BYLAWS
                                       OF
                       SOUTHWESTERN ELECTRIC POWER COMPANY
                            (A Delaware Corporation)
                 (A Member of the Central and South West System)

                          As amended to April 27, 2000
                           (Recompiled April 27, 2000)

                                    ARTICLE I

                                     Offices

            The Corporation may maintain  offices at such places as the Board of
Directors may, from time to time, appoint.


                                   ARTICLE II

                                      Seal

            The corporate seal of the Corporation  shall have inscribed  thereon
the name of the Corporation and the words "Corporate Seal,  Delaware";  and such
seal may be facsimile.


                                 ARTICLE III

                              Stock and Transfers

            Section 1. Each  holder of fully paid stock  shall be  entitled to a
certificate or certificates of stock, stating the number of shares owned by such
stockholder  and the  designation  of the class  (and  series,  if any) in which
issued.  All stock  certificates shall be signed by the Chairman of the Company,
the  President,  or a  Vice  President  of  the  Corporation,  and  also  by the
Treasurer,  the Secretary,  an Assistant Treasurer, or an Assistant Secretary of
the  Corporation  and shall be sealed with the corporate seal of the Corporation
or a facsimile  thereof;  provided,  that,  however,  if such  certificates  are
countersigned  by  a  Transfer  Agent  and/or  registered  by a  Registrar,  the
signature  of any such  Chairman  of the  Company,  President,  Vice  President,
Treasurer,  Secretary,  Assistant  Treasurer,  or  Assistant  Secretary  may  be
facsimile. Any such Transfer Agent or Registrar shall be a person other than the
Corporation or employee of the  Corporation,  and shall be duly appointed by the
Board of Directors.  In case any one or more of such officers of the Corporation
who have signed or whose facsimile  signature or signatures have been reproduced
upon any such  certificate or certificates  shall have ceased to be such officer
or officers of the Corporation  before such  certificate or  certificates  shall
have  been  issued  or  delivered  by  the  Corporation,   such  certificate  or
certificates may be issued and delivered by

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the  Corporation  with the same  effect as if such  former  officer or  officers
remained in office at the date of such issuance or delivery.

            Section 2. Shares of stock of the Corporation  shall be transferable
only on the books of the  Corporation  and, except (a) as may be required by law
or by the  order  of a  court  in some  proper  proceeding,  (b) as  hereinafter
provided,  or (c) as the Board of Directors may otherwise  expressly  provide by
resolution from time to time,  shall be transferred only upon the assignment and
surrender of the issued  certificate or certificates  representing  such shares.
Except as the Board of Directors may otherwise  provide by resolution  from time
to time, in the event any issued certificate representing shares of stock of the
Corporation  shall be lost,  destroyed or stolen,  the holder thereof may have a
new certificate  for an equivalent  number of shares of the same class issued to
him in lieu of and to replace such lost,  destroyed or stolen  certificate  upon
producing  evidence,  satisfactory  to the  Board of  Directors,  of such  loss,
destruction or theft and upon furnishing to the Corporation a bond of indemnity,
deemed sufficient by the Board of Directors,  to protect the Corporation against
any loss,  damage or  liability  that may be  sustained  by reason of such lost,
destroyed  or stolen  certificate  and the  issuance and delivery of such new or
replacement certificate.

            Section 3. The stock transfer books of the Corporation may be closed
by order of the  Board  of  Directors  for a period  not  exceeding  fifty  days
preceding the date of any meeting of stockholders or the date for the payment of
any dividend or the date for the allotment of rights or the date when any change
or  conversion  or exchange of capital  stock shall go into  effect.  In lieu of
closing  the  stock  transfer  books as  aforesaid,  the Board of  Directors  is
authorized,  in its  discretion,  to fix in advance a date, not exceeding  fifty
days  preceding  the date of any  meeting  of  stockholders  or the date for the
payment of any dividend or the date for the allotment of rights or the date when
any change or conversion or exchange of capital stock shall go into effect, as a
record date for the determination of the stockholders entitled to notice of, and
to vote at, any such meeting and any adjournment thereof, or entitled to receive
payment of any such dividend, or to any such allotment of rights, or to exercise
the rights in respect of any such  change,  conversion  or  exchange  of capital
stock,  and in such case  only such  stockholders  as shall be  stockholders  of
record on the date so fixed shall be entitled to such notice of, and to vote at,
such  meeting  and  any  adjournment  thereof,  or to  receive  payment  of such
dividend, or to receive such allotment of rights, or to exercise such rights, as
the case may be,  notwithstanding  any transfer of any stock on the books of the
Corporation after any such record date fixed as aforesaid.


                                  ARTICLE IV

                            Meeting of Stockholders

            Section 1. The annual meeting of the stockholders of the Corporation
shall be held on the second Wednesday in April of each year or on such other day

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as may, in any year,  be specified by the Board of  Directors.  Each such annual
meeting  shall be held at such  place  and hour as may be fixed by the  Board of
Directors.

            Section 2. Special meetings of the stockholders may be called by the
Board  of  Directors  or by a  majority  of the  directors  individually,  or by
stockholders  holding not less than one-third in number of the total outstanding
shares of capital  stock of the  Corporation  entitled to vote, or in such other
manner as may be provided in Article Fourth of the Certificate of Incorporation,
as amended,  of the  Corporation,  or as may at any time be provided by statute.
Such special  meetings shall be held at the office of the Corporation  either in
the City of Shreveport,  Louisiana,  or in the City of Wilmington,  Delaware, as
the notice of the meeting may specify.

            Section 3. Notice of the time and place of each annual meeting shall
be sent by mail to the recorded  address of each  stockholder  entitled to vote,
not less than ten days  before the date of the  meeting.  Like  notice  shall be
given of all special  meetings,  except in cases where other  special  method of
notice may be required by statute,  in all which  cases,  the  statutory  method
shall be followed. The notice of a special meeting shall state the object of the
meeting.  Notice of meetings may in all cases be waived by stockholders entitled
to notice.

            Section 4. At all  meetings  of  stockholders,  except as  otherwise
provided in Article Fourth of the Certificate of  Incorporation,  as amended,  a
majority of the number of shares of stock  outstanding and entitled to vote must
be  represented  in order to  constitute  a quorum  for the  transaction  of any
business  other than (a)  adjourning  from time to time until a quorum  shall be
obtained,  or (b) adjourning  sine die, and for any such  adjournment a majority
vote of whatever stock shall be represented shall be sufficient.

            Section  5.  At all  stockholders'  meetings,  except  as  otherwise
provided in Article  Fourth of the  Certificate  of  Incorporation,  as amended,
holders of record of stock then  having  voting  power  shall be entitled to one
vote for each share of such stock held by them  respectively,  upon any question
or at any  election,  and such vote may, in all cases,  be given by proxy,  duly
authorized in writing.

            Section 6. A full list of the  stockholders  entitled to vote at the
ensuing  election,  arranged in alphabetical  order, with the residence of each,
and the number of shares held by each,  shall be prepared by the  Secretary  and
filed in the office where the  election is to be held,  at least ten days before
every election,  and shall at all times, during the usual hours for business, be
open to the examination of any stockholder.


                                   ARTICLE V

                                   Directors
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            Section 1. The  property and  business of the  Corporation  shall be
managed by a Board of Directors,  which, except as otherwise provided in Article
Fourth of the  Certificate of  Incorporation,  as amended,  shall consist of not
less than three nor more than thirteen members.  Except as otherwise provided in
Article Fourth of the Certificate of  Incorporation,  as amended,  the Directors
shall be elected by a majority  of votes of the  stockholders  entitled to vote,
present  in  person  or  represented  by  proxy  at the  annual  meeting  of the
stockholders,  and each  Director  shall be elected for a term of one year,  and
until his successor shall be elected and shall qualify.

            Section 2. Except as  otherwise  provided  in Article  Fourth of the
Certificate of Incorporation,  as amended, any vacancy in the Board of Directors
shall be filled by the Board,  and each Director so appointed  shall hold office
until the next annual  election,  and until his successor  shall be duly elected
and qualified.

            Section 3. The Board of Directors may hold its meetings and may have
one or more  offices,  and may keep the  books of the  Corporation  (except  the
original or duplicate stock ledger) outside of Delaware,  at such places as they
may from time to time  determine.  In addition to the powers and  authorities by
these  Bylaws  expressly  conferred  upon them,  the Board may exercise all such
powers of the Corporation,  and do all such lawful acts and things as are not by
law or by these Bylaws required to be exercised or done by the stockholders.

            Section 4. Without  prejudice to the general powers conferred by the
last  preceding  clause,  it is  hereby  expressly  declared  that the  Board of
Directors shall have the following powers, that is to say:

            1. From time to time to make and change rules and  regulations,  not
inconsistent with these Bylaws, for the management of the Corporation's business
and affairs.

            2. From time to time, as and when and upon such terms and conditions
as it may determine,  to issue any part of the  authorized  capital stock of the
Corporation.

            3. To  purchase,  or  otherwise  acquire  for the  Corporation,  any
property,  right or privilege  which the Corporation is authorized to acquire at
such price or  consideration,  and  generally on such terms or  conditions as it
shall think fit.

            4. At its  discretion to pay for any property or rights  acquired by
the Corporation,  either wholly or partly in money, stock, bonds,  debentures or
other securities of the Corporation.

            5. To borrow money, to create and issue mortgages,  bonds,  deeds of
trust,   trust  agreements  and  negotiable  or  transferable   instruments  and
securities,  secured by  mortgage  or  otherwise,  and to do every other act and
thing necessary to effectuate the same.

            6. To appoint and at its  discretion,  remove or suspend any and all
officers, employees and agents, permanently or temporarily, as it may think fit,
and to  determine  their  duties  and fix,  and from time to time  change  their

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duties, salaries, and emoluments, and to require security in such instances, and
in such amounts as it thinks fit.

            7. To confer by resolution upon any officer of the Corporation,  the
power to choose, remove or suspend subordinate officers, employees and agents.

            8. To appoint any person or  corporation to accept and hold in trust
for the Corporation,  any property belonging to the Corporation,  or in which it
is interested,  or for any other  purpose,  and to execute and do all such deeds
and things as may be requisite in relation to any such trust.

            9. To determine who shall be authorized on the Corporation's behalf,
to sign bills, notes, receipts,  acceptances,  endorsements,  checks,  releases,
contracts and other papers and documents.

            10. To delegate  any of the powers of the Board in the course of the
current business of the Corporation to any standing or special committee,  or to
any  officer  or  agent,  or to  appoint  any  persons  to be the  agents of the
Corporation,  with such powers  (including the powers to subdelegate),  and upon
such terms as it shall think fit.


                                  ARTICLE VI

                             Meetings of the Board

            Section  1.  Regular  meetings  of the  Board  of  Directors  of the
Corporation  shall be held at such place and time as may be designated from time
to time by the  Board.  Special  meetings  of the  Board  may be  called  by the
Chairman of the  Company,  if there shall be one, or by the  President,  or by a
Vice President when acting as President, or by any two directors,  upon not less
than  two  days'  notice  to  each  director,  either  personally  or by mail or
telegraph.  Notice of any  meeting  of the Board may be waived in writing by any
director,  either before or after the meeting,  and shall be deemed to have been
waived by his attendance at such meeting.

            Section 2. A majority of the authorized number of directors fixed by
the Bylaws  shall  constitute  a quorum for the  transaction  of business at any
meeting of the Board of Directors,  but a lesser number may adjourn from time to
time until a quorum shall be obtained or may adjourn sine die.

            Section 3. At all meetings of the Board of Directors, the act of the
majority  of the  directors  present  at a meeting  at which a quorum is present
shall be the act of the Board,  unless the act of a greater  number of directors
is required by statute.  The Board shall keep minutes of the  proceedings at its
meetings.  Unless otherwise  restricted by the Certificate of Incorporation,  as
amended,  any action  required  or  permitted  to be taken at any meeting of the
Board or of any  committee  thereof may be taken  without a meeting if, prior to

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such action, a written consent setting forth the action so taken shall be signed
by all members of the Board or of such  committee,  as the case may be, and such
written  consent shall be filed with the minutes of the proceedings of the Board
or of such committee, as the case may be.

            Section 4. All directors of the  Corporation may be allowed such sum
for attendance at any regular or special meeting of the Board as may be fixed by
resolution  of the Board  and shall be  reimbursed  by the  Corporation  for any
out-of-pocket  expenses  incurred for  attendance at any such  meeting.  Nothing
herein  contained  shall be construed  to prevent any director  from serving the
Corporation in any other capacity and receiving compensation therefor.


                                  ARTICLE VII

                                   Officers

            Section 1. There shall be elected by the Board of Directors,  at its
first meeting (if  practicable)  held after the annual  election of directors in
each year, a President, a Secretary, a Treasurer, a Controller,  and if desired,
one or more  Assistant  Secretaries  and  Assistant  Treasurers,  and  Assistant
Controllers. The Board of Directors also may provide for and elect, at any time,
a Chairman of the Company, a General Manager,  one or more Vice Presidents,  and
such other officers, and prescribe such duties for them, respectively, as in the
judgment of the Board of Directors  may be required from time to time to conduct
the business of the Corporation.  Any two or more offices, except the offices of
President and Vice  President,  President and  Secretary,  President and General
Manager,  and Chairman and any other office, may be held by the same person. All
officers elected by the Board of Directors shall hold their respective  offices,
unless sooner terminated, until the first meeting of the Board of Directors held
after the next ensuing annual  election of directors and until their  respective
successors, willing to serve, shall have been duly elected and qualified. Any of
such  officers may be removed from their  respective  offices at the pleasure of
the Board.

            Section 2. The Chairman of the Company, if there shall be one, shall
when  present  preside  at all  meetings  of the  stockholders,  of the Board of
Directors,  and of the Executive Committee, if there shall be one. He shall be a
member of the  Executive  Committee,  if there shall be one,  and may attend any
meeting of any  committee of the Board,  whether or not a member.  He shall have
such other powers and duties as may at any time be  prescribed  by the Bylaws or
by the  Board of  Directors.  In the  event of  death or  incapacitation  of the
President and Chief Executive Officer, the Chairman, if there shall be one shall
assume the duties of the Chief Executive Officer until a successor is elected.

            Section 3. The President shall be the Chief Executive Officer of the
Company and shall have general authority over all of the business and affairs of
the Company and over all other  officers,  agents and  employees of the Company.
When the Chairman,  if there shall be one, is not present,  the President  shall
preside at all meetings of the stockholders,  of the Board of Directors,  and of

<PAGE>

the  Executive  Committee,  if there  shall be one.  He shall be a member of the
Executive  Committee,  if there shall be one,  and may attend any meeting of any
committee  of the Board,  whether or not a member.  He shall  have  general  and
active management of the business and affairs of the Company, and full authority
and responsibility with respect to making effective all resolutions of the Board
of Directors. He shall execute bonds, mortgages, contracts and other instruments
requiring  the seal of the  Company to be  affixed,  except  where  required  or
permitted  by law to be  otherwise  signed and  executed,  and except where such
duties  shall be  expressly  delegated  by him or the Board of Directors to some
other officer or agent of the Company. He shall have authority, when neither the
Board of  Directors  nor the  Executive Committee is in session,  to suspend the
authority of any other officer or officers of the Company,  subject, however, to
the pleasure of the Board of Directors  or the  Executive  Committee at its next
meeting, and authority to appoint and to remove and discharge any and all agents
and  employees of the Company not elected or appointed  directly by the Board of
Directors.  He shall  have such  other  powers  and duties as may at any time be
prescribed by the Bylaws or by the Board of Directors.

            Section 4. The  General  Manager,  if one is elected by the Board of
Directors,  shall  have  such  powers  and  duties  as may from  time to time be
prescribed by the Board of Directors.  In case the President,  due to absence or
any other  cause,  shall be  unable  at any time to attend to the  duties of the
office  of  President  requiring  attention,  or  in  the  case  of  his  death,
resignation,  or removal  from  office,  the powers and duties of the  President
shall,  except as the Board of  Directors  may  otherwise  provide,  temporarily
devolve upon the General Manager, and shall be exercised by such General Manager
as acting President during such inability of the President, or until the vacancy
in the  office  of the  President  shall  be  filled.  In case  of the  absence,
disability,  death, resignation, or removal from office of the President and the
General  Manager,  the Board of  Directors  shall  elect one of its  members  to
exercise  the  powers  and  duties  of the  President  during  such  absence  or
disability, or until the vacancy in one of said offices shall be filled.

            Section  5. The Vice  President,  if one is  elected by the Board of
Directors,  or Vice  Presidents,  if more  than one is  elected  by the Board of
Directors,  shall  have  such  powers  and  duties  as may from  time to time be
prescribed by the Board of Directors.

            Section 6. The  Secretary  shall attend all meetings of the Board of
Directors,  shall keep a true and faithful  record thereof in proper books to be
provided for that purpose,  and shall have the custody and care of the corporate
seal, records, minutes and stock books of the Corporation.  He shall also act as
Secretary of all stockholders'  meetings,  and keep a record thereof,  except as
some other person may be selected as Secretary by any such meeting, shall keep a
suitable record of the addresses of  stockholders,  and shall,  except as may be
otherwise required by statute or by the Bylaws,  sign, and by order of the Board
of Directors,  issue all notices required for meetings of  stockholders,  and of
the Board of Directors.  Whenever  requested by a requisite number of individual
stockholders,  or  individual  directors,  to  give  notice,  for a  meeting  of
stockholders  or of the  Board of  Directors,  he shall  give  such  notice,  as
requested, and the notice shall state the names of the stockholders or directors
making the request.  He shall;  sign all mortgages,  and all other documents and

<PAGE>

papers to which his signature may be necessary or  appropriate,  shall affix the
seal of the  Corporation to all  instruments  requiring the seal, and shall have
such  other  powers  and  duties as are  commonly  incidental  to the  office of
Secretary,  or as may be  prescribed  for him. He shall be sworn to the faithful
discharge of his duty.

            Section 7. The Treasurer shall have charge of and be responsible for
the  collection,   receipt,  custody  and  disbursement  of  the  funds  of  the
Corporation, and shall deposit its funds in the name of the Corporation, in such
banks,  trust  companies,  or safe deposit  vaults as the Board of Directors may
direct. He shall have the custody of such books,  receipted vouchers,  and other
books and papers as in the  practical  business  operations  of the  Corporation
shall naturally belong in the office or custody of the Treasurer, or as shall be
placed in his custody by the Board of Directors,  by the Executive Committee, by
the  Chairman of the  Company,  by the  President,  or by a Vice  President or a
General  Manager  when  acting as  President.  He shall also have  charge of the
safekeeping of all stocks,  bonds,  mortgages and other securities  belonging to
the Corporation, but such stocks, bonds, mortgages and other securities shall be
deposited for safekeeping in a safe deposit vault to be approved by the Board of
Directors  or by the  Executive  Committee,  in a box or boxes,  access to which
shall be had as may be provided by  resolution  of the Board of  Directors or of
the  Executive  Committee.  He shall  have such  other  powers and duties as are
commonly incidental to the office of Treasurer, or as may be prescribed for him.
He may be required to give bond to the Corporation for the faithful discharge of
his duties in such form and to such  amount and with such  sureties  as shall be
determined by the Board of Directors.

            Section  8.  The  Controller  shall  have  general  supervision  and
direction of matters pertaining to the function of the Accounting Department and
related  sections,  including all matters  pertaining to preparation of budgets,
statistics,  taxes and corporate matters,  without excluding by this enumeration
any other  accounting  functions  not  mentioned  herein.  He shall have general
supervision over all books and accounts of the Corporation  relating to receipts
and disbursements,  and the form of all vouchers,  accounts, reports and returns
required  by the  various  departments.  He shall see that the  accounts  of all
officers  and  employees  are  examined  from  time  to  time  and as  often  as
practicable,  and that proper returns are made of all receipts from all sources.
He shall be responsible for the audit,  verification and payment of all billings
and voucher  requisitions  for any and all  purposes  which  shall be  submitted
currently to him or to someone he  designates  on his staff.  Payments  shall be
made forthwith if found  satisfactory  and correct unless  deferment is properly
requested and approved.  No payments of billings and voucher  requisitions shall
be made unless previously certified to or approved by the head of the department
in which it originates  and by others  authorized to approve such  disbursements
and unless he is satisfied of its propriety and correctness.  He shall have full
access to all  contracts,  correspondence  and other  papers and  records of the
Corporation  relating  to its  business  matters,  shall have the custody of its
account books, and other papers relating to the accounts of the Corporation, and
shall have such other powers and duties as are commonly incidental to the office
of Controller,  or as may be prescribed for him. He may be required to give bond
to the Corporation for the faithful  discharge of his duties in such form and to
such  amount  and with  such  sureties  as shall be  determined  by the Board of
Directors.

<PAGE>

            Section  9.  Assistant   Controllers,   Assistant   Secretaries  and
Assistant  Treasurers  shall  assist  the  Controller,  the  Secretary  and  the
Treasurer,  respectively,  as  the  case  may  be,  in  the  performance  of the
respective  duties  of such  principal  officers;  and in  case of the  absence,
disability,  death,  resignation  or removal  from office of any such  principal
officer,  the powers  and  duties of such  principal  officer  shall,  except as
otherwise  ordered by the Chairman of the Company,  the President,  the Board of
Directors or the Executive Committee,  temporarily devolve upon his assistant or
senior  assistant if there shall be more than one.  Such  assistants  shall also
perform  such other duties as may be assigned to them from time to time by their
respective principal officers or the Chairman of the Company or the President or
by the Board or the Executive Committee.


                                 ARTICLE VIII

                                Indemnification

            Section  1.  Each  person  who is or was or had  agreed  to become a
Director  or  Officer  of the  Corporation,  or each such  person  who is or was
serving,  or had agreed to serve at the request of the Board of  Directors or an
officer of the Corporation as an employee or agent of the  Corporation,  or as a
Director, officer, employee or agent of another corporation,  partnership, joint
venture,   trust  or  other   enterprise   (including   the  heirs,   executors,
administrators  or  estate of such  person),  shall be  indemnified  (including,
without  limitation,  the  advancement  of  expenses  and  payment  of all loss,
liability and expenses) by the  Corporation to the full extent  permitted by the
General Corporation Law of the State of Delaware or any other applicable laws as
presently in effect, or as may hereafter be amended (but in the case of any such
amendment,  only to the extent that such  amendment  permits the  Corporation to
provide broader  indemnification rights than said laws permitted the Corporation
to provide prior to such amendment);  provided, however, that no person shall be
indemnified  for amounts paid in settlement  unless the terms and  conditions of
such settlement have been consented to by the Corporation,  and provided further
that no  indemnification  for employees or agents of the Corporation (other than
Directors and officers)  will be made without the express  authorization  of the
Corporation's Board of Directors.


                                  ARTICLE IX

                                  Committees

            Section 1. The Board of  Directors  may, by  resolution  passed by a
majority of the whole Board,  appoint an Executive  Committee  consisting of not
less than three members of the Board,  including the Chairman of the Company, if
there  shall  be one,  and  the  President  of the  Corporation.  The  Executive
Committee may make its own rules of procedure and elect its chairman,  and shall
meet  where  and as  provided  by such  rules or by  resolution  of the Board of
Directors.  A majority of the members of the Committee shall constitute a quorum

<PAGE>

for the  transaction of business.  During the intervals  between the meetings of
the Board of Directors the Executive  Committee shall have all the powers of the
Board in the management of the business and affairs of the Corporation including
power to authorize the seal of the Corporation to be affixed to all papers which
may require it, and, by majority  vote of all its members,  may exercise any and
all such  powers  in such  manner  as such  Committee  shall  deem  best for the
interests of the Corporation in all cases in which specific directions shall not
have been given by the Board of Directors.  Vacancies in the Committee  shall be
filled by resolution  passed by a majority of the whole Board of Directors.  The
Executive Committee shall keep regular minutes of its proceedings and report the
same to the Board when required.

            Section  2. The Board of  Directors,  by the  affirmative  vote of a
majority of the whole Board, may appoint any other standing committees, and such
standing  committees  shall  have  and may  exercise  such  powers  as  shall be
authorized by the Bylaws or by the resolution appointing them.


                                   ARTICLE X

                   Order of Business at Directors' Meetings

            Section  1. The  order  of  business  at  meetings  of the  Board of
Directors shall be determined by the Chairman of the Company,  if there shall be
one and he shall be  present,  or by the  President  or other  person  acting as
chairman of the meeting, unless otherwise ordered by the Board.


                                  ARTICLE XI

                              Inspection of Books

            Section 1. The Board of Directors  shall from time to time determine
whether  and to what  extent,  and at what  times and  places,  and  under  what
conditions and regulations,  the accounts and books of the Corporation or any of
them,  shall be open to the inspection of the  stockholders,  and no stockholder
shall  have  any  right  to  inspect  any  account  or book or  document  of the
Corporation,  except as  conferred by statute or as  authorized  by the Board of
Directors or by a resolution of the stockholders.


                                  ARTICLE XII

                                 Miscellaneous

            Section 1. The funds of the  Corporation  shall be  deposited to its
credit  in such  banks or trust  companies  as the  Board of  Directors,  or its
designee, may, from time to time, designate, and shall be drawn out only for the

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purposes of the  Corporation,  and only upon  checks or drafts  signed as herein
authorized.  All checks,  drafts or orders for payment except "transfer  checks"
and "payroll checks" as hereinafter  provided drawn upon the "General  Account,"
the "Deposit Refund Account," and the "Mid-South  Towers-SWEPCO  Account" in any
depository  shall be signed on behalf of the  Company by the  President,  a Vice
President,  the General Manager, the Treasurer or an Assistant Treasurer,  or by
any such officers or employees of the  Corporation  as may be designated for the
purpose  from time to time by  resolution  of the Board of  Directors  or of the
Executive  Committee;  provided,  however,  that all such checks in amounts over
$50,000  shall be signed  manually by such  officer,  and provided that all such
checks or orders  drawn in an  amount  of  $50,000  or less may be signed by the
mechanical  or  facsimile   signature  of  said  officer.   "Transfer   checks,"
transferring  funds of the Company from its General Account in any depository to
its  General  Account  in any other  depository,  may be signed on behalf of the
Company by the  mechanical  or facsimile  signature of said  officers as defined
above.  "Payroll  checks"  drawn upon the  Payroll  Account or  Accounts  of the
Company may be signed on behalf of the Company by the  mechanical  or  facsimile
signature  of said  officer  as defined  above.  All  deposits  and funds of the
Company in any depository shall be made, in the first instance,  directly to the
credit of the Company in its  General  Account in such  depository,  and no such
deposit  shall be made,  in the first  instance,  directly  to the credit of the
Company  in any  Special  Account,  fund or  deposit  (herein  called a "Special
Account") of the Company in any depository,  whether now or hereafter authorized
or maintained.

            Section  2.  Promissory  notes  issued by the  Corporation  shall be
signed by the Chairman of the Company or the  President or a Vice  President and
by the  Treasurer or an  Assistant  Treasurer  of the  Corporation,  or shall be
signed in such other manner as the Board of Directors or the Executive Committee
shall by  resolution  provide.  When the  Board of  Directors  or the  Executive
Committee  shall by  resolution  so  provide,  the  signature  of an  officer or
employee  designated  or authorized to sign or  countersign  bonds,  debentures,
notes, drafts or checks issued by the Corporation may be facsimile.

            Section 3. No debt shall be contracted, except for current expenses,
unless authorized by the Board of Directors or the Executive  Committee,  and no
bills  shall  be  paid by the  Treasurer  unless  audited  and  approved  by the
Controller,  or by some person or committee expressly authorized by the Board of
Directors or the Executive Committee to audit and approve bills for payment.

            Section 4. The  dividends  upon the  preferred  stock,  if declared,
shall be payable quarterly on the first day of January,  April, July and October
in each year,  unless  different  quarterly  payment  dates  shall be fixed,  in
respect  of any  series  of the  preferred  stock  of  the  Corporation,  by the
Certificate of Incorporation,  as amended,  or by the resolution of the Board of
Directors  creating such series.  All  dividends  declared upon the common stock
shall be payable at such time as may be fixed by the Board of Directors.  Before
payment of any dividend or making any  distribution  of profits,  there shall be
set aside,  out of the  surplus or net profits of the  Corporation,  such sum or
sums as the Board of Directors from time to time, in their absolute  discretion,
think  proper  as a  reserve  fund  to  meet  contingencies,  or for  equalizing

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dividends,  or for repairing or maintaining any property of the Corporation,  or
for such  purpose as the Board  shall  think  conducive  to the  interest of the
Corporation.

            Section 5. The fiscal year of the Corporation  shall be the calendar
year.


                                 ARTICLE XIII

                                   Amendment

            Section 1. Subject  always to Bylaws made by the  stockholders,  the
Board of Directors  may make Bylaws from time to time,  and may alter,  amend or
repeal  such  Bylaws at any  regular  or special  meeting of the Board,  but any
Bylaws made by the Board of Directors may be altered, amended or repealed by the
stockholders,  at any annual meeting, or at any special meeting, provided notice
of such proposed alteration, amendment or repeal shall have been included in the
notice of such special meeting.