Bond Company Description

Securities offered

$380,300,000 Senior Secured Consumer Rate Relief Bonds, scheduled to pay principal semi-annually and sequentially in accordance with the expected sinking fund schedule.

Issuing Entity and Capital Structure

Appalachian Consumer Rate Relief Funding LLC is a special purpose Delaware limited liability company. Appalachian Power Company is our sole member and owns all of our equity interests. We have no commercial operations. We were formed solely to purchase and own CRR property, to issue the bonds and to perform activities incidental thereto. Please read “Appalachian Consumer Rate Relief Funding LLC, the Issuing Entity” in the accompanying prospectus.

In addition to the CRR property, we will be capitalized with an upfront cash deposit equity contribution from APCo equal to 0.5% of the bonds’ initial principal amount issued (held in the capital subaccount) and will have an excess funds subaccount to retain any amounts collected and remaining on a payment date after all payments on the bonds and all ongoing financing costs have been made.

Purpose of transaction

This issuance of the bonds will enable APCo to recover certain uncollected ENEC costs and associated financing costs in the State of West Virginia. Please read “The Recovery Act” in the accompanying prospectus.

State pledge

The State of West Virginia has pledged in the Recovery Act to bondholders, assignees and financing parties under the financing order that it will not take or permit any action that would impair the value of the CRR property or revise the consumer rate relief costs for which recovery is authorized under the financing order or, except for the specified true-up adjustments to correct any overcollections or undercollections, reduce, alter or impair the CRR charges until all principal and interest in respect of the bonds and all financing costs and all amounts to be paid to an assignee or financing party under an ancillary agreement are paid or performed in full. No voter initiative or referendum process exists in West Virginia, unlike in some other states. Please read “The Recovery Act—APCo and Other Utilities May Securitize Consumer Rate Relief Costs” in the accompanying prospectus.

Our address

One Riverside Plaza
Columbus, Ohio 43215

Our Telephone Number

(614) 716-3627