<PAGE>
                                  EXHIBIT 3(e)

                           APPALACHIAN POWER COMPANY

                                    BY-LAWS

      Section 1. The annual meeting of the  shareholders  of the corporation for
the  election  of  directors  and for the  transaction  of such other  corporate
business as may  properly  come before  said  meeting  shall be held at the main
office of the corporation,  in the City of Roanoke,  Virginia,  or at such other
place  within or without the  Commonwealth  of Virginia as shall be specified in
the notice, or waiver of notice, of such meeting, on the fourth Tuesday of April
in each  year,  or on such other day as shall be  specified  in the  notice,  or
waiver of notice, of such meeting. (As amended 1/26/67)

      Section 2. Special  meetings of the shareholders of the corporation may be
held upon the call of the  Chairman of the Board or of the Board of Directors or
Executive   Committee,   or  of  shareholders  holding  one-tenth  of  the  then
outstanding  capital  stock  entitled  to vote,  at such time and at such  place
within or without the  Commonwealth of Virginia as may be stated in the call and
notice of any such special meeting. (As amended 1/31/80)

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

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

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

      Section 5. Meetings of shareholders shall be presided over by the Chairman
of the Board, or, in his absence, by the President,  or, in the absence of both,
by a Vice President,  or, if none of such officers is present,  by a Chairman to
be  elected  at the  meeting.  The  Secretary  of the  corporation  shall act as
Secretary of such meeting if present.  In his absence the Chairman may appoint a
Secretary. (As amended 1/31/80)

      Section  6.  The  stock  of  the  corporation  shall  be  transferable  or
assignable  on the  books of the  corporation  by the  holders  in  person or by
attorney  on  the  surrender  of  the   certificate   therefor  duly   endorsed.
Certificates  of stock shall be in such form and  executed in such manner as may
be  prescribed  by law and the Board of  Directors.  The Board of Directors  may
appoint one or more transfer agents and registrars for the stock.

      The Board of Directors are hereby  authorized to fix in advance a date not
less than ten nor more than  fifty  days  preceding  the date of any  meeting of
shareholders,  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 for the  determination  of the
shareholders  entitled to notice of and to vote at any such meeting, or entitled
to receive payment of any such dividend,  or any such allotment of rights, or to
exercise  the rights in respect to any such  change,  conversion  or exchange of
capital stock, and in such case only shareholders of record on the date so fixed
shall be entitled to such notice of and to vote at such  meeting,  or to receive
payment of such dividend,  or allotment of rights,  or exercise such rights,  as
the case may be, and  notwithstanding  any transfer of any stock on the books of
the corporation after such record date fixed as aforesaid. (As amended 2/25/71)

      Section  7. The  directors  shall be  elected  at the  annual  meeting  of
shareholders  or as soon thereafter as practicable and shall hold office for one
year or until  their  successors  are  elected  and  qualify.  It  shall  not be
necessary to be a shareholder in order to be a director.  The  shareholders  may
remove any director at any time without cause assigned and fill the vacancy at a
meeting  called for the purpose of considering  such action.  Any vacancy in the
Board of Directors  not caused by such removal may be filled by the Board at any
meeting. (As amended 1/29/81 )

      Section 8.  Meetings of the Board of  Directors  shall be held at the time
fixed by resolution of the Board or upon call of the Chairman of the Board,  the
President or a Vice President and may be held at any place within or without the
State of Virginia.  The  Secretary or officer  performing  his duties shall give
reasonable notice (which need not exceed two days) of all meetings of directors,
provided that a meeting may be held without notice  immediately after the annual
election,  and notice need not be given of regular  meetings held at times fixed
by resolution of the Board.  Meetings may be held at any time without  notice if
all the directors are present or if those not present waive notice either before
or after the  meeting.  Notice by mail or  telegraph  to the usual  business  or
residence  address of the director shall be sufficient.  A majority of the Board
of Directors in office shall constitute a quorum.  Less than such a quorum shall
have power to adjourn any meeting from time to time without notice.

      Section 9. The Board of Directors  as soon as may be after their  election
in each year may appoint an  Executive  Committee  to consist of the Chairman of
the  Board  and such  number  of  directors  as the  Board may from time to time
determine.  Such  Committee  shall have and may  exercise  during the  intervals
between  meetings  of the Board all the  powers  vested in the Board  except the
power to fill  vacancies in the Board,  the power to change the membership of or
fill vacancies in said Committee and the power to change the by-laws.  The Board
shall have the power at any time to change the  membership of such Committee and
to fill vacancies in it. The Executive  Committee may make rules for the conduct
of its business and may appoint such  committees  and  assistants as it may deem
necessary.  A majority  of the  members of said  Committee  shall  constitute  a
quorum.  The  Chairman  of the  Board  shall be the  Chairman  of the  Executive
Committee.  During the intervals between the meetings of the Executive Committee
the Chairman of said Committee shall possess and may exercise such of the powers
vested in the Executive Committee as from time to time may be conferred upon him
by resolution of the Board of Directors or the Executive Committee.  (As amended
1/31/80)

      Section 10. The Board of Directors, as soon as may be convenient after the
election  of  directors  in each year,  shall  elect from among  their  number a
Chairman  of the  Board  and  shall  also  elect a  President,  one or more Vice
Presidents, a Secretary and a Treasurer and shall, from time to time, elect such
other  officers as they may deem proper.  The same person may be elected to more
than one office. (As amended 12/19/90)

      Section  11.  The term of office of all  officers  shall be until the next
election of  directors  and until  their  respective  successors  are chosen and
qualify,  but any officer may be removed from office at any time by the Board of
Directors. Vacancies in the offices shall be filled by the Board of Directors.

      Section  12. The  officers  of the  corporation  shall have such duties as
usually  pertain to their offices  except as modified by the Board of Directors,
and shall also have such powers and duties as may from time to time be conferred
upon them by the Board of Directors.


      Section  13.  The  Board  of  Directors  are  authorized  to  select  such
depositaries  as they shall deem  proper for the funds of the  corporation.  All
checks and drafts  against such  deposited  funds shall be signed by officers or
persons to be specified by the Board of Directors.

      Section 14. The corporate seal of the corporation shall be in such form as
the Board of Directors shall prescribe.

      Section 15. A director of this  corporation  shall not be  disqualified by
his office from dealing or contracting with the corporation  either as a vendor,
purchaser  or  otherwise,   nor  shall  any  transaction  or  contract  of  this
corporation  be void or voidable by reason of the fact that any  director or any
firm of which any director is a member or any  corporation of which any director
is a shareholder or director,  is in any way  interested in such  transaction on
contract,  provided that such transaction or contract is or shall be authorized,
ratified or approved either (1) by a vote of a majority of a quorum of the Board
of Directors or of the Executive  Committee without counting in such majority or
quorum  any  director  so  interested  or  member of a firm so  interested  or a
shareholder or director of a corporation  so  interested,  or (2) by vote at any
shareholders'  meeting  of the  holders  of  record  of a  majority  of all  the
outstanding shares for stock of this corporation  entitled to vote or by writing
or writings  signed by a majority  of such  holders;  nor shall any  director be
liable to account to this  corporation  for any profits  realized by him from or
through  any such  transaction,  or  contract  of this  corporation  authorized,
ratified or approved as  aforesaid  by reason of the fact that he or any firm of
which  he is a  member  or any  corporation  of  which  he is a  shareholder  or
director,  was  interested  in such  transaction  or  contract.  Nothing  herein
contained  shall create any  liability in the events above  described or prevent
the  authorization,  ratification  or  approval of such  contracts  in any other
manner  provided by law; nor shall  anything  herein be considered as in any way
affecting the rights of the corporation or of any person interested,  on account
of any fraud in connection with any such transaction.

      Section 16.  (1) Definitions.  In this Section 16:

            (a)   "expenses" includes, without limitation, counsel fees;

            (b)   "employee" shall include,  without  limitation,  any employee,
                  including  any   professionally   licensed   employee  of  the
                  corporation. Such term shall also include, without limitation,
                  any employee,  including any professionally  licensed employee
                  of a subsidiary or affiliate of the  corporation who is acting
                  on behalf of the corporation;

            (c)   "liability"   means  the   obligation   to  pay  a   judgment,
                  settlement,  penalty,  fine, including any excise tax assessed
                  with  respect to any  employee  benefit  plan,  or  reasonable
                  expenses incurred with respect to a proceeding;

            (d)   "official  capacity" means, (i) when used with respect
                  to  a   director,   the  office  of  director  in  the
                  corporation;  or (ii)  when used  with  respect  to an
                  individual  other than a  director,  the office in the
                  corporation  held by the officer or the  employment or
                  agency  relationship  undertaken  by the  employee  or
                  agent  on   behalf  of  the   corporation.   "Official
                  capacity"  does  not  include  service  for any  other
                  foreign or domestic  corporation  or any  partnership,
                  joint venture,  trust, employee benefit plan, or other
                  enterprise  whether at the request of the  corporation
                  or otherwise;

            (e)   "party"  includes an individual  who was, is, or is threatened
                  to be made a named defendant or respondent in a proceeding;

            (f)   "proceeding"  means  any  threatened,  pending,  or  completed
                  action,   suit,  or  proceeding,   whether  civil,   criminal,
                  administrative   or   investigative   and  whether  formal  or
                  informal, including all appeals.

      (2) Indemnification. The corporation shall indemnify any person who was or
is a party to any  proceeding by reason of the fact that such person is or was a
director, officer or employee of the corporation, or any subsidiary or affiliate
of the  corporation or is or was serving at the request of the  corporation as a
director,  trustee, partner,  officer,  employee, or agent of another foreign or
domestic corporation,  partnership,  joint venture, trust, employee benefit plan
or other enterprise, against any liability incurred by such person in connection
with such proceeding if (a) such person  conducted him or herself in good faith;
and (b) such  person  believed,  in the case of conduct  in his or her  official
capacity,  that his or her conduct was in the best interests of the corporation,
and in all other  cases that his or her  conduct was at least not opposed to its
best interests; and (c) in the case of any criminal proceeding,  such person had
no  reasonable  cause to believe his or her conduct was  unlawful;  and (d) such
person   was  not   grossly   negligent   or  guilty  of   willful   misconduct.
Indemnification  required under this Section 16 in connection  with a proceeding
by or in the right of the corporation is limited to reasonable expenses incurred
in  connection  with the  proceeding.  A person is  considered  to be serving an
employee  benefit plan at the  corporation's  request if such person's duties to
the corporation  also impose duties on, or otherwise  involve  services by, such
person  to the  plan or to  participants  in or  beneficiaries  of the  plan.  A
person's  conduct  with  respect to an employee  benefit plan for a purpose such
person believed to be in the interests of the participants and  beneficiaries of
the plan is conduct  that  satisfies  the  requirements  of this Section 16. The
termination of any proceeding by judgment,  order,  settlement,  conviction,  or
upon a plea of nolo contendere or its  equivalent,  shall not of itself create a
presumption  that the standard of conduct  described in this  subsection (2) has
not been met.

      (3) Limitations upon  indemnification.  Notwithstanding  the provisions of
subsection  (2) of  this  Section  16,  no  indemnification  shall  be  made  in
connection  with:  (a) any  proceeding by or in the right of the  corporation in
which the person seeking indemnification was adjudged liable to the corporation;
or (b) any  proceeding  charging  any  person  with  improper  benefit to him or
herself,  whether or not involving action in such person's official capacity, in
which such person was  adjudged  liable on the basis that  personal  benefit was
improperly received by such person.

      (4)  Determination and  Authorization of  Indemnification.  In any case in
which  a   director,   officer  or   employee   of  the   corporation   requests
indemnification,  upon such person's request,  the Board of Directors shall meet
within sixty (60) days thereof to determine  whether such person is eligible for
indemnification in accordance with the applicable standards of conduct set forth
in subsections (2) and (3) of this Section 16. Such determination  shall be made
as follows:

            (a)   By the  Board  of  Directors  by a  majority  vote of a quorum
                  consisting  of  directors  not  at  the  time  parties  to the
                  proceeding;

            (b)   If a quorum  cannot be obtained  under  paragraph  (a) of this
                  subsection   (4),  by  majority  vote  of  a  committee   duly
                  designated  by the Board of  Directors  (in which  designation
                  directors who are parties may participate),  consisting of two
                  or more directors not at the time parties to the proceeding;

            (c)   By special legal counsel;

                  (i)   Selected by the Board of Directors  or its  committee in
                        the manner  prescribed in paragraphs  (a) or (b) of this
                        subsection (4); or

                  (ii)  If a quorum of the Board of Directors cannot be obtained
                        under  paragraph  (a)  of  this  subsection  (4)  and  a
                        committee  cannot be designated  under  paragraph (b) of
                        this  subsection  (4),  selected by majority vote of the
                        full Board of Directors,  in which  selection  directors
                        who are parties may participate; or

            (d)   By the  shareholders,  but shares  owned by or voted under the
                  control of  directors,  officers or  employees  who are at the
                  time  parties  to  the  proceeding  may  not be  voted  on the
                  determination; or

            (e)   By  the   Chairman   of  the  Board  if  the  person   seeking
                  indemnification  is neither a  director  nor an officer of the
                  corporation.

Authorization of indemnification and evaluation as to reasonableness of expenses
shall be made in the same manner as the determination  that  indemnification  is
permissible,  except that if the determination is made by special legal counsel,
authorization of indemnification and evaluation as to reasonableness of expenses
shall be made by those  entitled under  paragraph (c) of this  subsection (4) to
elect counsel.

      (5) Advancement of Expenses.  To the fullest extent  permitted by law, the
corporation  shall promptly  advance expenses as they are incurred by any person
who is a party to any proceeding,  whether by or in the right of the corporation
or  otherwise,  by reason of the fact  that  such  person is or was a  director,
officer or employee of the  corporation or of any subsidiary or affiliate of the
corporation,  or is or was  serving  at the  request  of  the  corporation  as a
director,  trustee,  partner,  officer,  or  employee  of  another  corporation,
partnership,  joint venture,  trust,  employee benefit plan or other enterprise,
upon  request of such  person and receipt of an  undertaking  by or on behalf of
such director,  officer or employee to repay amounts advanced to the extent that
it  is   ultimately   determined   that  such  person  was  not   eligible   for
indemnification  in accordance  with the standards set forth in subsections  (2)
and (3) of this Section 16.

      (6)  Contract  Rights:  Non-exclusivity  of  Indemnification:  Contractual
Indemnification.  The foregoing provisions of this Section 16 shall be deemed to
be a contract between the corporation and each director,  officer or employee of
the corporation,  or its  subsidiaries,  or affiliates,  and any modification or
repeal of this Section 16 or such  provisions of the Code of Virginia  shall not
diminish any rights or obligations existing prior to such modification or repeal
with respect to any  proceeding  theretofore  or thereafter  brought;  provided,
however, that the right of indemnification provided in this Section 16 shall not
be deemed  exclusive  of any other  rights to which  any  director,  officer  or
employee of the corporation  may now be or hereafter  become entitled apart from
this  Section 16,  under any  applicable  law  including  the Code of  Virginia.
Irrespective  of the  provisions of this Section 16, the Board of Directors may,
at any time from time to time, approve  indemnification of directors,  officers,
employees or agents to the full extent  permitted by the Code of Virginia at the
time in effect,  whether on account of past or future  actions or  transactions.
Notwithstanding the foregoing,  the corporation shall enter into such additional
contracts  providing  for  indemnification  and  advancement  of  expenses  with
directors,  officers or  employees of the  corporation  or its  subsidiaries  or
affiliates as the Board of Directors shall authorize, provided that the terms of
any  such  contract  shall be  consistent  with  the  provisions  of the Code of
Virginia.

      (7) Miscellaneous Provisions. The indemnification provided by this Section
16 shall be limited with respect to directors,  officers and controlling persons
to the extent provided in any undertaking entered into by the corporation or its
subsidiaries  or  affiliates,   as  required  by  the  Securities  and  Exchange
Commission  pursuant to any rule or  regulation of the  Securities  and Exchange
Commission now or hereafter in effect.

            The corporation may purchase and maintain insurance on behalf of any
person  described in this Section 16 against any liability which may be asserted
against  such  person  whether  or not the  corporation  would have the power to
indemnify  such person  against  such  liability  under the  provisions  of this
Section 16.

            Every  reference  in  this  Section  16 to  directors,  officers  or
employees  shall  include  former  directors,  officers and  employees and their
respective heirs, executors and administrators.

            If any  provision of this Section 16 shall be found to be invalid or
limited in application by reason of any law, regulation or proceeding,  it shall
not affect any other  provision  of the  validity  of the  remaining  provisions
hereof.

            The  provisions  of this Section 16 shall be  applicable  to claims,
actions,  suits or  proceedings  made,  commenced or pending  after the adoption
hereof,  whether arising from acts or omissions to act occurring before or after
the adoption hereof. (As amended 4/21/87)

      Section  17.  These  by-laws may at any time be amended or added to or any
part thereof repealed by affirmative vote of a majority of a quorum of the Board
of Directors  given at a duly convened  meeting of the Board of  Directors,  the
notice of which includes notice of the proposed amendment, addition or repeal.

      Section  18. The Board of  Directors  shall be six in number.  The
directors need not be  shareholders.  A majority of the directors  shall
constitute  a  quorum  for the  transaction  of  business.  (As  amended
6/1/98)