Financing Activities

9 Months Ended

Sep. 30, 2017

FINANCING ACTIVITIES

The disclosures in this note apply to all Registrants, unless indicated otherwise.

Long-term Debt Outstanding (Applies to AEP)

The following table details long-term debt outstanding:



Type of Debt	September 30, 2017		December 31, 2016
	(in millions)
Senior Unsecured Notes	$	16,038.6	$	14,761.0	(b)
Pollution Control Bonds	1,612.4		1,725.1
Notes Payable	224.5		326.9
Securitization Bonds	1,449.4		1,705.0
Spent Nuclear Fuel Obligation (a)	267.9		266.3
Other Long-term Debt	1,128.9		1,606.9
Total Long-term Debt Outstanding	20,721.7		20,391.2		(b)
Long-term Debt Due Within One Year	2,359.3		3,013.4		(b)
Long-term Debt	$	18,362.4	$	17,377.8	(b)

(a)

Pursuant to the Nuclear Waste Policy Act of 1982, I&M, a nuclear licensee, has an obligation to the United States Department of Energy for spent nuclear fuel disposal. The obligation includes a one-time fee for nuclear fuel consumed prior to April 7, 1983. Trust fund assets related to this obligation were $311 million and $311 million as of September 30, 2017 and December 31, 2016, respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the balance sheets.


(b)	Amounts include debt related to the Lawrenceburg Plant that has been classified as Liabilities Held for Sale on the balance sheet. See “Gavin, Waterford, Darby and Lawrenceburg Plants (Generation & Marketing Segment)” section of Note 6 for additional information.

Long-term Debt Activity

Long-term debt and other securities issued, retired and principal payments made during the first nine months of 2017 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in millions)		(%)
AEPTCo	Senior Unsecured Notes	$	125.0	3.10	2026
AEPTCo	Senior Unsecured Notes	500.0		3.75	2047
APCo	Senior Unsecured Notes	325.0		3.30	2027
I&M	Pollution Control Bonds	25.0		Variable	2019
I&M	Pollution Control Bonds	40.0		2.05	2021
I&M	Pollution Control Bonds	52.0		Variable	2021
I&M	Senior Unsecured Notes	300.0		3.75	2047
SWEPCo	Other Long-term Debt	115.0		Variable	2020

Non-Registrant:
AEP Texas	Pollution Control Bonds	60.0		1.75	2020
AEP Texas	Senior Unsecured Notes	400.0		2.40	2022
AEP Texas	Senior Unsecured Notes	300.0		3.80	2047
KPCo	Pollution Control Bonds	65.0		2.00	2020
KPCo	Senior Unsecured Notes	65.0		3.13	2024
KPCo	Senior Unsecured Notes	40.0		3.35	2027
KPCo	Senior Unsecured Notes	165.0		3.45	2029
KPCo	Senior Unsecured Notes	55.0		4.12	2047
Transource Missouri	Other Long-term Debt	7.0		Variable	2018
Transource Energy	Other Long-term Debt	132.1		Variable	2020
Total Issuances		$	2,771.1


(a)	Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in millions)		(%)
APCo	Senior Unsecured Notes	$	250.0	5.00	2017
APCo	Securitization Bonds	23.5		2.008	2024
APCo	Pollution Control Bonds	104.4		Variable	2017
I&M	Notes Payable	4.9		Variable	2017
I&M	Pollution Control Bonds	25.0		Variable	2017
I&M	Notes Payable	22.3		Variable	2019
I&M	Notes Payable	23.6		Variable	2019
I&M	Notes Payable	23.9		Variable	2020
I&M	Pollution Control Bonds	52.0		Variable	2017
I&M	Notes Payable	24.3		Variable	2021
I&M	Other Long-term Debt	1.1		6.00	2025
I&M	Pollution Control Bonds	50.0		Variable	2025
OPCo	Securitization Bonds	16.2		0.958	2017
OPCo	Securitization Bonds	22.5		0.958	2018
OPCo	Securitization Bonds	7.6		2.049	2019
OPCo	Other Long-term Debt	0.1		1.149	2028
PSO	Other Long-term Debt	0.3		3.00	2027
SWEPCo	Senior Unsecured Notes	250.0		5.55	2017
SWEPCo	Other Long-term Debt	100.0		Variable	2017
SWEPCo	Other Long-term Debt	0.2		3.50	2023
SWEPCo	Other Long-term Debt	0.1		4.28	2023
SWEPCo	Notes Payable	3.3		4.58	2032

Non-Registrant:
AEGCo	Senior Unsecured Notes	152.7		6.33	2037
AGR	Other Long-term Debt	500.0		Variable	2017
KPCo	Pollution Control Bonds	65.0		Variable	2017
KPCo	Senior Unsecured Notes	325.0		6.00	2017
TCC	Securitization Bonds	27.2		0.88	2017
TCC	Securitization Bonds	161.2		5.17	2018
TCC	Pollution Control Bonds	60.0		5.20	2030
Transource Missouri	Other Long-term Debt	130.8		Variable	2018
Total Retirements and Principal Payments		$	2,427.2

In October 2017, I&M retired $1 million of Notes Payable related to DCC Fuel.

In October 2017, AEP Texas retired $41 million of 5.625% Pollution Control Bonds due in 2017.

As of September 30, 2017, trustees held, on behalf of AEP, $728 million of their reacquired Pollution Control Bonds. Of this total, $104 million, $50 million and $345 million related to APCo, I&M and OPCo, respectively.

Debt Covenants (Applies to AEP and AEPTCo)

Covenants in AEPTCo’s note purchase agreements and indenture also limit the amount of contractually-defined priority debt (which includes a further sub-limit of $50 million of secured debt) to 10% of consolidated tangible net assets. The method for calculating the consolidated tangible net assets is contractually defined in the note purchase agreements.

Dividend Restrictions

Utility Subsidiaries’ Restrictions

Parent depends on its utility subsidiaries to pay dividends to shareholders. AEP utility subsidiaries pay dividends to Parent provided funds are legally available. Various financing arrangements and regulatory requirements may impose certain restrictions on the ability of the subsidiaries to transfer funds to Parent in the form of dividends.

All of the dividends declared by AEP’s utility subsidiaries that provide transmission or local distribution services are subject to a Federal Power Act restriction that prohibits the payment of dividends out of capital accounts without regulatory approval; payment of dividends is allowed out of retained earnings only. Additionally, the Federal Power Act creates a reserve on earnings attributable to hydroelectric generation plants. Because of their ownership of such plants, this reserve applies to AGR, APCo and I&M.

Certain AEP subsidiaries have credit agreements that contain a covenant that limits their debt to capitalization ratio to 67.5%. As of September 30, 2017, no subsidiaries have exceeded their debt to capitalization limit. The payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the AEP subsidiary distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements.

As of September 30, 2017, the Federal Power Act restriction does not limit the ability of the AEP subsidiaries to pay dividends out of retained earnings.

Parent Restrictions (Applies to AEP)

The holders of AEP’s common stock are entitled to receive the dividends declared by the Board of Directors provided funds are legally available for such dividends. Parent’s income primarily derives from common stock equity in the earnings of its utility subsidiaries.

Pursuant to the leverage restrictions in credit agreements, AEP must maintain a percentage of debt to total capitalization at a level that does not exceed 67.5%. As of September 30, 2017, AEP has not exceeded its debt to capitalization limit. The payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the company distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements.

Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries)

The AEP System uses a corporate borrowing program to meet the short-term borrowing needs of AEP’s subsidiaries. The corporate borrowing program includes a Utility Money Pool, which funds AEP’s utility subsidiaries, and a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of September 30, 2017 and December 31, 2016 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the nine months ended September 30, 2017 are described in the following table:



	Maximum				Average				Net Loans to
	Borrowings		Maximum		Borrowings		Average		(Borrowings from)			Authorized
	from the		Loans to the		from the		Loans to the		the Utility Money			Short-term
	Utility		Utility		Utility		Utility		Pool as of			Borrowing
Company	Money Pool		Money Pool		Money Pool		Money Pool		September 30, 2017			Limit
	(in millions)
AEPTCo	$	467.2	$	194.8	$	235.7	$	19.3	$	162.9		$	795.0	(a)
APCo	231.5		160.7		152.2		32.2		(45.9		)	600.0
I&M	367.4		12.6		205.7		12.6		(164.9		)	500.0
OPCo	280.6		56.2		141.0		27.9		(167.6		)	400.0
PSO	185.2		—		121.3		—		(118.0		)	300.0
SWEPCo	187.5		178.6		109.6		169.5		(48.3		)	350.0


(a)	Amount represents the combined authorized short-term borrowing limit the State Transcos have from FERC or state regulatory commissions.

The activity in the above table does not include short-term lending activity of SWEPCo’s wholly-owned subsidiary, Mutual Energy SWEPCo, LP, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of September 30, 2017 and December 31, 2016 are included in Advances to Affiliates on SWEPCo’s balance sheets. For the nine months ended September 30, 2017, Mutual Energy SWEPCo, LP had the following activity in the Nonutility Money Pool:



Maximum		Average		Loans
Loans		Loans		to the Nonutility
to the Nonutility		to the Nonutility		Money Pool as of
Money Pool		Money Pool		September 30, 2017
(in millions)
$	2.0	$	2.0	$	2.0

AEP has a direct financing relationship with AEPTCo to meet its short-term borrowing needs. The amounts of outstanding loans to (borrowings from) AEP as of September 30, 2017 and December 31, 2016 are included in Advances to Affiliates and Advances from Affiliates, respectively, on AEPTCo’s balance sheets. AEPTCo’s direct borrowing and lending activity with AEP for the nine months ended September 30, 2017 is described in the following table:

Maximum

Average

Borrowings from

Loans to

Authorized

Borrowings

Loans

Borrowings

Loans

AEP as of

Short-term

from AEP

to AEP

from AEP

to AEP

September 30, 2017

Borrowing Limit

(in millions)

1.1

151.9

1.1

38.9

0.9

96.1

75.0

(a)


(a)	Amount represents the combined authorized short-term borrowing limit the State Transcos have from FERC or state regulatory commissions.

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Nine Months Ended September 30,
	2017		2016
Maximum Interest Rate	1.49	%	0.91	%
Minimum Interest Rate	0.92	%	0.69	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Nine Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
AEPTCo	1.36	%	0.82	%	1.04	%	0.74	%
APCo	1.24	%	0.78	%	1.28	%	0.79	%
I&M	1.24	%	0.73	%	1.27	%	0.78	%
OPCo	1.40	%	0.85	%	0.98	%	0.74	%
PSO	1.30	%	0.76	%	—	%	0.81	%
SWEPCo	1.26	%	0.79	%	0.98	%	0.91	%

Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool are summarized for Mutual Energy SWEPCo, LP in the following table:



	Maximum		Minimum		Average
	Interest Rate		Interest Rate		Interest Rate
Nine Months	for Funds Loaned		for Funds Loaned		for Funds Loaned
Ended	to the Nonutility		to the Nonutility		to the Nonutility
September 30,	Money Pool		Money Pool		Money Pool
2017	1.49	%	—	%	1.27	%
2016	0.91	%	0.69	%	0.79	%

AEPTCo’s maximum, minimum and average interest rates for funds either borrowed from or loaned to AEP are summarized in the following table:



	Maximum		Minimum		Maximum		Minimum		Average		Average
	Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate
Nine Months	for Funds		for Funds		for Funds		for Funds		for Funds		for Funds
Ended	Borrowed		Borrowed		Loaned		Loaned		Borrowed		Loaned
September 30,	from AEP		from AEP		to AEP		to AEP		from AEP		to AEP
2017	1.49	%	0.92	%	1.49	%	0.92	%	1.27	%	1.31	%
2016	0.91	%	0.69	%	0.91	%	0.69	%	0.80	%	0.81	%

Short-term Debt (Applies to AEP and SWEPCo)

Outstanding short-term debt was as follows:



		September 30, 2017				December 31, 2016
Company	Type of Debt	Outstanding Amount		Interest Rate (a)		Outstanding Amount		Interest Rate (a)
		(in millions)				(in millions)
AEP	Securitized Debt for Receivables (b)	$	750.0	1.17	%	$	673.0	0.70	%
AEP	Commercial Paper	295.0		1.39	%	1,040.0		1.02	%
SWEPCo	Notes Payable	14.3		2.88	%	—		—	%
	Total Short-term Debt	$	1,059.3			$	1,713.0


(a)	Weighted average rate.


(b)	Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance.

Credit Facilities

For a discussion of credit facilities, see “Letters of Credit” section of Note 5.

Securitized Accounts Receivables – AEP Credit (Applies to AEP)

AEP Credit has a receivables securitization agreement with bank conduits. Under the securitization agreement, AEP Credit receives financing from the bank conduits for the interest in the receivables AEP Credit acquires from affiliated utility subsidiaries. These securitized transactions allow AEP Credit to repay its outstanding debt obligations, continue to purchase the operating companies’ receivables and accelerate AEP Credit’s cash collections.

AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2019.

Accounts receivable information for AEP Credit is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(dollars in millions)
Effective Interest Rates on Securitization of Accounts Receivable	1.33		%	0.73		%	1.17		%	0.65		%
Net Uncollectible Accounts Receivable Written Off	$	7.0		$	7.7		$	18.2		$	17.5



	September 30, 2017		December 31, 2016
	(in millions)
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts	$	939.8	$	945.0
Short-term – Securitized Debt of Receivables	750.0		673.0
Delinquent Securitized Accounts Receivable	44.3		42.7
Bad Debt Reserves Related to Securitization	27.8		27.7
Unbilled Receivables Related to Securitization	264.2		322.1

AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due.

Securitized Accounts Receivables – AEP Credit (Applies to Registrant Subsidiaries, except AEPTCo)

Under this sale of receivables arrangement, the Registrant Subsidiaries sell, without recourse, certain of their customer accounts receivable and accrued unbilled revenue balances to AEP Credit and are charged a fee based on AEP Credit’s financing costs, administrative costs and uncollectible accounts experience for each Registrant Subsidiary’s receivables. APCo does not have regulatory authority to sell its West Virginia accounts receivable. The costs of customer accounts receivable sold are reported in Other Operation expense on the Registrant Subsidiaries’ statements of income. The Registrant Subsidiaries manage and service their customer accounts receivable, which are sold to AEP Credit. AEP Credit securitizes the eligible receivables for the operating companies and retains the remainder.

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary was as follows:



Company	September 30, 2017		December 31, 2016
	(in millions)
APCo	$	116.9	$	142.0
I&M	132.7		136.7
OPCo	356.3		388.3
PSO	143.4		110.4
SWEPCo	167.1		130.9

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
	(in millions)
APCo	$	1.5	$	1.6	$	4.2	$	5.4
I&M	1.8		2.0		4.9		5.6
OPCo	6.1		8.1		16.5		23.4
PSO	2.0		1.8		5.2		4.7
SWEPCo	2.0		2.1		5.4		5.3

The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
	(in millions)
APCo	$	335.5	$	361.7	$	1,029.4	$	1,071.6
I&M	409.9		448.0		1,218.9		1,220.2
OPCo	616.3		750.9		1,741.7		2,011.2
PSO	407.0		390.6		1,022.6		971.9
SWEPCo	455.0		460.4		1,200.8		1,183.9

AEP Transmission Co [Member]

Financing Activities

FINANCING ACTIVITIES

The disclosures in this note apply to all Registrants, unless indicated otherwise.

Long-term Debt Outstanding (Applies to AEP)

The following table details long-term debt outstanding:



Type of Debt	September 30, 2017		December 31, 2016
	(in millions)
Senior Unsecured Notes	$	16,038.6	$	14,761.0	(b)
Pollution Control Bonds	1,612.4		1,725.1
Notes Payable	224.5		326.9
Securitization Bonds	1,449.4		1,705.0
Spent Nuclear Fuel Obligation (a)	267.9		266.3
Other Long-term Debt	1,128.9		1,606.9
Total Long-term Debt Outstanding	20,721.7		20,391.2		(b)
Long-term Debt Due Within One Year	2,359.3		3,013.4		(b)
Long-term Debt	$	18,362.4	$	17,377.8	(b)

(a)


(b)	Amounts include debt related to the Lawrenceburg Plant that has been classified as Liabilities Held for Sale on the balance sheet. See “Gavin, Waterford, Darby and Lawrenceburg Plants (Generation & Marketing Segment)” section of Note 6 for additional information.

Long-term Debt Activity

Long-term debt and other securities issued, retired and principal payments made during the first nine months of 2017 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in millions)		(%)
AEPTCo	Senior Unsecured Notes	$	125.0	3.10	2026
AEPTCo	Senior Unsecured Notes	500.0		3.75	2047
APCo	Senior Unsecured Notes	325.0		3.30	2027
I&M	Pollution Control Bonds	25.0		Variable	2019
I&M	Pollution Control Bonds	40.0		2.05	2021
I&M	Pollution Control Bonds	52.0		Variable	2021
I&M	Senior Unsecured Notes	300.0		3.75	2047
SWEPCo	Other Long-term Debt	115.0		Variable	2020

Non-Registrant:
AEP Texas	Pollution Control Bonds	60.0		1.75	2020
AEP Texas	Senior Unsecured Notes	400.0		2.40	2022
AEP Texas	Senior Unsecured Notes	300.0		3.80	2047
KPCo	Pollution Control Bonds	65.0		2.00	2020
KPCo	Senior Unsecured Notes	65.0		3.13	2024
KPCo	Senior Unsecured Notes	40.0		3.35	2027
KPCo	Senior Unsecured Notes	165.0		3.45	2029
KPCo	Senior Unsecured Notes	55.0		4.12	2047
Transource Missouri	Other Long-term Debt	7.0		Variable	2018
Transource Energy	Other Long-term Debt	132.1		Variable	2020
Total Issuances		$	2,771.1


(a)	Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in millions)		(%)
APCo	Senior Unsecured Notes	$	250.0	5.00	2017
APCo	Securitization Bonds	23.5		2.008	2024
APCo	Pollution Control Bonds	104.4		Variable	2017
I&M	Notes Payable	4.9		Variable	2017
I&M	Pollution Control Bonds	25.0		Variable	2017
I&M	Notes Payable	22.3		Variable	2019
I&M	Notes Payable	23.6		Variable	2019
I&M	Notes Payable	23.9		Variable	2020
I&M	Pollution Control Bonds	52.0		Variable	2017
I&M	Notes Payable	24.3		Variable	2021
I&M	Other Long-term Debt	1.1		6.00	2025
I&M	Pollution Control Bonds	50.0		Variable	2025
OPCo	Securitization Bonds	16.2		0.958	2017
OPCo	Securitization Bonds	22.5		0.958	2018
OPCo	Securitization Bonds	7.6		2.049	2019
OPCo	Other Long-term Debt	0.1		1.149	2028
PSO	Other Long-term Debt	0.3		3.00	2027
SWEPCo	Senior Unsecured Notes	250.0		5.55	2017
SWEPCo	Other Long-term Debt	100.0		Variable	2017
SWEPCo	Other Long-term Debt	0.2		3.50	2023
SWEPCo	Other Long-term Debt	0.1		4.28	2023
SWEPCo	Notes Payable	3.3		4.58	2032

Non-Registrant:
AEGCo	Senior Unsecured Notes	152.7		6.33	2037
AGR	Other Long-term Debt	500.0		Variable	2017
KPCo	Pollution Control Bonds	65.0		Variable	2017
KPCo	Senior Unsecured Notes	325.0		6.00	2017
TCC	Securitization Bonds	27.2		0.88	2017
TCC	Securitization Bonds	161.2		5.17	2018
TCC	Pollution Control Bonds	60.0		5.20	2030
Transource Missouri	Other Long-term Debt	130.8		Variable	2018
Total Retirements and Principal Payments		$	2,427.2

In October 2017, I&M retired $1 million of Notes Payable related to DCC Fuel.

In October 2017, AEP Texas retired $41 million of 5.625% Pollution Control Bonds due in 2017.

Debt Covenants (Applies to AEP and AEPTCo)

Dividend Restrictions

Utility Subsidiaries’ Restrictions

As of September 30, 2017, the Federal Power Act restriction does not limit the ability of the AEP subsidiaries to pay dividends out of retained earnings.

Parent Restrictions (Applies to AEP)

Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries)



	Maximum				Average				Net Loans to
	Borrowings		Maximum		Borrowings		Average		(Borrowings from)			Authorized
	from the		Loans to the		from the		Loans to the		the Utility Money			Short-term
	Utility		Utility		Utility		Utility		Pool as of			Borrowing
Company	Money Pool		Money Pool		Money Pool		Money Pool		September 30, 2017			Limit
	(in millions)
AEPTCo	$	467.2	$	194.8	$	235.7	$	19.3	$	162.9		$	795.0	(a)
APCo	231.5		160.7		152.2		32.2		(45.9		)	600.0
I&M	367.4		12.6		205.7		12.6		(164.9		)	500.0
OPCo	280.6		56.2		141.0		27.9		(167.6		)	400.0
PSO	185.2		—		121.3		—		(118.0		)	300.0
SWEPCo	187.5		178.6		109.6		169.5		(48.3		)	350.0


(a)	Amount represents the combined authorized short-term borrowing limit the State Transcos have from FERC or state regulatory commissions.



Maximum		Average		Loans
Loans		Loans		to the Nonutility
to the Nonutility		to the Nonutility		Money Pool as of
Money Pool		Money Pool		September 30, 2017
(in millions)
$	2.0	$	2.0	$	2.0

Maximum

Average

Borrowings from

Loans to

Authorized

Borrowings

Loans

Borrowings

Loans

AEP as of

Short-term

from AEP

to AEP

from AEP

to AEP

September 30, 2017

Borrowing Limit

(in millions)

1.1

151.9

1.1

38.9

0.9

96.1

75.0

(a)


(a)	Amount represents the combined authorized short-term borrowing limit the State Transcos have from FERC or state regulatory commissions.

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Nine Months Ended September 30,
	2017		2016
Maximum Interest Rate	1.49	%	0.91	%
Minimum Interest Rate	0.92	%	0.69	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Nine Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
AEPTCo	1.36	%	0.82	%	1.04	%	0.74	%
APCo	1.24	%	0.78	%	1.28	%	0.79	%
I&M	1.24	%	0.73	%	1.27	%	0.78	%
OPCo	1.40	%	0.85	%	0.98	%	0.74	%
PSO	1.30	%	0.76	%	—	%	0.81	%
SWEPCo	1.26	%	0.79	%	0.98	%	0.91	%

Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool are summarized for Mutual Energy SWEPCo, LP in the following table:



	Maximum		Minimum		Average
	Interest Rate		Interest Rate		Interest Rate
Nine Months	for Funds Loaned		for Funds Loaned		for Funds Loaned
Ended	to the Nonutility		to the Nonutility		to the Nonutility
September 30,	Money Pool		Money Pool		Money Pool
2017	1.49	%	—	%	1.27	%
2016	0.91	%	0.69	%	0.79	%

AEPTCo’s maximum, minimum and average interest rates for funds either borrowed from or loaned to AEP are summarized in the following table:



	Maximum		Minimum		Maximum		Minimum		Average		Average
	Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate
Nine Months	for Funds		for Funds		for Funds		for Funds		for Funds		for Funds
Ended	Borrowed		Borrowed		Loaned		Loaned		Borrowed		Loaned
September 30,	from AEP		from AEP		to AEP		to AEP		from AEP		to AEP
2017	1.49	%	0.92	%	1.49	%	0.92	%	1.27	%	1.31	%
2016	0.91	%	0.69	%	0.91	%	0.69	%	0.80	%	0.81	%

Short-term Debt (Applies to AEP and SWEPCo)

Outstanding short-term debt was as follows:



		September 30, 2017				December 31, 2016
Company	Type of Debt	Outstanding Amount		Interest Rate (a)		Outstanding Amount		Interest Rate (a)
		(in millions)				(in millions)
AEP	Securitized Debt for Receivables (b)	$	750.0	1.17	%	$	673.0	0.70	%
AEP	Commercial Paper	295.0		1.39	%	1,040.0		1.02	%
SWEPCo	Notes Payable	14.3		2.88	%	—		—	%
	Total Short-term Debt	$	1,059.3			$	1,713.0


(a)	Weighted average rate.


(b)	Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance.

Credit Facilities

For a discussion of credit facilities, see “Letters of Credit” section of Note 5.

Securitized Accounts Receivables – AEP Credit (Applies to AEP)

AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2019.

Accounts receivable information for AEP Credit is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(dollars in millions)
Effective Interest Rates on Securitization of Accounts Receivable	1.33		%	0.73		%	1.17		%	0.65		%
Net Uncollectible Accounts Receivable Written Off	$	7.0		$	7.7		$	18.2		$	17.5



	September 30, 2017		December 31, 2016
	(in millions)
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts	$	939.8	$	945.0
Short-term – Securitized Debt of Receivables	750.0		673.0
Delinquent Securitized Accounts Receivable	44.3		42.7
Bad Debt Reserves Related to Securitization	27.8		27.7
Unbilled Receivables Related to Securitization	264.2		322.1

AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due.

Securitized Accounts Receivables – AEP Credit (Applies to Registrant Subsidiaries, except AEPTCo)

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary was as follows:



Company	September 30, 2017		December 31, 2016
	(in millions)
APCo	$	116.9	$	142.0
I&M	132.7		136.7
OPCo	356.3		388.3
PSO	143.4		110.4
SWEPCo	167.1		130.9

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
	(in millions)
APCo	$	1.5	$	1.6	$	4.2	$	5.4
I&M	1.8		2.0		4.9		5.6
OPCo	6.1		8.1		16.5		23.4
PSO	2.0		1.8		5.2		4.7
SWEPCo	2.0		2.1		5.4		5.3

The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
	(in millions)
APCo	$	335.5	$	361.7	$	1,029.4	$	1,071.6
I&M	409.9		448.0		1,218.9		1,220.2
OPCo	616.3		750.9		1,741.7		2,011.2
PSO	407.0		390.6		1,022.6		971.9
SWEPCo	455.0		460.4		1,200.8		1,183.9

Appalachian Power Co [Member]

Financing Activities

FINANCING ACTIVITIES

The disclosures in this note apply to all Registrants, unless indicated otherwise.

Long-term Debt Outstanding (Applies to AEP)

The following table details long-term debt outstanding:



Type of Debt	September 30, 2017		December 31, 2016
	(in millions)
Senior Unsecured Notes	$	16,038.6	$	14,761.0	(b)
Pollution Control Bonds	1,612.4		1,725.1
Notes Payable	224.5		326.9
Securitization Bonds	1,449.4		1,705.0
Spent Nuclear Fuel Obligation (a)	267.9		266.3
Other Long-term Debt	1,128.9		1,606.9
Total Long-term Debt Outstanding	20,721.7		20,391.2		(b)
Long-term Debt Due Within One Year	2,359.3		3,013.4		(b)
Long-term Debt	$	18,362.4	$	17,377.8	(b)

(a)


(b)	Amounts include debt related to the Lawrenceburg Plant that has been classified as Liabilities Held for Sale on the balance sheet. See “Gavin, Waterford, Darby and Lawrenceburg Plants (Generation & Marketing Segment)” section of Note 6 for additional information.

Long-term Debt Activity

Long-term debt and other securities issued, retired and principal payments made during the first nine months of 2017 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in millions)		(%)
AEPTCo	Senior Unsecured Notes	$	125.0	3.10	2026
AEPTCo	Senior Unsecured Notes	500.0		3.75	2047
APCo	Senior Unsecured Notes	325.0		3.30	2027
I&M	Pollution Control Bonds	25.0		Variable	2019
I&M	Pollution Control Bonds	40.0		2.05	2021
I&M	Pollution Control Bonds	52.0		Variable	2021
I&M	Senior Unsecured Notes	300.0		3.75	2047
SWEPCo	Other Long-term Debt	115.0		Variable	2020

Non-Registrant:
AEP Texas	Pollution Control Bonds	60.0		1.75	2020
AEP Texas	Senior Unsecured Notes	400.0		2.40	2022
AEP Texas	Senior Unsecured Notes	300.0		3.80	2047
KPCo	Pollution Control Bonds	65.0		2.00	2020
KPCo	Senior Unsecured Notes	65.0		3.13	2024
KPCo	Senior Unsecured Notes	40.0		3.35	2027
KPCo	Senior Unsecured Notes	165.0		3.45	2029
KPCo	Senior Unsecured Notes	55.0		4.12	2047
Transource Missouri	Other Long-term Debt	7.0		Variable	2018
Transource Energy	Other Long-term Debt	132.1		Variable	2020
Total Issuances		$	2,771.1


(a)	Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in millions)		(%)
APCo	Senior Unsecured Notes	$	250.0	5.00	2017
APCo	Securitization Bonds	23.5		2.008	2024
APCo	Pollution Control Bonds	104.4		Variable	2017
I&M	Notes Payable	4.9		Variable	2017
I&M	Pollution Control Bonds	25.0		Variable	2017
I&M	Notes Payable	22.3		Variable	2019
I&M	Notes Payable	23.6		Variable	2019
I&M	Notes Payable	23.9		Variable	2020
I&M	Pollution Control Bonds	52.0		Variable	2017
I&M	Notes Payable	24.3		Variable	2021
I&M	Other Long-term Debt	1.1		6.00	2025
I&M	Pollution Control Bonds	50.0		Variable	2025
OPCo	Securitization Bonds	16.2		0.958	2017
OPCo	Securitization Bonds	22.5		0.958	2018
OPCo	Securitization Bonds	7.6		2.049	2019
OPCo	Other Long-term Debt	0.1		1.149	2028
PSO	Other Long-term Debt	0.3		3.00	2027
SWEPCo	Senior Unsecured Notes	250.0		5.55	2017
SWEPCo	Other Long-term Debt	100.0		Variable	2017
SWEPCo	Other Long-term Debt	0.2		3.50	2023
SWEPCo	Other Long-term Debt	0.1		4.28	2023
SWEPCo	Notes Payable	3.3		4.58	2032

Non-Registrant:
AEGCo	Senior Unsecured Notes	152.7		6.33	2037
AGR	Other Long-term Debt	500.0		Variable	2017
KPCo	Pollution Control Bonds	65.0		Variable	2017
KPCo	Senior Unsecured Notes	325.0		6.00	2017
TCC	Securitization Bonds	27.2		0.88	2017
TCC	Securitization Bonds	161.2		5.17	2018
TCC	Pollution Control Bonds	60.0		5.20	2030
Transource Missouri	Other Long-term Debt	130.8		Variable	2018
Total Retirements and Principal Payments		$	2,427.2

In October 2017, I&M retired $1 million of Notes Payable related to DCC Fuel.

In October 2017, AEP Texas retired $41 million of 5.625% Pollution Control Bonds due in 2017.

Debt Covenants (Applies to AEP and AEPTCo)

Dividend Restrictions

Utility Subsidiaries’ Restrictions

As of September 30, 2017, the Federal Power Act restriction does not limit the ability of the AEP subsidiaries to pay dividends out of retained earnings.

Parent Restrictions (Applies to AEP)

Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries)



	Maximum				Average				Net Loans to
	Borrowings		Maximum		Borrowings		Average		(Borrowings from)			Authorized
	from the		Loans to the		from the		Loans to the		the Utility Money			Short-term
	Utility		Utility		Utility		Utility		Pool as of			Borrowing
Company	Money Pool		Money Pool		Money Pool		Money Pool		September 30, 2017			Limit
	(in millions)
AEPTCo	$	467.2	$	194.8	$	235.7	$	19.3	$	162.9		$	795.0	(a)
APCo	231.5		160.7		152.2		32.2		(45.9		)	600.0
I&M	367.4		12.6		205.7		12.6		(164.9		)	500.0
OPCo	280.6		56.2		141.0		27.9		(167.6		)	400.0
PSO	185.2		—		121.3		—		(118.0		)	300.0
SWEPCo	187.5		178.6		109.6		169.5		(48.3		)	350.0


(a)	Amount represents the combined authorized short-term borrowing limit the State Transcos have from FERC or state regulatory commissions.



Maximum		Average		Loans
Loans		Loans		to the Nonutility
to the Nonutility		to the Nonutility		Money Pool as of
Money Pool		Money Pool		September 30, 2017
(in millions)
$	2.0	$	2.0	$	2.0

Maximum

Average

Borrowings from

Loans to

Authorized

Borrowings

Loans

Borrowings

Loans

AEP as of

Short-term

from AEP

to AEP

from AEP

to AEP

September 30, 2017

Borrowing Limit

(in millions)

1.1

151.9

1.1

38.9

0.9

96.1

75.0

(a)


(a)	Amount represents the combined authorized short-term borrowing limit the State Transcos have from FERC or state regulatory commissions.

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Nine Months Ended September 30,
	2017		2016
Maximum Interest Rate	1.49	%	0.91	%
Minimum Interest Rate	0.92	%	0.69	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Nine Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
AEPTCo	1.36	%	0.82	%	1.04	%	0.74	%
APCo	1.24	%	0.78	%	1.28	%	0.79	%
I&M	1.24	%	0.73	%	1.27	%	0.78	%
OPCo	1.40	%	0.85	%	0.98	%	0.74	%
PSO	1.30	%	0.76	%	—	%	0.81	%
SWEPCo	1.26	%	0.79	%	0.98	%	0.91	%

Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool are summarized for Mutual Energy SWEPCo, LP in the following table:



	Maximum		Minimum		Average
	Interest Rate		Interest Rate		Interest Rate
Nine Months	for Funds Loaned		for Funds Loaned		for Funds Loaned
Ended	to the Nonutility		to the Nonutility		to the Nonutility
September 30,	Money Pool		Money Pool		Money Pool
2017	1.49	%	—	%	1.27	%
2016	0.91	%	0.69	%	0.79	%

AEPTCo’s maximum, minimum and average interest rates for funds either borrowed from or loaned to AEP are summarized in the following table:



	Maximum		Minimum		Maximum		Minimum		Average		Average
	Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate
Nine Months	for Funds		for Funds		for Funds		for Funds		for Funds		for Funds
Ended	Borrowed		Borrowed		Loaned		Loaned		Borrowed		Loaned
September 30,	from AEP		from AEP		to AEP		to AEP		from AEP		to AEP
2017	1.49	%	0.92	%	1.49	%	0.92	%	1.27	%	1.31	%
2016	0.91	%	0.69	%	0.91	%	0.69	%	0.80	%	0.81	%

Short-term Debt (Applies to AEP and SWEPCo)

Outstanding short-term debt was as follows:



		September 30, 2017				December 31, 2016
Company	Type of Debt	Outstanding Amount		Interest Rate (a)		Outstanding Amount		Interest Rate (a)
		(in millions)				(in millions)
AEP	Securitized Debt for Receivables (b)	$	750.0	1.17	%	$	673.0	0.70	%
AEP	Commercial Paper	295.0		1.39	%	1,040.0		1.02	%
SWEPCo	Notes Payable	14.3		2.88	%	—		—	%
	Total Short-term Debt	$	1,059.3			$	1,713.0


(a)	Weighted average rate.


(b)	Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance.

Credit Facilities

For a discussion of credit facilities, see “Letters of Credit” section of Note 5.

Securitized Accounts Receivables – AEP Credit (Applies to AEP)

AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2019.

Accounts receivable information for AEP Credit is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(dollars in millions)
Effective Interest Rates on Securitization of Accounts Receivable	1.33		%	0.73		%	1.17		%	0.65		%
Net Uncollectible Accounts Receivable Written Off	$	7.0		$	7.7		$	18.2		$	17.5



	September 30, 2017		December 31, 2016
	(in millions)
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts	$	939.8	$	945.0
Short-term – Securitized Debt of Receivables	750.0		673.0
Delinquent Securitized Accounts Receivable	44.3		42.7
Bad Debt Reserves Related to Securitization	27.8		27.7
Unbilled Receivables Related to Securitization	264.2		322.1

AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due.

Securitized Accounts Receivables – AEP Credit (Applies to Registrant Subsidiaries, except AEPTCo)

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary was as follows:



Company	September 30, 2017		December 31, 2016
	(in millions)
APCo	$	116.9	$	142.0
I&M	132.7		136.7
OPCo	356.3		388.3
PSO	143.4		110.4
SWEPCo	167.1		130.9

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
	(in millions)
APCo	$	1.5	$	1.6	$	4.2	$	5.4
I&M	1.8		2.0		4.9		5.6
OPCo	6.1		8.1		16.5		23.4
PSO	2.0		1.8		5.2		4.7
SWEPCo	2.0		2.1		5.4		5.3

The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
	(in millions)
APCo	$	335.5	$	361.7	$	1,029.4	$	1,071.6
I&M	409.9		448.0		1,218.9		1,220.2
OPCo	616.3		750.9		1,741.7		2,011.2
PSO	407.0		390.6		1,022.6		971.9
SWEPCo	455.0		460.4		1,200.8		1,183.9

Indiana Michigan Power Co [Member]

Financing Activities

FINANCING ACTIVITIES

The disclosures in this note apply to all Registrants, unless indicated otherwise.

Long-term Debt Outstanding (Applies to AEP)

The following table details long-term debt outstanding:



Type of Debt	September 30, 2017		December 31, 2016
	(in millions)
Senior Unsecured Notes	$	16,038.6	$	14,761.0	(b)
Pollution Control Bonds	1,612.4		1,725.1
Notes Payable	224.5		326.9
Securitization Bonds	1,449.4		1,705.0
Spent Nuclear Fuel Obligation (a)	267.9		266.3
Other Long-term Debt	1,128.9		1,606.9
Total Long-term Debt Outstanding	20,721.7		20,391.2		(b)
Long-term Debt Due Within One Year	2,359.3		3,013.4		(b)
Long-term Debt	$	18,362.4	$	17,377.8	(b)

(a)


(b)	Amounts include debt related to the Lawrenceburg Plant that has been classified as Liabilities Held for Sale on the balance sheet. See “Gavin, Waterford, Darby and Lawrenceburg Plants (Generation & Marketing Segment)” section of Note 6 for additional information.

Long-term Debt Activity

Long-term debt and other securities issued, retired and principal payments made during the first nine months of 2017 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in millions)		(%)
AEPTCo	Senior Unsecured Notes	$	125.0	3.10	2026
AEPTCo	Senior Unsecured Notes	500.0		3.75	2047
APCo	Senior Unsecured Notes	325.0		3.30	2027
I&M	Pollution Control Bonds	25.0		Variable	2019
I&M	Pollution Control Bonds	40.0		2.05	2021
I&M	Pollution Control Bonds	52.0		Variable	2021
I&M	Senior Unsecured Notes	300.0		3.75	2047
SWEPCo	Other Long-term Debt	115.0		Variable	2020

Non-Registrant:
AEP Texas	Pollution Control Bonds	60.0		1.75	2020
AEP Texas	Senior Unsecured Notes	400.0		2.40	2022
AEP Texas	Senior Unsecured Notes	300.0		3.80	2047
KPCo	Pollution Control Bonds	65.0		2.00	2020
KPCo	Senior Unsecured Notes	65.0		3.13	2024
KPCo	Senior Unsecured Notes	40.0		3.35	2027
KPCo	Senior Unsecured Notes	165.0		3.45	2029
KPCo	Senior Unsecured Notes	55.0		4.12	2047
Transource Missouri	Other Long-term Debt	7.0		Variable	2018
Transource Energy	Other Long-term Debt	132.1		Variable	2020
Total Issuances		$	2,771.1


(a)	Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in millions)		(%)
APCo	Senior Unsecured Notes	$	250.0	5.00	2017
APCo	Securitization Bonds	23.5		2.008	2024
APCo	Pollution Control Bonds	104.4		Variable	2017
I&M	Notes Payable	4.9		Variable	2017
I&M	Pollution Control Bonds	25.0		Variable	2017
I&M	Notes Payable	22.3		Variable	2019
I&M	Notes Payable	23.6		Variable	2019
I&M	Notes Payable	23.9		Variable	2020
I&M	Pollution Control Bonds	52.0		Variable	2017
I&M	Notes Payable	24.3		Variable	2021
I&M	Other Long-term Debt	1.1		6.00	2025
I&M	Pollution Control Bonds	50.0		Variable	2025
OPCo	Securitization Bonds	16.2		0.958	2017
OPCo	Securitization Bonds	22.5		0.958	2018
OPCo	Securitization Bonds	7.6		2.049	2019
OPCo	Other Long-term Debt	0.1		1.149	2028
PSO	Other Long-term Debt	0.3		3.00	2027
SWEPCo	Senior Unsecured Notes	250.0		5.55	2017
SWEPCo	Other Long-term Debt	100.0		Variable	2017
SWEPCo	Other Long-term Debt	0.2		3.50	2023
SWEPCo	Other Long-term Debt	0.1		4.28	2023
SWEPCo	Notes Payable	3.3		4.58	2032

Non-Registrant:
AEGCo	Senior Unsecured Notes	152.7		6.33	2037
AGR	Other Long-term Debt	500.0		Variable	2017
KPCo	Pollution Control Bonds	65.0		Variable	2017
KPCo	Senior Unsecured Notes	325.0		6.00	2017
TCC	Securitization Bonds	27.2		0.88	2017
TCC	Securitization Bonds	161.2		5.17	2018
TCC	Pollution Control Bonds	60.0		5.20	2030
Transource Missouri	Other Long-term Debt	130.8		Variable	2018
Total Retirements and Principal Payments		$	2,427.2

In October 2017, I&M retired $1 million of Notes Payable related to DCC Fuel.

In October 2017, AEP Texas retired $41 million of 5.625% Pollution Control Bonds due in 2017.

Debt Covenants (Applies to AEP and AEPTCo)

Dividend Restrictions

Utility Subsidiaries’ Restrictions

As of September 30, 2017, the Federal Power Act restriction does not limit the ability of the AEP subsidiaries to pay dividends out of retained earnings.

Parent Restrictions (Applies to AEP)

Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries)



	Maximum				Average				Net Loans to
	Borrowings		Maximum		Borrowings		Average		(Borrowings from)			Authorized
	from the		Loans to the		from the		Loans to the		the Utility Money			Short-term
	Utility		Utility		Utility		Utility		Pool as of			Borrowing
Company	Money Pool		Money Pool		Money Pool		Money Pool		September 30, 2017			Limit
	(in millions)
AEPTCo	$	467.2	$	194.8	$	235.7	$	19.3	$	162.9		$	795.0	(a)
APCo	231.5		160.7		152.2		32.2		(45.9		)	600.0
I&M	367.4		12.6		205.7		12.6		(164.9		)	500.0
OPCo	280.6		56.2		141.0		27.9		(167.6		)	400.0
PSO	185.2		—		121.3		—		(118.0		)	300.0
SWEPCo	187.5		178.6		109.6		169.5		(48.3		)	350.0


(a)	Amount represents the combined authorized short-term borrowing limit the State Transcos have from FERC or state regulatory commissions.



Maximum		Average		Loans
Loans		Loans		to the Nonutility
to the Nonutility		to the Nonutility		Money Pool as of
Money Pool		Money Pool		September 30, 2017
(in millions)
$	2.0	$	2.0	$	2.0

Maximum

Average

Borrowings from

Loans to

Authorized

Borrowings

Loans

Borrowings

Loans

AEP as of

Short-term

from AEP

to AEP

from AEP

to AEP

September 30, 2017

Borrowing Limit

(in millions)

1.1

151.9

1.1

38.9

0.9

96.1

75.0

(a)


(a)	Amount represents the combined authorized short-term borrowing limit the State Transcos have from FERC or state regulatory commissions.

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Nine Months Ended September 30,
	2017		2016
Maximum Interest Rate	1.49	%	0.91	%
Minimum Interest Rate	0.92	%	0.69	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Nine Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
AEPTCo	1.36	%	0.82	%	1.04	%	0.74	%
APCo	1.24	%	0.78	%	1.28	%	0.79	%
I&M	1.24	%	0.73	%	1.27	%	0.78	%
OPCo	1.40	%	0.85	%	0.98	%	0.74	%
PSO	1.30	%	0.76	%	—	%	0.81	%
SWEPCo	1.26	%	0.79	%	0.98	%	0.91	%

Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool are summarized for Mutual Energy SWEPCo, LP in the following table:



	Maximum		Minimum		Average
	Interest Rate		Interest Rate		Interest Rate
Nine Months	for Funds Loaned		for Funds Loaned		for Funds Loaned
Ended	to the Nonutility		to the Nonutility		to the Nonutility
September 30,	Money Pool		Money Pool		Money Pool
2017	1.49	%	—	%	1.27	%
2016	0.91	%	0.69	%	0.79	%

AEPTCo’s maximum, minimum and average interest rates for funds either borrowed from or loaned to AEP are summarized in the following table:



	Maximum		Minimum		Maximum		Minimum		Average		Average
	Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate
Nine Months	for Funds		for Funds		for Funds		for Funds		for Funds		for Funds
Ended	Borrowed		Borrowed		Loaned		Loaned		Borrowed		Loaned
September 30,	from AEP		from AEP		to AEP		to AEP		from AEP		to AEP
2017	1.49	%	0.92	%	1.49	%	0.92	%	1.27	%	1.31	%
2016	0.91	%	0.69	%	0.91	%	0.69	%	0.80	%	0.81	%

Short-term Debt (Applies to AEP and SWEPCo)

Outstanding short-term debt was as follows:



		September 30, 2017				December 31, 2016
Company	Type of Debt	Outstanding Amount		Interest Rate (a)		Outstanding Amount		Interest Rate (a)
		(in millions)				(in millions)
AEP	Securitized Debt for Receivables (b)	$	750.0	1.17	%	$	673.0	0.70	%
AEP	Commercial Paper	295.0		1.39	%	1,040.0		1.02	%
SWEPCo	Notes Payable	14.3		2.88	%	—		—	%
	Total Short-term Debt	$	1,059.3			$	1,713.0


(a)	Weighted average rate.


(b)	Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance.

Credit Facilities

For a discussion of credit facilities, see “Letters of Credit” section of Note 5.

Securitized Accounts Receivables – AEP Credit (Applies to AEP)

AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2019.

Accounts receivable information for AEP Credit is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(dollars in millions)
Effective Interest Rates on Securitization of Accounts Receivable	1.33		%	0.73		%	1.17		%	0.65		%
Net Uncollectible Accounts Receivable Written Off	$	7.0		$	7.7		$	18.2		$	17.5



	September 30, 2017		December 31, 2016
	(in millions)
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts	$	939.8	$	945.0
Short-term – Securitized Debt of Receivables	750.0		673.0
Delinquent Securitized Accounts Receivable	44.3		42.7
Bad Debt Reserves Related to Securitization	27.8		27.7
Unbilled Receivables Related to Securitization	264.2		322.1

AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due.

Securitized Accounts Receivables – AEP Credit (Applies to Registrant Subsidiaries, except AEPTCo)

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary was as follows:



Company	September 30, 2017		December 31, 2016
	(in millions)
APCo	$	116.9	$	142.0
I&M	132.7		136.7
OPCo	356.3		388.3
PSO	143.4		110.4
SWEPCo	167.1		130.9

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
	(in millions)
APCo	$	1.5	$	1.6	$	4.2	$	5.4
I&M	1.8		2.0		4.9		5.6
OPCo	6.1		8.1		16.5		23.4
PSO	2.0		1.8		5.2		4.7
SWEPCo	2.0		2.1		5.4		5.3

The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
	(in millions)
APCo	$	335.5	$	361.7	$	1,029.4	$	1,071.6
I&M	409.9		448.0		1,218.9		1,220.2
OPCo	616.3		750.9		1,741.7		2,011.2
PSO	407.0		390.6		1,022.6		971.9
SWEPCo	455.0		460.4		1,200.8		1,183.9

Ohio Power Co [Member]

Financing Activities

FINANCING ACTIVITIES

The disclosures in this note apply to all Registrants, unless indicated otherwise.

Long-term Debt Outstanding (Applies to AEP)

The following table details long-term debt outstanding:



Type of Debt	September 30, 2017		December 31, 2016
	(in millions)
Senior Unsecured Notes	$	16,038.6	$	14,761.0	(b)
Pollution Control Bonds	1,612.4		1,725.1
Notes Payable	224.5		326.9
Securitization Bonds	1,449.4		1,705.0
Spent Nuclear Fuel Obligation (a)	267.9		266.3
Other Long-term Debt	1,128.9		1,606.9
Total Long-term Debt Outstanding	20,721.7		20,391.2		(b)
Long-term Debt Due Within One Year	2,359.3		3,013.4		(b)
Long-term Debt	$	18,362.4	$	17,377.8	(b)

(a)


(b)	Amounts include debt related to the Lawrenceburg Plant that has been classified as Liabilities Held for Sale on the balance sheet. See “Gavin, Waterford, Darby and Lawrenceburg Plants (Generation & Marketing Segment)” section of Note 6 for additional information.

Long-term Debt Activity

Long-term debt and other securities issued, retired and principal payments made during the first nine months of 2017 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in millions)		(%)
AEPTCo	Senior Unsecured Notes	$	125.0	3.10	2026
AEPTCo	Senior Unsecured Notes	500.0		3.75	2047
APCo	Senior Unsecured Notes	325.0		3.30	2027
I&M	Pollution Control Bonds	25.0		Variable	2019
I&M	Pollution Control Bonds	40.0		2.05	2021
I&M	Pollution Control Bonds	52.0		Variable	2021
I&M	Senior Unsecured Notes	300.0		3.75	2047
SWEPCo	Other Long-term Debt	115.0		Variable	2020

Non-Registrant:
AEP Texas	Pollution Control Bonds	60.0		1.75	2020
AEP Texas	Senior Unsecured Notes	400.0		2.40	2022
AEP Texas	Senior Unsecured Notes	300.0		3.80	2047
KPCo	Pollution Control Bonds	65.0		2.00	2020
KPCo	Senior Unsecured Notes	65.0		3.13	2024
KPCo	Senior Unsecured Notes	40.0		3.35	2027
KPCo	Senior Unsecured Notes	165.0		3.45	2029
KPCo	Senior Unsecured Notes	55.0		4.12	2047
Transource Missouri	Other Long-term Debt	7.0		Variable	2018
Transource Energy	Other Long-term Debt	132.1		Variable	2020
Total Issuances		$	2,771.1


(a)	Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in millions)		(%)
APCo	Senior Unsecured Notes	$	250.0	5.00	2017
APCo	Securitization Bonds	23.5		2.008	2024
APCo	Pollution Control Bonds	104.4		Variable	2017
I&M	Notes Payable	4.9		Variable	2017
I&M	Pollution Control Bonds	25.0		Variable	2017
I&M	Notes Payable	22.3		Variable	2019
I&M	Notes Payable	23.6		Variable	2019
I&M	Notes Payable	23.9		Variable	2020
I&M	Pollution Control Bonds	52.0		Variable	2017
I&M	Notes Payable	24.3		Variable	2021
I&M	Other Long-term Debt	1.1		6.00	2025
I&M	Pollution Control Bonds	50.0		Variable	2025
OPCo	Securitization Bonds	16.2		0.958	2017
OPCo	Securitization Bonds	22.5		0.958	2018
OPCo	Securitization Bonds	7.6		2.049	2019
OPCo	Other Long-term Debt	0.1		1.149	2028
PSO	Other Long-term Debt	0.3		3.00	2027
SWEPCo	Senior Unsecured Notes	250.0		5.55	2017
SWEPCo	Other Long-term Debt	100.0		Variable	2017
SWEPCo	Other Long-term Debt	0.2		3.50	2023
SWEPCo	Other Long-term Debt	0.1		4.28	2023
SWEPCo	Notes Payable	3.3		4.58	2032

Non-Registrant:
AEGCo	Senior Unsecured Notes	152.7		6.33	2037
AGR	Other Long-term Debt	500.0		Variable	2017
KPCo	Pollution Control Bonds	65.0		Variable	2017
KPCo	Senior Unsecured Notes	325.0		6.00	2017
TCC	Securitization Bonds	27.2		0.88	2017
TCC	Securitization Bonds	161.2		5.17	2018
TCC	Pollution Control Bonds	60.0		5.20	2030
Transource Missouri	Other Long-term Debt	130.8		Variable	2018
Total Retirements and Principal Payments		$	2,427.2

In October 2017, I&M retired $1 million of Notes Payable related to DCC Fuel.

In October 2017, AEP Texas retired $41 million of 5.625% Pollution Control Bonds due in 2017.

Debt Covenants (Applies to AEP and AEPTCo)

Dividend Restrictions

Utility Subsidiaries’ Restrictions

As of September 30, 2017, the Federal Power Act restriction does not limit the ability of the AEP subsidiaries to pay dividends out of retained earnings.

Parent Restrictions (Applies to AEP)

Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries)



	Maximum				Average				Net Loans to
	Borrowings		Maximum		Borrowings		Average		(Borrowings from)			Authorized
	from the		Loans to the		from the		Loans to the		the Utility Money			Short-term
	Utility		Utility		Utility		Utility		Pool as of			Borrowing
Company	Money Pool		Money Pool		Money Pool		Money Pool		September 30, 2017			Limit
	(in millions)
AEPTCo	$	467.2	$	194.8	$	235.7	$	19.3	$	162.9		$	795.0	(a)
APCo	231.5		160.7		152.2		32.2		(45.9		)	600.0
I&M	367.4		12.6		205.7		12.6		(164.9		)	500.0
OPCo	280.6		56.2		141.0		27.9		(167.6		)	400.0
PSO	185.2		—		121.3		—		(118.0		)	300.0
SWEPCo	187.5		178.6		109.6		169.5		(48.3		)	350.0


(a)	Amount represents the combined authorized short-term borrowing limit the State Transcos have from FERC or state regulatory commissions.



Maximum		Average		Loans
Loans		Loans		to the Nonutility
to the Nonutility		to the Nonutility		Money Pool as of
Money Pool		Money Pool		September 30, 2017
(in millions)
$	2.0	$	2.0	$	2.0

Maximum

Average

Borrowings from

Loans to

Authorized

Borrowings

Loans

Borrowings

Loans

AEP as of

Short-term

from AEP

to AEP

from AEP

to AEP

September 30, 2017

Borrowing Limit

(in millions)

1.1

151.9

1.1

38.9

0.9

96.1

75.0

(a)


(a)	Amount represents the combined authorized short-term borrowing limit the State Transcos have from FERC or state regulatory commissions.

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Nine Months Ended September 30,
	2017		2016
Maximum Interest Rate	1.49	%	0.91	%
Minimum Interest Rate	0.92	%	0.69	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Nine Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
AEPTCo	1.36	%	0.82	%	1.04	%	0.74	%
APCo	1.24	%	0.78	%	1.28	%	0.79	%
I&M	1.24	%	0.73	%	1.27	%	0.78	%
OPCo	1.40	%	0.85	%	0.98	%	0.74	%
PSO	1.30	%	0.76	%	—	%	0.81	%
SWEPCo	1.26	%	0.79	%	0.98	%	0.91	%

Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool are summarized for Mutual Energy SWEPCo, LP in the following table:



	Maximum		Minimum		Average
	Interest Rate		Interest Rate		Interest Rate
Nine Months	for Funds Loaned		for Funds Loaned		for Funds Loaned
Ended	to the Nonutility		to the Nonutility		to the Nonutility
September 30,	Money Pool		Money Pool		Money Pool
2017	1.49	%	—	%	1.27	%
2016	0.91	%	0.69	%	0.79	%

AEPTCo’s maximum, minimum and average interest rates for funds either borrowed from or loaned to AEP are summarized in the following table:



	Maximum		Minimum		Maximum		Minimum		Average		Average
	Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate
Nine Months	for Funds		for Funds		for Funds		for Funds		for Funds		for Funds
Ended	Borrowed		Borrowed		Loaned		Loaned		Borrowed		Loaned
September 30,	from AEP		from AEP		to AEP		to AEP		from AEP		to AEP
2017	1.49	%	0.92	%	1.49	%	0.92	%	1.27	%	1.31	%
2016	0.91	%	0.69	%	0.91	%	0.69	%	0.80	%	0.81	%

Short-term Debt (Applies to AEP and SWEPCo)

Outstanding short-term debt was as follows:



		September 30, 2017				December 31, 2016
Company	Type of Debt	Outstanding Amount		Interest Rate (a)		Outstanding Amount		Interest Rate (a)
		(in millions)				(in millions)
AEP	Securitized Debt for Receivables (b)	$	750.0	1.17	%	$	673.0	0.70	%
AEP	Commercial Paper	295.0		1.39	%	1,040.0		1.02	%
SWEPCo	Notes Payable	14.3		2.88	%	—		—	%
	Total Short-term Debt	$	1,059.3			$	1,713.0


(a)	Weighted average rate.


(b)	Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance.

Credit Facilities

For a discussion of credit facilities, see “Letters of Credit” section of Note 5.

Securitized Accounts Receivables – AEP Credit (Applies to AEP)

AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2019.

Accounts receivable information for AEP Credit is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(dollars in millions)
Effective Interest Rates on Securitization of Accounts Receivable	1.33		%	0.73		%	1.17		%	0.65		%
Net Uncollectible Accounts Receivable Written Off	$	7.0		$	7.7		$	18.2		$	17.5



	September 30, 2017		December 31, 2016
	(in millions)
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts	$	939.8	$	945.0
Short-term – Securitized Debt of Receivables	750.0		673.0
Delinquent Securitized Accounts Receivable	44.3		42.7
Bad Debt Reserves Related to Securitization	27.8		27.7
Unbilled Receivables Related to Securitization	264.2		322.1

AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due.

Securitized Accounts Receivables – AEP Credit (Applies to Registrant Subsidiaries, except AEPTCo)

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary was as follows:



Company	September 30, 2017		December 31, 2016
	(in millions)
APCo	$	116.9	$	142.0
I&M	132.7		136.7
OPCo	356.3		388.3
PSO	143.4		110.4
SWEPCo	167.1		130.9

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
	(in millions)
APCo	$	1.5	$	1.6	$	4.2	$	5.4
I&M	1.8		2.0		4.9		5.6
OPCo	6.1		8.1		16.5		23.4
PSO	2.0		1.8		5.2		4.7
SWEPCo	2.0		2.1		5.4		5.3

The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
	(in millions)
APCo	$	335.5	$	361.7	$	1,029.4	$	1,071.6
I&M	409.9		448.0		1,218.9		1,220.2
OPCo	616.3		750.9		1,741.7		2,011.2
PSO	407.0		390.6		1,022.6		971.9
SWEPCo	455.0		460.4		1,200.8		1,183.9

Public Service Co Of Oklahoma [Member]

Financing Activities

FINANCING ACTIVITIES

The disclosures in this note apply to all Registrants, unless indicated otherwise.

Long-term Debt Outstanding (Applies to AEP)

The following table details long-term debt outstanding:



Type of Debt	September 30, 2017		December 31, 2016
	(in millions)
Senior Unsecured Notes	$	16,038.6	$	14,761.0	(b)
Pollution Control Bonds	1,612.4		1,725.1
Notes Payable	224.5		326.9
Securitization Bonds	1,449.4		1,705.0
Spent Nuclear Fuel Obligation (a)	267.9		266.3
Other Long-term Debt	1,128.9		1,606.9
Total Long-term Debt Outstanding	20,721.7		20,391.2		(b)
Long-term Debt Due Within One Year	2,359.3		3,013.4		(b)
Long-term Debt	$	18,362.4	$	17,377.8	(b)

(a)


(b)	Amounts include debt related to the Lawrenceburg Plant that has been classified as Liabilities Held for Sale on the balance sheet. See “Gavin, Waterford, Darby and Lawrenceburg Plants (Generation & Marketing Segment)” section of Note 6 for additional information.

Long-term Debt Activity

Long-term debt and other securities issued, retired and principal payments made during the first nine months of 2017 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in millions)		(%)
AEPTCo	Senior Unsecured Notes	$	125.0	3.10	2026
AEPTCo	Senior Unsecured Notes	500.0		3.75	2047
APCo	Senior Unsecured Notes	325.0		3.30	2027
I&M	Pollution Control Bonds	25.0		Variable	2019
I&M	Pollution Control Bonds	40.0		2.05	2021
I&M	Pollution Control Bonds	52.0		Variable	2021
I&M	Senior Unsecured Notes	300.0		3.75	2047
SWEPCo	Other Long-term Debt	115.0		Variable	2020

Non-Registrant:
AEP Texas	Pollution Control Bonds	60.0		1.75	2020
AEP Texas	Senior Unsecured Notes	400.0		2.40	2022
AEP Texas	Senior Unsecured Notes	300.0		3.80	2047
KPCo	Pollution Control Bonds	65.0		2.00	2020
KPCo	Senior Unsecured Notes	65.0		3.13	2024
KPCo	Senior Unsecured Notes	40.0		3.35	2027
KPCo	Senior Unsecured Notes	165.0		3.45	2029
KPCo	Senior Unsecured Notes	55.0		4.12	2047
Transource Missouri	Other Long-term Debt	7.0		Variable	2018
Transource Energy	Other Long-term Debt	132.1		Variable	2020
Total Issuances		$	2,771.1


(a)	Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in millions)		(%)
APCo	Senior Unsecured Notes	$	250.0	5.00	2017
APCo	Securitization Bonds	23.5		2.008	2024
APCo	Pollution Control Bonds	104.4		Variable	2017
I&M	Notes Payable	4.9		Variable	2017
I&M	Pollution Control Bonds	25.0		Variable	2017
I&M	Notes Payable	22.3		Variable	2019
I&M	Notes Payable	23.6		Variable	2019
I&M	Notes Payable	23.9		Variable	2020
I&M	Pollution Control Bonds	52.0		Variable	2017
I&M	Notes Payable	24.3		Variable	2021
I&M	Other Long-term Debt	1.1		6.00	2025
I&M	Pollution Control Bonds	50.0		Variable	2025
OPCo	Securitization Bonds	16.2		0.958	2017
OPCo	Securitization Bonds	22.5		0.958	2018
OPCo	Securitization Bonds	7.6		2.049	2019
OPCo	Other Long-term Debt	0.1		1.149	2028
PSO	Other Long-term Debt	0.3		3.00	2027
SWEPCo	Senior Unsecured Notes	250.0		5.55	2017
SWEPCo	Other Long-term Debt	100.0		Variable	2017
SWEPCo	Other Long-term Debt	0.2		3.50	2023
SWEPCo	Other Long-term Debt	0.1		4.28	2023
SWEPCo	Notes Payable	3.3		4.58	2032

Non-Registrant:
AEGCo	Senior Unsecured Notes	152.7		6.33	2037
AGR	Other Long-term Debt	500.0		Variable	2017
KPCo	Pollution Control Bonds	65.0		Variable	2017
KPCo	Senior Unsecured Notes	325.0		6.00	2017
TCC	Securitization Bonds	27.2		0.88	2017
TCC	Securitization Bonds	161.2		5.17	2018
TCC	Pollution Control Bonds	60.0		5.20	2030
Transource Missouri	Other Long-term Debt	130.8		Variable	2018
Total Retirements and Principal Payments		$	2,427.2

In October 2017, I&M retired $1 million of Notes Payable related to DCC Fuel.

In October 2017, AEP Texas retired $41 million of 5.625% Pollution Control Bonds due in 2017.

Debt Covenants (Applies to AEP and AEPTCo)

Dividend Restrictions

Utility Subsidiaries’ Restrictions

As of September 30, 2017, the Federal Power Act restriction does not limit the ability of the AEP subsidiaries to pay dividends out of retained earnings.

Parent Restrictions (Applies to AEP)

Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries)



	Maximum				Average				Net Loans to
	Borrowings		Maximum		Borrowings		Average		(Borrowings from)			Authorized
	from the		Loans to the		from the		Loans to the		the Utility Money			Short-term
	Utility		Utility		Utility		Utility		Pool as of			Borrowing
Company	Money Pool		Money Pool		Money Pool		Money Pool		September 30, 2017			Limit
	(in millions)
AEPTCo	$	467.2	$	194.8	$	235.7	$	19.3	$	162.9		$	795.0	(a)
APCo	231.5		160.7		152.2		32.2		(45.9		)	600.0
I&M	367.4		12.6		205.7		12.6		(164.9		)	500.0
OPCo	280.6		56.2		141.0		27.9		(167.6		)	400.0
PSO	185.2		—		121.3		—		(118.0		)	300.0
SWEPCo	187.5		178.6		109.6		169.5		(48.3		)	350.0


(a)	Amount represents the combined authorized short-term borrowing limit the State Transcos have from FERC or state regulatory commissions.



Maximum		Average		Loans
Loans		Loans		to the Nonutility
to the Nonutility		to the Nonutility		Money Pool as of
Money Pool		Money Pool		September 30, 2017
(in millions)
$	2.0	$	2.0	$	2.0

Maximum

Average

Borrowings from

Loans to

Authorized

Borrowings

Loans

Borrowings

Loans

AEP as of

Short-term

from AEP

to AEP

from AEP

to AEP

September 30, 2017

Borrowing Limit

(in millions)

1.1

151.9

1.1

38.9

0.9

96.1

75.0

(a)


(a)	Amount represents the combined authorized short-term borrowing limit the State Transcos have from FERC or state regulatory commissions.

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Nine Months Ended September 30,
	2017		2016
Maximum Interest Rate	1.49	%	0.91	%
Minimum Interest Rate	0.92	%	0.69	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Nine Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
AEPTCo	1.36	%	0.82	%	1.04	%	0.74	%
APCo	1.24	%	0.78	%	1.28	%	0.79	%
I&M	1.24	%	0.73	%	1.27	%	0.78	%
OPCo	1.40	%	0.85	%	0.98	%	0.74	%
PSO	1.30	%	0.76	%	—	%	0.81	%
SWEPCo	1.26	%	0.79	%	0.98	%	0.91	%

Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool are summarized for Mutual Energy SWEPCo, LP in the following table:



	Maximum		Minimum		Average
	Interest Rate		Interest Rate		Interest Rate
Nine Months	for Funds Loaned		for Funds Loaned		for Funds Loaned
Ended	to the Nonutility		to the Nonutility		to the Nonutility
September 30,	Money Pool		Money Pool		Money Pool
2017	1.49	%	—	%	1.27	%
2016	0.91	%	0.69	%	0.79	%

AEPTCo’s maximum, minimum and average interest rates for funds either borrowed from or loaned to AEP are summarized in the following table:



	Maximum		Minimum		Maximum		Minimum		Average		Average
	Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate
Nine Months	for Funds		for Funds		for Funds		for Funds		for Funds		for Funds
Ended	Borrowed		Borrowed		Loaned		Loaned		Borrowed		Loaned
September 30,	from AEP		from AEP		to AEP		to AEP		from AEP		to AEP
2017	1.49	%	0.92	%	1.49	%	0.92	%	1.27	%	1.31	%
2016	0.91	%	0.69	%	0.91	%	0.69	%	0.80	%	0.81	%

Short-term Debt (Applies to AEP and SWEPCo)

Outstanding short-term debt was as follows:



		September 30, 2017				December 31, 2016
Company	Type of Debt	Outstanding Amount		Interest Rate (a)		Outstanding Amount		Interest Rate (a)
		(in millions)				(in millions)
AEP	Securitized Debt for Receivables (b)	$	750.0	1.17	%	$	673.0	0.70	%
AEP	Commercial Paper	295.0		1.39	%	1,040.0		1.02	%
SWEPCo	Notes Payable	14.3		2.88	%	—		—	%
	Total Short-term Debt	$	1,059.3			$	1,713.0


(a)	Weighted average rate.


(b)	Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance.

Credit Facilities

For a discussion of credit facilities, see “Letters of Credit” section of Note 5.

Securitized Accounts Receivables – AEP Credit (Applies to AEP)

AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2019.

Accounts receivable information for AEP Credit is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(dollars in millions)
Effective Interest Rates on Securitization of Accounts Receivable	1.33		%	0.73		%	1.17		%	0.65		%
Net Uncollectible Accounts Receivable Written Off	$	7.0		$	7.7		$	18.2		$	17.5



	September 30, 2017		December 31, 2016
	(in millions)
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts	$	939.8	$	945.0
Short-term – Securitized Debt of Receivables	750.0		673.0
Delinquent Securitized Accounts Receivable	44.3		42.7
Bad Debt Reserves Related to Securitization	27.8		27.7
Unbilled Receivables Related to Securitization	264.2		322.1

AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due.

Securitized Accounts Receivables – AEP Credit (Applies to Registrant Subsidiaries, except AEPTCo)

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary was as follows:



Company	September 30, 2017		December 31, 2016
	(in millions)
APCo	$	116.9	$	142.0
I&M	132.7		136.7
OPCo	356.3		388.3
PSO	143.4		110.4
SWEPCo	167.1		130.9

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
	(in millions)
APCo	$	1.5	$	1.6	$	4.2	$	5.4
I&M	1.8		2.0		4.9		5.6
OPCo	6.1		8.1		16.5		23.4
PSO	2.0		1.8		5.2		4.7
SWEPCo	2.0		2.1		5.4		5.3

The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
	(in millions)
APCo	$	335.5	$	361.7	$	1,029.4	$	1,071.6
I&M	409.9		448.0		1,218.9		1,220.2
OPCo	616.3		750.9		1,741.7		2,011.2
PSO	407.0		390.6		1,022.6		971.9
SWEPCo	455.0		460.4		1,200.8		1,183.9

Southwestern Electric Power Co [Member]

Financing Activities

FINANCING ACTIVITIES

The disclosures in this note apply to all Registrants, unless indicated otherwise.

Long-term Debt Outstanding (Applies to AEP)

The following table details long-term debt outstanding:



Type of Debt	September 30, 2017		December 31, 2016
	(in millions)
Senior Unsecured Notes	$	16,038.6	$	14,761.0	(b)
Pollution Control Bonds	1,612.4		1,725.1
Notes Payable	224.5		326.9
Securitization Bonds	1,449.4		1,705.0
Spent Nuclear Fuel Obligation (a)	267.9		266.3
Other Long-term Debt	1,128.9		1,606.9
Total Long-term Debt Outstanding	20,721.7		20,391.2		(b)
Long-term Debt Due Within One Year	2,359.3		3,013.4		(b)
Long-term Debt	$	18,362.4	$	17,377.8	(b)

(a)


(b)	Amounts include debt related to the Lawrenceburg Plant that has been classified as Liabilities Held for Sale on the balance sheet. See “Gavin, Waterford, Darby and Lawrenceburg Plants (Generation & Marketing Segment)” section of Note 6 for additional information.

Long-term Debt Activity

Long-term debt and other securities issued, retired and principal payments made during the first nine months of 2017 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in millions)		(%)
AEPTCo	Senior Unsecured Notes	$	125.0	3.10	2026
AEPTCo	Senior Unsecured Notes	500.0		3.75	2047
APCo	Senior Unsecured Notes	325.0		3.30	2027
I&M	Pollution Control Bonds	25.0		Variable	2019
I&M	Pollution Control Bonds	40.0		2.05	2021
I&M	Pollution Control Bonds	52.0		Variable	2021
I&M	Senior Unsecured Notes	300.0		3.75	2047
SWEPCo	Other Long-term Debt	115.0		Variable	2020

Non-Registrant:
AEP Texas	Pollution Control Bonds	60.0		1.75	2020
AEP Texas	Senior Unsecured Notes	400.0		2.40	2022
AEP Texas	Senior Unsecured Notes	300.0		3.80	2047
KPCo	Pollution Control Bonds	65.0		2.00	2020
KPCo	Senior Unsecured Notes	65.0		3.13	2024
KPCo	Senior Unsecured Notes	40.0		3.35	2027
KPCo	Senior Unsecured Notes	165.0		3.45	2029
KPCo	Senior Unsecured Notes	55.0		4.12	2047
Transource Missouri	Other Long-term Debt	7.0		Variable	2018
Transource Energy	Other Long-term Debt	132.1		Variable	2020
Total Issuances		$	2,771.1


(a)	Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in millions)		(%)
APCo	Senior Unsecured Notes	$	250.0	5.00	2017
APCo	Securitization Bonds	23.5		2.008	2024
APCo	Pollution Control Bonds	104.4		Variable	2017
I&M	Notes Payable	4.9		Variable	2017
I&M	Pollution Control Bonds	25.0		Variable	2017
I&M	Notes Payable	22.3		Variable	2019
I&M	Notes Payable	23.6		Variable	2019
I&M	Notes Payable	23.9		Variable	2020
I&M	Pollution Control Bonds	52.0		Variable	2017
I&M	Notes Payable	24.3		Variable	2021
I&M	Other Long-term Debt	1.1		6.00	2025
I&M	Pollution Control Bonds	50.0		Variable	2025
OPCo	Securitization Bonds	16.2		0.958	2017
OPCo	Securitization Bonds	22.5		0.958	2018
OPCo	Securitization Bonds	7.6		2.049	2019
OPCo	Other Long-term Debt	0.1		1.149	2028
PSO	Other Long-term Debt	0.3		3.00	2027
SWEPCo	Senior Unsecured Notes	250.0		5.55	2017
SWEPCo	Other Long-term Debt	100.0		Variable	2017
SWEPCo	Other Long-term Debt	0.2		3.50	2023
SWEPCo	Other Long-term Debt	0.1		4.28	2023
SWEPCo	Notes Payable	3.3		4.58	2032

Non-Registrant:
AEGCo	Senior Unsecured Notes	152.7		6.33	2037
AGR	Other Long-term Debt	500.0		Variable	2017
KPCo	Pollution Control Bonds	65.0		Variable	2017
KPCo	Senior Unsecured Notes	325.0		6.00	2017
TCC	Securitization Bonds	27.2		0.88	2017
TCC	Securitization Bonds	161.2		5.17	2018
TCC	Pollution Control Bonds	60.0		5.20	2030
Transource Missouri	Other Long-term Debt	130.8		Variable	2018
Total Retirements and Principal Payments		$	2,427.2

In October 2017, I&M retired $1 million of Notes Payable related to DCC Fuel.

In October 2017, AEP Texas retired $41 million of 5.625% Pollution Control Bonds due in 2017.

Debt Covenants (Applies to AEP and AEPTCo)

Dividend Restrictions

Utility Subsidiaries’ Restrictions

As of September 30, 2017, the Federal Power Act restriction does not limit the ability of the AEP subsidiaries to pay dividends out of retained earnings.

Parent Restrictions (Applies to AEP)

Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries)



	Maximum				Average				Net Loans to
	Borrowings		Maximum		Borrowings		Average		(Borrowings from)			Authorized
	from the		Loans to the		from the		Loans to the		the Utility Money			Short-term
	Utility		Utility		Utility		Utility		Pool as of			Borrowing
Company	Money Pool		Money Pool		Money Pool		Money Pool		September 30, 2017			Limit
	(in millions)
AEPTCo	$	467.2	$	194.8	$	235.7	$	19.3	$	162.9		$	795.0	(a)
APCo	231.5		160.7		152.2		32.2		(45.9		)	600.0
I&M	367.4		12.6		205.7		12.6		(164.9		)	500.0
OPCo	280.6		56.2		141.0		27.9		(167.6		)	400.0
PSO	185.2		—		121.3		—		(118.0		)	300.0
SWEPCo	187.5		178.6		109.6		169.5		(48.3		)	350.0


(a)	Amount represents the combined authorized short-term borrowing limit the State Transcos have from FERC or state regulatory commissions.



Maximum		Average		Loans
Loans		Loans		to the Nonutility
to the Nonutility		to the Nonutility		Money Pool as of
Money Pool		Money Pool		September 30, 2017
(in millions)
$	2.0	$	2.0	$	2.0

Maximum

Average

Borrowings from

Loans to

Authorized

Borrowings

Loans

Borrowings

Loans

AEP as of

Short-term

from AEP

to AEP

from AEP

to AEP

September 30, 2017

Borrowing Limit

(in millions)

1.1

151.9

1.1

38.9

0.9

96.1

75.0

(a)


(a)	Amount represents the combined authorized short-term borrowing limit the State Transcos have from FERC or state regulatory commissions.

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Nine Months Ended September 30,
	2017		2016
Maximum Interest Rate	1.49	%	0.91	%
Minimum Interest Rate	0.92	%	0.69	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Nine Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
AEPTCo	1.36	%	0.82	%	1.04	%	0.74	%
APCo	1.24	%	0.78	%	1.28	%	0.79	%
I&M	1.24	%	0.73	%	1.27	%	0.78	%
OPCo	1.40	%	0.85	%	0.98	%	0.74	%
PSO	1.30	%	0.76	%	—	%	0.81	%
SWEPCo	1.26	%	0.79	%	0.98	%	0.91	%

Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool are summarized for Mutual Energy SWEPCo, LP in the following table:



	Maximum		Minimum		Average
	Interest Rate		Interest Rate		Interest Rate
Nine Months	for Funds Loaned		for Funds Loaned		for Funds Loaned
Ended	to the Nonutility		to the Nonutility		to the Nonutility
September 30,	Money Pool		Money Pool		Money Pool
2017	1.49	%	—	%	1.27	%
2016	0.91	%	0.69	%	0.79	%

AEPTCo’s maximum, minimum and average interest rates for funds either borrowed from or loaned to AEP are summarized in the following table:



	Maximum		Minimum		Maximum		Minimum		Average		Average
	Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate
Nine Months	for Funds		for Funds		for Funds		for Funds		for Funds		for Funds
Ended	Borrowed		Borrowed		Loaned		Loaned		Borrowed		Loaned
September 30,	from AEP		from AEP		to AEP		to AEP		from AEP		to AEP
2017	1.49	%	0.92	%	1.49	%	0.92	%	1.27	%	1.31	%
2016	0.91	%	0.69	%	0.91	%	0.69	%	0.80	%	0.81	%

Short-term Debt (Applies to AEP and SWEPCo)

Outstanding short-term debt was as follows:



		September 30, 2017				December 31, 2016
Company	Type of Debt	Outstanding Amount		Interest Rate (a)		Outstanding Amount		Interest Rate (a)
		(in millions)				(in millions)
AEP	Securitized Debt for Receivables (b)	$	750.0	1.17	%	$	673.0	0.70	%
AEP	Commercial Paper	295.0		1.39	%	1,040.0		1.02	%
SWEPCo	Notes Payable	14.3		2.88	%	—		—	%
	Total Short-term Debt	$	1,059.3			$	1,713.0


(a)	Weighted average rate.


(b)	Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance.

Credit Facilities

For a discussion of credit facilities, see “Letters of Credit” section of Note 5.

Securitized Accounts Receivables – AEP Credit (Applies to AEP)

AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2019.

Accounts receivable information for AEP Credit is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(dollars in millions)
Effective Interest Rates on Securitization of Accounts Receivable	1.33		%	0.73		%	1.17		%	0.65		%
Net Uncollectible Accounts Receivable Written Off	$	7.0		$	7.7		$	18.2		$	17.5



	September 30, 2017		December 31, 2016
	(in millions)
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts	$	939.8	$	945.0
Short-term – Securitized Debt of Receivables	750.0		673.0
Delinquent Securitized Accounts Receivable	44.3		42.7
Bad Debt Reserves Related to Securitization	27.8		27.7
Unbilled Receivables Related to Securitization	264.2		322.1

AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due.

Securitized Accounts Receivables – AEP Credit (Applies to Registrant Subsidiaries, except AEPTCo)

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary was as follows:



Company	September 30, 2017		December 31, 2016
	(in millions)
APCo	$	116.9	$	142.0
I&M	132.7		136.7
OPCo	356.3		388.3
PSO	143.4		110.4
SWEPCo	167.1		130.9

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
	(in millions)
APCo	$	1.5	$	1.6	$	4.2	$	5.4
I&M	1.8		2.0		4.9		5.6
OPCo	6.1		8.1		16.5		23.4
PSO	2.0		1.8		5.2		4.7
SWEPCo	2.0		2.1		5.4		5.3

The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2017		2016		2017		2016
	(in millions)
APCo	$	335.5	$	361.7	$	1,029.4	$	1,071.6
I&M	409.9		448.0		1,218.9		1,220.2
OPCo	616.3		750.9		1,741.7		2,011.2
PSO	407.0		390.6		1,022.6		971.9
SWEPCo	455.0		460.4		1,200.8		1,183.9