the specific terms and conditions thereof. FINDINGS OF FACT 1. On May 2, 1984, as amended by an August 9, 1984, order, the Commission consented to the sale of the majority of Appalachian's affiliated coal properties in Appalachian Power Co., Case No. 84-065-E-PC. 2. On April 26, 1995, Appalachian petitioned for consent and approval of the sale to Whites Creek of certain real property interests in Kanawha and Boone counties, West Virginia. 3. In the same transaction, Appalachian's wholly-owned subsidiary, Southern, would sell to Whites Creek certain coal handling and preparation plant facilities, together with certain fixed assets and improvements and other coal mining equipment located on Appalachian's real property interests. In addition, Southern would transfer to Whites Creek its various reclamation, pollutant discharge, pollution control and facilities permits applicable to coal mining, preparation and transportation to whites Creek. 4. In the same transaction, August Enterprises, Ltd. would guarantee Whites Creek's performance for five years, up to $500,000. 5. The proposed 1995 sale will allow Appalachian to divest itself, and realize the value, of substantially all the remaining coal-mining assets which were not disposed of in the transactions approved in 1984. 6. The closing is to occur no later than June 30, 1995. 7. Appalachian requested expedited consideration due to the closeness of the closing date. 8. Southern is not a petitioner is this case. 9. On June 16, 1995, Appalachian filed a supplemental petition, reflecting a restructured transaction in which Battle Ridge, an affiliate of Whites Creek, would receive all of the properties, assets and equipment except the permits and that Whites Creek would receive the permits. Also, the $6,050,000 purchase price would be paid in cash at closing and Battle Ridge, instead of August Enterprises, Inc., would become the guarantor of Whites Creek's performance. 10. On June 2, 1995, Staff filed its Initial and Final Joint Staff Memorandum, recommending approval because the terms and conditions appeared fair and reasonable, no party had an undue advantage over any other, and the sale did not adversely affect the public. Staff restated that Appalachian believed that there was no effect on other utilities. 11. In a Further Final Joint Staff Memorandum dated June 23, 1995, Staff recommended approval of the amended transaction. 12. The transaction involves only non-utility assets. 13. Appalachian requested a waiver of "the requirement of providing copies of Southern's and whites Creek's articles of incorporation." 14. Rule 10.6 of the Commission's Rules of Practice and Procedure requires a selling utility to provide "the financial condition of the petitioner [and a] brief statement of the history and corporate makeup and financial condition, if available, [of the buyer]." 15. Appalachian requested a waiver of providing Rule 21 financial information of itself, Southern and the purchaser, alleging that the Commission was well aware of Appalachian's financial condition, that the Commission was aware of Southern's financial condition from the 1984 case, and that the financial condition of the buyer was irrelevant because the buyer's financial obligations would be discharged at closing. 16. Rule 21 of the Commission's Rules of Practice and Procedure defines "financial condition." 17. On May 1, 1995, Appalachian filed with the Commission its 1994 annual report, which summarizes Appalachian's financial condition. 18. Appalachian has filed with the Commission the Sales Contract, without exhibits, and its first, second and third addenda. A draft Guaranty Agreement was attached to the first addendum. CONCLUSIONS OF LAW 1. Due to the June 30, 1995, closing date, Appalachian's request for expedited treatment is reasonable. 2. Neither Rule 10.6 nor Rule 21 of the Commission's Rules of Practice and Procedure requires Appalachian to file the articles of incorporation of its wholly-owned affiliate or the purchaser. 3. West Virginia Code Section 24-2-12 does not require Appalachian to file the articles of incorporation of its wholly- owned affiliate or the purchaser. 4. Since the articles of incorporation are not required to be filed by rule or statute, it is not necessary to grant a waiver. 5. Rule 10-6 requires the petitioner to provide its financial condition, as well as the financial condition of the buyer if it is available. 6. Since Appalachian, the petitioner, filed its 1994 annual report on May 1, 1995, the Commission is familiar with Appalachian's financial condition. Therefore, it is reasonable to grant the requested waiver as it pertains to Appalachian. 7. The rule does not require the financial condition of Southern because Southern is not a petitioner. 8. The financial condition of the buyer is relevant to this transaction, notwithstanding that the buyer will pay the sales price in cash at closing, because the buyer has contractually agreed to indemnify Appalachian under certain conditions and to guarantee Whites Creek's performance up to $500,000. 9. Battle Ridge's agreement to pay the entire $6 million purchase price in cash at closing is some evidence of its financial condition. 10. Appalachian's counsel's representation that Appalachian has reviewed Battle Ridge's financial condition and is satisfied that Battle Ridge can live up to its contractual obligations is some evidence of the buyer's financial condition. 11. Since this transaction concerns only non-utility assets and all risk of loss will be borne entirely by Appalachian's shareholders, evidence of the buyer's financial condition is not as critical as it might be in other circumstances. 12. For the reasons set forth in paragraphs 9, 10 and 11 above, it is reasonable to grant Appalachian's request for a waiver as it pertains to the buyer. 13. The terms and conditions of the transaction are fair and reasonable. 14. No party to the transaction has an undue advantage over any other. 15. The sale does not adversely affect the West Virginia public. 16. The sale likely will have no effect on other utilities. 17. The general interest in the State economy may be enhanced by the transfer of these coal properties to another developer. 18. The transaction is consistent with the 1984 Commission policy to divest Appalachian of its coal mining assets. 19. Appalachian's financial well-being will be reinforced with the inflow of cash and correspondingly reduced need to obtain external financing. 20. Since the transaction involves only non-utility assets, all risk of loss will be borne entirely by Appalachian's shareholders. 21. The public will benefit from Appalachian's disposition of these coal-mining interests. 22. For the reasons set forth in paragraphs 13 through 21 above, we find that a proper showing has been made under West Virginia Code Section 24-2-12 and consent and approve Appalachian entering into the Sales Contract, as amended. 23. Since we have not reviewed the Sales Contract's exhibits, it is reasonable, pursuant to the discretion accorded us in West Virginia Code Section 24-2-12, to condition our consent and approval upon the exhibits beings consistent with the Sales Contract, as amended, which we reviewed. 24. Since we have not reviewed an executed guaranty agreement, it is reasonable, pursuant to the discretion accorded us in West Virginia Code Section 24-2-12, to condition our consent and approval upon the guaranty agreement being substantially similar to the draft provided for our review. 25. Furthermore, pursuant to the discretion accorded us in West Virginia Code Section 24-2-12, we approve only Appalachian's entering into the Sales Agreement, as amended, and we do not pass upon the specific terms and conditions thereof. ORDER IN CONSIDERATION THEREOF, IT IS, THEREFORE, ORDERED that Appalachian's request for expedited consideration be and is hereby granted. IT IS FURTHER ORDERED that Appalachian's request to waive the requirement to provide articles of incorporation for Southern and the buyer be and is hereby dismissed. IT IS FURTHER ORDERED that Appalachian's request to waive the Rule 21 financial information requirement as to itself be and is hereby granted. IT IS FURTHER ORDERED that Appalachian's request to waive the Rule 21 financial information requirement as to Southern is dismissed. IT IS FURTHER ORDERED that, based upon the specific facts and circumstances of this case, Appalachian's request to waive the Rule 21 financial information requirement as to the buyer be and is hereby granted. IT IS FURTHER ORDERED that Appalachian's petition for consent and approval to enter into the Sales Contract, as amended be and is hereby granted, conditioned upon the Sales Contract exhibits being consistent with Sales Contract, as amended, that we reviewed and upon the executed Guaranty Agreement being substantially similar to the draft we reviewed. Our approval goes only to the entering into of the Sales Contract, as amended, and we do not pass upon its specific terms and conditions. IT IS FURTHER ORDERED that the Commission's Executive Secretary shall serve a copy of this order upon all parties of record by United States First Class Mail, and upon Commission Staff by hand delivery. A True Copy, Teste: ARC. /s/ Howard M. Cunningham Howard M. Cunningham Executive Secretary /PAGE EXHIBIT D-4 COMMONWEALTH OF VIRGINIA STATE CORPORATION COMMISSION AT RICHMOND, JUNE 30, 1995 APPLICATION OF CASE NO. PUA950017 APPALACHIAN POWER COMPANY For approval of its agreement to indemnify the buyer regarding the sale of mining assets ORDER GRANTING APPROVAL On April 14, 1995, Appalachian Power Company ("APCO," "Company," "Applicant") filed an application with the Commission under the Public Utilities Affiliates Act for approval of an agreement with Southern Appalachian Coal Company ("SACCO," "Affiliate"). Company states in its application that SACCO, a corporation organized and doing business under the laws of the State of West Virginia, is a wholly owned subsidiary of APCO. APCO owns all of the outstanding shares of common stock of SACCO, and no other class of stock is outstanding. SACCO is engaged in the development and mining of certain coal lands and reserves located in the State of West Virginia. As stated in the application, APCO and Affiliate have entered into an Agreement of Purchase and Sale (the "Agreement") dated March 22, 1995, with Whites Creek Limited Liability Company, a West Virginia limited liability company (the "Buyer"), with respect to most of its remaining West Virginia mining assets. Company has entered into three addendums to the Agreement dated March 22, 1995, June 2, 1995, and June 12, 1995, collectively referred to as the "Addendums." By Order dated May 29, 1984, in Case No. PUA840010, APCO was granted authority to enter into various affiliate transactions in connection with the sale of a large part of the coal mining properties owned or controlled by it. Under the Agreement, APCO and Affiliate have agreed to indemnify, defend, and save harmless the Buyer against certain liabilities and contingencies that may be asserted by employees or former employees of Affiliate against Buyer or by federal, state, or local agencies as a result of non-compliance with laws relating to mining operations. The indemnities include claims under the West Virginia Workers Compensation Act, the federal Black Lung Benefits Act, and the National Bituminous Coal Wage Agreement of 1993. Company requests approval of its agreement to indemnify the Buyer against certain liabilities and contingencies that may be asserted by employees or former employees of Affiliate. THE COMMISSION, upon consideration of the application and representations of Applicant and having been advised by its Staff, is of the opinion and finds that the above-described Agreement and Addendums would be in the public interest and should be approved. Accordingly, IT IS ORDERED: 1) That, pursuant to Section 56-77 of the Code of Virginia, Appalachian Power Company is hereby granted approval of the Agreement of Purchase and Sale with Southern Appalachian Coal Company and Whites Creek Limited Liability Company and the Addendums referred to herein; 2) That the approval granted herein shall have no ratemaking implications; 3) That the approval granted herein shall not preclude the Commission from exercising the provisions of Sections 56-78 and 56-80 of the Code of Virginia hereafter; 4) That the Commission reserves the authority to examine the books and records of any affiliate in connection with the authority granted herein whether or not such affiliate is regulated by this Commission, pursuant to Section 56-79 of the Code of Virginia; and 5) That there appearing nothing further to be done in this matter, the same be, and it hereby is, dismissed. AN ATTESTED COPY hereof shall be sent to the Applicant, care of Ann B. Graf, Senior Attorney, American Electric Power Service Corporation, 1 Riverside Plaza, Columbus, Ohio 43215-2373; and delivered to the Director of Public Utility Accounting of the Commission. A True Copy /s/ William J. Bridge Teste Clerk of the State Corporation Commission I:\FINANCE\APCO\95FN0061.APC -----END PRIVACY-ENHANCED MESSAGE-----