Ex 4(d) - Company Order and Officers' Certificate, 04/10/06, Series M and N


    
      

    

     

           EXHIBIT
      4(d)


    April
      10,
      2006

    


    Company
      Order and Officers' Certificate

    5.55%
      Senior Notes, Series M, due 2011

    6.375%
      Senior Notes, Series N, due 2036

     

    The
      Bank
      of New York, as Trustee

    101
      Barclay Street - 8W

    New
      York,
      New York 10286

    


    Ladies
      and Gentlemen:

    


    Pursuant
      to Article Two of the Indenture, dated as of January 1, 1998 (as it may be
      amended or supplemented, the "Indenture"), from Appalachian Power Company (the
      "Company") to The Bank of New York, as trustee (the "Trustee"), and the Board
      Resolutions dated December 14, 2005, a copy of which certified by the Secretary
      or an Assistant Secretary of the Company is being delivered herewith under
      Section 2.01 of the Indenture, and unless otherwise provided in a subsequent
      Company Order pursuant to Section 2.04 of the Indenture,

    


    
      	
              1.

            	
              the
                Company's 5.55% Senior Notes, Series M, due 2011 (the "Series M Notes")
                and 6.375% Senior Notes, Series N, due 2036 (the "Series N Notes")
                are
                hereby established. The Series M Notes and the Series N Notes are
                collectively referred to herein as the "Notes". The Notes shall be
                in
                substantially the forms attached hereto as Exhibits 1 and
                2.

            
	 	 	 
	
              2.

            	
              the
                terms and characteristics of the Notes shall be as follows (the numbered
                clauses set forth below corresponding to the numbered subsections
                of
                Section 2.01 of the Indenture, with terms used and not defined herein
                having the meanings specified in the Indenture):

            
	 	 	 
	 	
              (i)

            	
              the
                aggregate principal amount of Notes which may be authenticated and
                delivered under the Indenture initially shall be limited to $250,000,000
                for the Series M Notes and $250,000,000 for the Series N Notes, except
                as
                contemplated in Section 2.01(i) of the Indenture and
                except that such principal amount may be increased from time to time;
                all
                Series M Notes and all Series N Notes need not be issued at the same
                time
                and each such series may be reopened at any time, without the consent
                of
                any securityholder, for issuance of additional Notes, which Notes
                will
                have the same interest rate, maturity and other terms as those initially
                issued;

            
	 	 	 
	 	
              (ii)

            	
              the
                date on which the principal of the Series M Notes shall be payable
                shall
                be April 1, 2011 and the date on which the principal of the Series
                N Notes
                shall be payable shall be April 1, 2036;

            
	 	 	 
	 	
              (iii)

            	
              interest
                shall accrue from the date of authentication of the Notes; the Interest
                Payment Dates on which such interest will be payable shall be April
                1
                and October 1, and the Regular Record Date for the determination
                of
                holders to whom interest is payable on any such Interest Payment
                Date
                shall be the March 15 or September 15 preceding the relevant Interest
                Payment Date; provided that the first Interest Payment Date shall
                be
                October 1, 2006 and interest payable on the Stated Maturity Date
                or any
                Redemption Date shall be paid to the Person to whom principal shall
                be
                paid;

            
	 	 	 
	 	
              (iv)

            	
              the
                interest rate at which the Series M Notes shall bear interest shall
                be
                5.55% per annum and the interest rate at which the Series N Notes
                shall
                bear interest shall be 6.375% per annum;

            
	 	 	 
	 	
              (v)

            	
              the
                Notes shall be redeemable at the option of the Company, in whole
                at any
                time or in part from time to time, upon not less than thirty but
                not more
                than sixty days' previous notice given by mail to the registered
                owners of
                the Notes at a redemption price equal to the greater of (i) 100%
                of the
                principal amount of the Notes being redeemed and (ii) the sum of
                the
                present values of the remaining scheduled payments of principal and
                interest on the Notes being redeemed (excluding the portion of any
                such
                interest accrued to the date of redemption) discounted (for purposes
                of
                determining present value) to the redemption date on a semi-annual
                basis
                (assuming a 360-day year consisting of twelve 30-day months) at the
                Treasury Rate (as defined below) plus 15 basis points for the Series
                M
                Notes and 30 basis points for the Series N Notes, plus, in each case,
                accrued interest thereon to the date of redemption.

               

              "Treasury
                Rate" means, with respect to any redemption date, the rate per annum
                equal
                to the semi-annual equivalent yield to maturity of the Comparable
                Treasury
                Issue, assuming a price for the Comparable Treasury Issue (expressed
                as a
                percentage of its principal amount) equal to the Comparable Treasury
                Price
                for such redemption date.

               

              "Comparable
                Treasury Issue" means the United States Treasury security selected
                by an
                Independent Investment Banker as having a maturity comparable to
                the
                remaining term of the Notes that would be utilized, at the time of
                selection and in accordance with customary financial practice, in
                pricing
                new issues of corporate debt securities of comparable maturity to
                the
                remaining term of the Notes.

               

              "Comparable
                Treasury Price" means, with respect to any redemption date, (1) the
                average of the Reference Treasury Dealer Quotations for such redemption
                date, after excluding the highest and lowest such Reference Treasury
                Dealer Quotations, or (2) if fewer than four such Reference Treasury
                Dealer Quotations are obtained, the average of all such quotations.
                

               

              "Independent
                Investment Banker" means one of the Reference Treasury Dealers appointed
                by the Company and reasonably acceptable to the Trustee.

               

              "Reference
                Treasury Dealer" means a primary U.S. government securities dealer
                in New
                York City selected by the Company and reasonably acceptable to the
                Trustee.

               

              "Reference
                Treasury Dealer Quotation" means, with respect to the Reference Treasury
                Dealer and any redemption date, the average, as determined by the
                Trustee,
                of the bid and asked prices for the Comparable Treasury Issue (expressed
                in each case as a percentage of its principal amount) quoted in writing
                to
                the Trustee by such Reference Treasury Dealer at or before 5:00 p.m.,
                New
                York City time, on the third Business Day preceding such redemption
                date.

            
	 	 	 
	 	
              (vi)

            	
              (a)
                the Notes shall be issued in the form of Global Notes; (b) the Depositary
                for such Global Notes shall be The Depository Trust Company; and
                (c) the
                procedures with respect to transfer and exchange of Global Notes
                shall be
                as set forth in the forms of Note attached hereto;

            
	 	 	 
	 	
              (vii)

            	
              the
                title of the Series M Notes shall be "5.55% Senior Notes, Series
                M, due
                2011" and the title of the Series N Notes shall be "6.375% Senior
                Notes,
                Series N, due 2036";

            
	 	 	 
	 	
              (viii)

            	
              the
                forms of the Notes shall be as set forth in Paragraph 1,
                above;

            
	 	 	 
	 	
              (ix)

            	
              not
                applicable;

            
	 	 	 
	 	
              (x)

            	
              the
                Notes shall not be subject to a Periodic Offering;

            
	 	 	 
	 	
              (xi)

            	
              not
                applicable;

            
	 	 	 
	 	
              (xii)

            	
              not
                applicable;

            
	 	 	 
	 	
              (xiii)

            	
              not
                applicable;

            
	 	 	 
	 	
              (xiv)

            	
              the
                Notes shall be issuable in denominations of $1,000 and any integral
                multiple thereof;

            
	 	 	 
	 	
              (xv)

            	
              not
                applicable;

            
	 	 	 
	 	
              (xvi)

            	
              the
                Notes shall not be issued as Discount Securities;

            
	 	 	 
	 	
              (xvii)

            	
              not
                applicable;

            
	 	 	 
	 	
              (xviii)

            	
              not
                applicable, and

            
	 	 	 
	 	
              (xix)

            	
              So
                long as any of the Notes are outstanding, the Company will not create
                or
                suffer to be created or to exist any additional mortgage, pledge,
                security
                interest, or other lien (collectively "Liens") on any of its utility
                properties or tangible assets now owned or hereafter acquired to
                secure
                any indebtedness for borrowed money ("Secured Debt"), without providing
                that the Notes will be similarly secured. This restriction does not
                apply
                to the Company's subsidiaries, nor will it prevent any of them from
                creating or permitting to exist Liens on their property or assets
                to
                secure any Secured Debt. Further, this restriction on Secured Debt
                does
                not apply to the Company's existing first mortgage bonds that have
                previously been issued under its mortgage indenture or any indenture
                supplemental thereto; provided that this restriction will apply to
                future
                issuances thereunder (other than issuances of refunding first mortgage
                bonds). In addition, this restriction does not prevent the creation
                or
                existence of:

            
	 	 	 
	 	 	
              (a)

            	
              Liens
                on property existing at the time of acquisition or construction of
                such
                property (or created within one year after completion of such acquisition
                or construction), whether by purchase, merger, construction or otherwise,
                or to secure the payment of all or any part of the purchase price
                or
                construction cost thereof, including the extension of any Liens to
                repairs, renewals, replacements, substitutions, betterments, additions,
                extensions and improvements then or thereafter made on the property
                subject thereto;

            
	 	 	 	 
	 	 	
              (b)

            	
              Financing
                of the Company's accounts receivable for electric
                service;

            
	 	 	 	 
	 	 	
              (c)

            	
              Any
                extensions, renewals or replacements (or successive extensions, renewals
                or replacements), in whole or in part, of liens permitted by the
                foregoing
                clauses; and

            
	 	 	 	 
	 	 	
              (d)

            	
              The
                pledge of any bonds or other securities at any time issued under
                any of
                the Secured Debt permitted by the above clauses.

            
	 	 	 	 
	 	
              In
                addition to the permitted issuances above, Secured Debt not otherwise
                so
                permitted may be issued in an amount that does not exceed 15% of
                Net
                Tangible Assets as defined below. 

               

              "Net
                Tangible Assets" means the total of all assets (including revaluations
                thereof as a result of commercial appraisals, price level restatement
                or
                otherwise) appearing on the Company's balance sheet, net of applicable
                reserves and deductions, but excluding goodwill, trade names, trademarks,
                patents, unamortized debt discount and all other like intangible
                assets
                (which term shall not be construed to include such revaluations),
                less the
                aggregate of the Company's current liabilities appearing on such
                balance
                sheet. For purposes of this definition, the Company's balance sheet
                does
                not include assets and liabilities of its subsidiaries.

               

              This
                restriction also does not apply to or prevent the creation or existence
                of
                leases made, or existing on property acquired, in the ordinary course
                of
                business.

            
	 	 
	
              3.

            	
              You
                are hereby requested to authenticate $250,000,000 aggregate principal
                amount of 5.55% Senior Notes, Series M, due 2011 and $250,000,000
                aggregate principal amount of 6.375% Senior Notes, Series N, due
                2036,
                executed by the Company and delivered to you concurrently with this
                Company Order and Officers' Certificate, in the manner provided by
                the
                Indenture.

            
	 	 
	
              4.

            	
              You
                are hereby requested to hold the Notes as custodian for DTC in accordance
                with the Blanket Issuer Letter of Representations dated June 24,
                2004,
                from the Company to DTC.

            
	 	 
	
              5.

            	
              Concurrently
                with this Company Order and Officers' Certificate, an Opinion of
                Counsel
                under Sections 2.04 and 13.06 of the Indenture is being delivered
                to
                you.

            
	 	 
	
              6.

            	
              The
                undersigned Stephan T. Haynes and Jeffrey D. Cross, the Assistant
                Treasurer and Assistant Secretary, respectively, of the Company do
                hereby
                certify that:

            
	 	 
	 	
              (i)

            	
              we
                have read the relevant portions of the Indenture, including without
                limitation the conditions precedent provided for therein relating
                to the
                action proposed to be taken by the Trustee as requested in this Company
                Order and Officers' Certificate, and the definitions in the Indenture
                relating thereto;

            
	 	 	 
	 	
              (ii)

            	
              we
                have read the Board Resolutions of the Company and the Opinion of
                Counsel
                referred to above;

            
	 	 	 
	 	
              (iii)

            	
              we
                have conferred with other officers of the Company, have examined
                such
                records of the Company and have made such other investigation as
                we deemed
                relevant for purposes of this certificate;

            
	 	 	 
	 	
              (iv)

            	
              in
                our opinion, we have made such examination or investigation as is
                necessary to enable us to express an informed opinion as to whether
                or not
                such conditions have been complied with; and

            
	 	 	 
	 	
              (v)

            	
              on
                the basis of the foregoing, we are of the opinion that all conditions
                precedent provided for in the Indenture relating to the action proposed
                to
                be taken by the Trustee as requested herein have been complied
                with.

            


    

     

    Kindly
      acknowledge receipt of this Company Order and Officers' Certificate, including
      the documents listed herein, and confirm the arrangements set forth herein
      by
      signing and returning the copy of this document attached hereto.

    


    IN
      WITNESS WHEREOF, the Company has caused this Instrument to be
      executed.

    


    
      	
              Very
                truly yours,

            
	 
	
              APPALACHIAN
                POWER COMPANY

            
	 
	
              By:     /s/
                Stephan T. Haynes

            
	
              Assistant
                Treasurer

            
	 
	
              And:  /s/
                Jeffrey D. Cross    

            
	
              Assistant
                Secretary

            
	 
	
              Acknowledged
                by Trustee:

            
	 
	
              By:   
                /s/ Mary LaGumina     

            
	
              Authorized
                Signatory

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      1

    

      Unless
        this certificate is presented by an authorized representative of The Depository
        Trust Company (55 Water Street, New York, New York) to the issuer or its
        agent
        for registration of transfer, exchange or payment, and any certificate to
        be
        issued is registered in the name of Cede & Co. or in such other name as is
        requested by an authorized representative of The Depository Trust Company
        and
        any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
        FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
        registered owner hereof, Cede & Co., has an interest herein. Except as
        otherwise provided in Section 2.11 of the Indenture, this Security may be
        transferred, in whole but not in part, only to another nominee of the Depository
        or to a successor Depository or to a nominee of such successor
        Depository.

      


      No.
        R1

      APPALACHIAN
        POWER COMPANY

      5.55%
        Senior Notes, Series M, due 2011

      


      
        	
                CUSIP:      
                    037735
                  CF 2

              	
                Original
                  Issue Date: April
                  10, 2006

              
	 	 
	
                Stated
                  Maturity:    April
                  1, 2011

              	
                Interest
                  Rate :  5.55%

              
	 	 
	
                Principal
                  Amount: $250,000,000

              	 
	 	 
	
                Redeemable:

              	
                Yes

              	
                X

              	
                No

              	 
	
                In
                  Whole:

              	
                Yes

              	
                X

              	
                No

              	 
	
                In
                  Part:

              	
                Yes

              	
                X

              	
                No

              	 


      

      


      APPALACHIAN
        POWER COMPANY, a corporation duly organized and existing under the laws of
        the
        Commonwealth of Virginia (herein referred to as the “Company”, which term
        includes any successor corporation under the Indenture hereinafter referred
        to),
        for value received, hereby promises to pay to CEDE & CO. or registered
        assigns, the Principal Amount specified above on the Stated Maturity specified
        above, and to pay interest on said Principal Amount from the Original Issue
        Date
        specified above or from the most recent interest payment date (each such
        date,
        an “Interest Payment Date”) to which interest has been paid or duly provided
        for, semi-annually in arrears on April 1 and October 1 in each year, commencing
        on October 1, 2006, at the Interest Rate per annum specified above, until
        the
        Principal Amount shall have been paid or duly provided for. Interest shall
        be
        computed on the basis of a 360-day year of twelve 30-day months.

      


      The
        interest so payable, and punctually paid or duly provided for, on any Interest
        Payment Date, as provided in the Indenture, as hereinafter defined, shall
        be
        paid to the Person in whose name this Note (or one or more Predecessor
        Securities) shall have been registered at the close of business on the Regular
        Record Date with respect to such Interest Payment Date, which shall be the
        March
        15 or September 15 (whether or not a Business Day) prior to such Interest
        Payment Date, provided that interest payable on the Stated Maturity or any
        redemption date shall be paid to the Person to whom principal is paid. Any
        such
        interest not so punctually paid or duly provided for shall forthwith cease
        to be
        payable to the Holder on such Regular Record Date and shall be paid as provided
        in said Indenture.

      


      If
        any
        Interest Payment Date, any redemption date or Stated Maturity is not a Business
        Day, then payment of the amounts due on this Note on such date will be made
        on
        the next succeeding Business Day, and no interest shall accrue on such amounts
        for the period from and after such Interest Payment Date, redemption date
        or
        Stated Maturity, as the case may be, with the same force and effect as if
        made
        on such date. The principal of (and premium, if any) and the interest on
        this
        Note shall be payable at the office or agency of the Company maintained for
        that
        purpose in the Borough of Manhattan, the City of New York, New York, in any
        coin
        or currency of the United States of America which at the time of payment
        is
        legal tender for payment of public and private debts; provided, however,
        that
        payment of interest (other than interest payable on the Stated Maturity or
        any
        redemption date) may be made at the option of the Company by check mailed
        to the
        registered holder at such address as shall appear in the Security
        Register.

      


      This
        Note
        is one of a duly authorized series of Notes of the Company (herein sometimes
        referred to as the “Notes”), specified in the Indenture, all issued or to be
        issued in one or more series under and pursuant to an Indenture dated as
        of
        January 1, 1998 duly executed and delivered between the Company and The Bank
        of
        New York, a corporation organized and existing under the laws of the State
        of
        New York, as Trustee (herein referred to as the “Trustee”) (such Indenture, as
        originally executed and delivered and as thereafter supplemented and amended
        being hereinafter referred to as the “Indenture”), to which Indenture and all
        indentures supplemental thereto or Company Orders reference is hereby made
        for a
        description of the rights, limitations of rights, obligations, duties and
        immunities thereunder of the Trustee, the Company and the holders of the
        Notes.
        By the terms of the Indenture, the Notes are issuable in series which may
        vary
        as to amount, date of maturity, rate of interest and in other respects as
        in the
        Indenture provided. This Note is one of the series of Notes designated on
        the
        face hereof.

      


      This
        Note
        may be redeemed by the Company at its option, in whole at any time or in
        part
        from time to time, upon not less than thirty but not more than sixty days’
previous notice given by mail to the registered owners of the Note at a
        redemption price equal to the greater of (i) 100% of the principal amount
        of the
        Note being redeemed and (ii) the sum of the present values of the remaining
        scheduled payments of principal and interest on the Note being redeemed
        (excluding the portion of any such interest accrued to the date of redemption)
        discounted (for purposes of determining present value) to the redemption
        date on
        a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
        months)
        at the Treasury Rate (as defined below) plus 15 basis points, plus, in each
        case, accrued interest thereon to the date of redemption.

      


      “Treasury
        Rate” means, with respect to any redemption date, the rate per annum equal to
        the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
        assuming a price for the Comparable Treasury Issue (expressed as a percentage
        of
        its principal amount) equal to the Comparable Treasury Price for such redemption
        date.

      


      “Comparable
        Treasury Issue” means the United States Treasury security selected by an
        Independent Investment Banker as having a maturity comparable to the remaining
        term of the Notes that would be utilized, at the time of selection and in
        accordance with customary financial practice, in pricing new issues of corporate
        debt securities of comparable maturity to the remaining term of the
        Notes.

      


      “Comparable
        Treasury Price” means, with respect to any redemption date, (1) the average of
        the Reference Treasury Dealer Quotations for such redemption date, after
        excluding the highest and lowest such Reference Treasury Dealer Quotations,
        or
        (2) if fewer than four such Reference Treasury Dealer Quotations are obtained,
        the average of all such quotations.

      


      “Independent
        Investment Banker” means one of the Reference Treasury Dealers appointed by the
        Company and reasonably acceptable to the Trustee.

      


      “Reference
        Treasury Dealer” means a primary U. S. government securities dealer in New York
        City selected by the Company and reasonably acceptable to the
        Trustee.

      


      “Reference
        Treasury Dealer Quotation” means, with respect to the Reference Treasury Dealer
        and any redemption date, the average, as determined by the Trustee, of the
        bid
        and asked prices for the Comparable Treasury Issue (expressed in each case
        as a
        percentage of its principal amount) quoted in writing to the Trustee by such
        Reference Treasury Dealer at or before 5:00 p.m., New York City time, on
        the
        third Business Day preceding such redemption date.

      


      The
        Company shall not be required to (i) issue, exchange or register the transfer
        of
        any Notes during a period beginning at the opening of business 15 days before
        the day of the mailing of a notice of redemption of less than all the
        outstanding Notes of the same series and ending at the close of business
        on the
        day of such mailing, nor (ii) register the transfer of or exchange of any
        Notes
        of any series or portions thereof called for redemption. This Global Note
        is
        exchangeable for Notes in definitive registered form only under certain limited
        circumstances set forth in the Indenture.

      


      In
        the
        event of redemption of this Note in part only, a new Note or Notes of this
        series, of like tenor, for the unredeemed portion hereof will be issued in
        the
        name of the Holder hereof upon the surrender of this Note.

      


      In
        case
        an Event of Default, as defined in the Indenture, shall have occurred and
        be
        continuing, the principal of all of the Notes may be declared, and upon such
        declaration shall become, due and payable, in the manner, with the effect
        and
        subject to the conditions provided in the Indenture.

      


      The
        Indenture contains provisions for defeasance at any time of the entire
        indebtedness of this Note upon compliance by the Company with certain conditions
        set forth therein.

      


      As
        described in the Company Order and Officers’ Certificate, so long as this Note
        is outstanding, the Company is subject to a limitation on Liens as described
        therein.

      


      The
        Indenture contains provisions permitting the Company and the Trustee, with
        the
        consent of the Holders of not less than a majority in aggregate principal
        amount
        of the Notes of each series affected at the time outstanding, as defined
        in the
        Indenture, to execute supplemental indentures for the purpose of adding any
        provisions to or changing in any manner or eliminating any of the provisions
        of
        the Indenture or of any supplemental indenture or of modifying in any manner
        the
        rights of the Holders of the Notes; provided, however, that no such supplemental
        indenture shall (i) extend the fixed maturity of any Notes of any series,
        or
        reduce the principal amount thereof, or reduce the rate or extend the time
        of
        payment of interest thereon, or reduce any premium payable upon the redemption
        thereof, or reduce the amount of the principal of a Discount Security that
        would
        be due and payable upon a declaration of acceleration of the maturity thereof
        pursuant to the Indenture, without the consent of the holder of each Note
        then
        outstanding and affected; (ii) reduce the aforesaid percentage of Notes,
        the
        holders of which are required to consent to any such supplemental indenture,
        or
        reduce the percentage of Notes, the holders of which are required to waive
        any
        default and its consequences, without the consent of the holder of each Note
        then outstanding and affected thereby; or (iii) modify any provision of Section
        6.01(c) of the Indenture (except to increase the percentage of principal
        amount
        of securities required to rescind and annul any declaration of amounts due
        and
        payable under the Notes), without the consent of the holder of each Note
        then
        outstanding and affected thereby. The Indenture also contains provisions
        permitting the Holders of a majority in aggregate principal amount of the
        Notes
        of all series at the time outstanding affected thereby, on behalf of the
        Holders
        of the Notes of such series, to waive any past default in the performance
        of any
        of the covenants contained in the Indenture, or established pursuant to the
        Indenture with respect to such series, and its consequences, except a default
        in
        the payment of the principal of or premium, if any, or interest on any of
        the
        Notes of such series. Any such consent or waiver by the registered Holder
        of
        this Note (unless revoked as pro-vided in the Indenture) shall be conclusive
        and
        binding upon such Holder and upon all future Holders and owners of this Note
        and
        of any Note issued in exchange herefor or in place hereof (whether by
        registration of transfer or otherwise), irrespective of whether or not any
        notation of such consent or waiver is made upon this Note.

      


      No
        reference herein to the Indenture and no provision of this Note or of the
        Indenture shall alter or impair the obligation of the Company, which is absolute
        and unconditional, to pay the principal of and premium, if any, and interest
        on
        this Note at the time and place and at the rate and in the money herein
        prescribed.

      


      As
        provided in the Indenture and subject to certain limitations therein set
        forth,
        this Note is transferable by the registered holder hereof on the Note Register
        of the Company, upon surrender of this Note for registration of transfer
        at the
        office or agency of the Company as may be designated by the Company accompanied
        by a written instrument or instruments of transfer in form satisfactory to
        the
        Company or the Trustee duly executed by the registered Holder hereof or his
        or
        her attorney duly authorized in writing, and thereupon one or more new Notes
        of
        authorized denominations and for the same aggregate principal amount and
        series
        will be issued to the designated transferee or transferees. No service charge
        will be made for any such trans-fer, but the Company may require payment
        of a
        sum sufficient to cover any tax or other governmental charge payable in relation
        thereto.

      


      Prior
        to
        due presentment for registration of transfer of this Note, the Company, the
        Trustee, any paying agent and any Note Registrar may deem and treat the
        registered Holder hereof as the absolute owner hereof (whether or not this
        Note
        shall be overdue and notwithstanding any notice of ownership or writing hereon
        made by anyone other than the Note Registrar) for the purpose of receiving
        payment of or on account of the principal hereof and premium, if any, and
        interest due hereon and for all other purposes, and neither the Company nor
        the
        Trustee nor any paying agent nor any Note Registrar shall be affected by
        any
        notice to the contrary.

      


      No
        recourse shall be had for the payment of the principal of or the interest
        on
        this Note, or for any claim based hereon, or otherwise in respect hereof,
        or
        based on or in respect of the Indenture, against any incorporator, stockholder,
        officer or director, past, present or future, as such, of the Company or
        of any
        predecessor or successor corporation, whether by virtue of any constitution,
        statute or rule of law, or by the enforcement of any assessment or penalty
        or
        otherwise, all such liability being, by the acceptance hereof and as part
        of the
        consideration for the issuance hereof, expressly waived and
        released.

      


      The
        Notes
        of this series are issuable only in registered form without coupons in
        denominations of $1,000 and any integral multiple thereof. As provided in
        the
        Indenture and subject to certain limitations, Notes of this series are
        exchangeable for a like aggregate principal amount of Notes of this series
        of a
        different authorized denomination, as requested by the Holder surrendering
        the
        same.

      


      All
        terms
        used in this Note which are defined in the Indenture shall have the meanings
        assigned to them in the Indenture.

      


      This
        Note
        shall not be entitled to any benefit under the Indenture hereinafter referred
        to, be valid or become obligatory for any purpose until the Certificate of
        Authentication hereon shall have been signed by or on behalf of the
        Trustee.

      


      IN
        WITNESS WHEREOF, the Company has caused this Instrument to be
        executed.

      


      
        	 	
                APPALACHIAN
                  POWER COMPANY

              
	 	 	 
	 	
                By:

              	 /s/
                Stephan T. Haynes
	 	 	
                Assistant
                  Treasurer

              
	
                Attest:

              	 	 
	 	 	 
	
                By: 
                  /s/ Thomas G. Berkemeyer

              	 	 
	
                Assistant
                  Secretary

              	 	 


      

      


      
        
          

        

      

       

      CERTIFICATE
        OF AUTHENTICATION

      


      This
        is
        one of the Notes of the series of Notes designated in accordance with, and
        referred to in, the within-mentioned Indenture.

      


      Dated
        April 10, 2006

      


      THE
        BANK
        OF NEW YORK

      


      By:    
        /s/ Mary LaGumina

      Authorized
        Signatory

      
        

      


      FOR
        VALUE
        RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
        unto

      


      (PLEASE
        INSERT SOCIAL SECURITY OR OTHER

      IDENTIFYING
        NUMBER OF ASSIGNEE)

      


      _______________________________________

      


      ________________________________________________________________

      


      ________________________________________________________________

      (PLEASE
        PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF

      ________________________________________________________________

      ASSIGNEE)
        the within Note and all rights thereunder, hereby

      ________________________________________________________________

      irrevocably
        constituting and appointing such person attorney to 

      ________________________________________________________________

      transfer
        such Note on the books of the Issuer, with full

      ________________________________________________________________

      power
        of
        substitution in the premises.

      


       

      Dated:________________________  _________________________

       

      


      NOTICE: The
        signature to this assignment must correspond with the name as written upon
        the
        face of the within Note in every particular, without alteration or enlargement
        or any change whatever and NOTICE: Signature(s) must be guaranteed by a
        financial institution that is a member of the Securities Transfer Agents
        Medallion Program (“STAMP”), the Stock Exchange Medallion Program (“SEMP”) or
        the New York Stock Exchange, Inc. Medallion Signature Program
        (“MSP”).

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    EXHIBIT
      2

    

      Unless
        this certificate is presented by an authorized
        representative of The Depository Trust Company (55 Water Street, New York,
        New
        York) to the issuer or its agent for registration of transfer, exchange or
        payment, and any certificate to be issued is registered in the name of Cede
        & Co. or in such other name as is requested by an authorized representative
        of The Depository Trust Company and any payment is made to Cede & Co., ANY
        TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
        PERSON
        IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
        interest herein. Except as otherwise provided in Section 2.11 of the Indenture,
        this Security may be transferred, in whole but not in part, only to another
        nominee of the Depository or to a successor Depository or to a nominee of
        such
        successor Depository.

      


      No.
        R1

      APPALACHIAN
        POWER COMPANY

      6.375%
        Senior Notes, Series N, due 2036

      


      
        	
                CUSIP:       
                    037735 CG 0

              	
                Original
                  Issue Date: April 10, 2006

              
	 	 
	
                Stated
                  Maturity:     April 1, 2036

              	
                 
                     Interest Rate:  6.375%

              
	 	 
	
                Principal
                  Amount:  $250,000,000

              	 
	 	 
	
                Redeemable:

              	
                Yes

              	
                X

              	
                No

              	 
	
                In
                  Whole:

              	
                Yes

              	
                X

              	
                No

              	 
	
                In
                  Part:

              	
                Yes

              	
                X

              	
                No

              	 


      

      


      


      APPALACHIAN
        POWER
        COMPANY, a corporation duly organized and existing under the laws of the
        Commonwealth of Virginia (herein referred to as the “Company”, which term
        includes any successor corporation under the Indenture hereinafter referred
        to),
        for value received, hereby promises to pay to CEDE & CO. or registered
        assigns, the Principal Amount specified above on the Stated Maturity specified
        above, and to pay interest on said Principal Amount from the Original Issue
        Date
        specified above or from the most recent interest payment date (each such
        date,
        an “Interest Payment Date”) to which interest has been paid or duly provided
        for, semi-annually in arrears on April 1 and October 1 in each year, commencing
        on October 1, 2006, at the Interest Rate per annum specified above, until
        the
        Principal Amount shall have been paid or duly provided for. Interest shall
        be
        computed on the basis of a 360-day year of twelve 30-day months.

      


      The
        interest so
        payable, and punctually paid or duly provided for, on any Interest Payment
        Date,
        as provided in the Indenture, as hereinafter defined, shall be paid to the
        Person in whose name this Note (or one or more Predecessor Securities) shall
        have been registered at the close of business on the Regular Record Date
        with
        respect to such Interest Payment Date, which shall be the March 15 or September
        15 (whether or not a Business Day) prior to such Interest Payment Date, provided
        that interest payable on the Stated Maturity or any redemption date shall
        be
        paid to the Person to whom principal is paid. Any such interest not so
        punctually paid or duly provided for shall forthwith cease to be payable
        to the
        Holder on such Regular Record Date and shall be paid as provided in said
        Indenture.

      


      If
        any Interest
        Payment Date, any redemption date or Stated Maturity is not a Business Day,
        then
        payment of the amounts due on this Note on such date will be made on the
        next
        succeeding Business Day, and no interest shall accrue on such amounts for
        the
        period from and after such Interest Payment Date, redemption date or Stated
        Maturity, as the case may be, with the same force and effect as if made on
        such
        date. The principal of (and premium, if any) and the interest on this Note
        shall
        be payable at the office or agency of the Company maintained for that purpose
        in
        the Borough of Manhattan, the City of New York, New York, in any coin or
        currency of the United States of America which at the time of payment is
        legal
        tender for payment of public and private debts; provided, however, that payment
        of interest (other than interest payable on the Stated Maturity or any
        redemption date) may be made at the option of the Company by check mailed
        to the
        registered holder at such address as shall appear in the Security
        Register.

      


      This
        Note is one of
        a duly authorized series of Notes of the Company (herein sometimes referred
        to
        as the “Notes”), specified in the Indenture, all issued or to be issued in one
        or more series under and pursuant to an Indenture dated as of January 1,
        1998
        duly executed and delivered between the Company and The Bank of New York,
        a
        corporation organized and existing under the laws of the State of New York,
        as
        Trustee (herein referred to as the “Trustee”) (such Indenture, as originally
        executed and delivered and as thereafter supplemented and amended being
        hereinafter referred to as the “Indenture”), to which Indenture and all
        indentures supplemental thereto or Company Orders reference is hereby made
        for a
        description of the rights, limitations of rights, obligations, duties and
        immunities thereunder of the Trustee, the Company and the holders of the
        Notes.
        By the terms of the Indenture, the Notes are issuable in series which may
        vary
        as to amount, date of maturity, rate of interest and in other respects as
        in the
        Indenture provided. This Note is one of the series of Notes designated on
        the
        face hereof.

      


      This
        Note may be
        redeemed by the Company at its option, in whole at any time or in part from
        time
        to time, upon not less than thirty but not more than sixty days’ previous notice
        given by mail to the registered owners of the Note at a redemption price
        equal
        to the greater of (i) 100% of the principal amount of the Note being redeemed
        and (ii) the sum of the present values of the remaining scheduled payments
        of
        principal and interest on the Note being redeemed (excluding the portion
        of any
        such interest accrued to the date of redemption) discounted (for purposes
        of
        determining present value) to the redemption date on a semi-annual basis
        (assuming a 360-day year consisting of twelve 30-day months) at the Treasury
        Rate (as defined below) plus 30 basis points, plus, in each case, accrued
        interest thereon to the date of redemption.

      


      “Treasury
        Rate” means, with respect to any redemption date, the
        rate per annum equal to the semi-annual equivalent yield to maturity of the
        Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
        (expressed as a percentage of its principal amount) equal to the Comparable
        Treasury Price for such redemption date.

      


      “Comparable
        Treasury Issue” means the United States Treasury
        security selected by an Independent Investment Banker as having a maturity
        comparable to the remaining term of the Notes that would be utilized, at
        the
        time of selection and in accordance with customary financial practice, in
        pricing new issues of corporate debt securities of comparable maturity to
        the
        remaining term of the Notes.

      


      


      “Comparable
        Treasury Price” means, with respect to any redemption
        date, (1) the average of the Reference Treasury Dealer Quotations for such
        redemption date, after excluding the highest and lowest such Reference Treasury
        Dealer Quotations, or (2) if fewer than four such Reference Treasury Dealer
        Quotations are obtained, the average of all such quotations.

      


      “Independent
        Investment Banker” means one of the Reference
        Treasury Dealers appointed by the Company and reasonably acceptable to the
        Trustee.

      


      “Reference
        Treasury Dealer” means a primary U. S. government
        securities dealer in New York City selected by the Company and reasonably
        acceptable to the Trustee.

      


      “Reference
        Treasury Dealer Quotation” means, with respect to the
        Reference Treasury Dealer and any redemption date, the average, as determined
        by
        the Trustee, of the bid and asked prices for the Comparable Treasury Issue
        (expressed in each case as a percentage of its principal amount) quoted in
        writing to the Trustee by such Reference Treasury Dealer at or before 5:00
        p.m.,
        New York City time, on the third Business Day preceding such redemption
        date.

      


      The
        Company shall
        not be required to (i) issue, exchange or register the transfer of any Notes
        during a period beginning at the opening of business 15 days before the day
        of
        the mailing of a notice of redemption of less than all the outstanding Notes
        of
        the same series and ending at the close of business on the day of such mailing,
        nor (ii) register the transfer of or exchange of any Notes of any series
        or
        portions thereof called for redemption. This Global Note is exchangeable
        for
        Notes in definitive registered form only under certain limited circumstances
        set
        forth in the Indenture.

      


      In
        the event of
        redemption of this Note in part only, a new Note or Notes of this series,
        of
        like tenor, for the unredeemed portion hereof will be issued in the name
        of the
        Holder hereof upon the surrender of this Note.

      


      In
        case an Event of
        Default, as defined in the Indenture, shall have occurred and be continuing,
        the
        principal of all of the Notes may be declared, and upon such declaration
        shall
        become, due and payable, in the manner, with the effect and subject to the
        conditions provided in the Indenture.

      


      The
        Indenture
        contains provisions for defeasance at any time of the entire indebtedness
        of
        this Note upon compliance by the Company with certain conditions set forth
        therein.

      


      As
        described in the
        Company Order and Officers’ Certificate, so long as this Note is outstanding,
        the Company is subject to a limitation on Liens as described therein.

      


      The
        Indenture
        contains provisions permitting the Company and the Trustee, with the consent
        of
        the Holders of not less than a majority in aggregate principal amount of
        the
        Notes of each series affected at the time outstanding, as defined in the
        Indenture, to execute supplemental indentures for the purpose of adding any
        provisions to or changing in any manner or eliminating any of the provisions
        of
        the Indenture or of any supplemental indenture or of modifying in any manner
        the
        rights of the Holders of the Notes; provided, however, that no such supplemental
        indenture shall (i) extend the fixed maturity of any Notes of any series,
        or
        reduce the principal amount thereof, or reduce the rate or extend the time
        of
        payment of interest thereon, or reduce any premium payable upon the redemption
        thereof, or reduce the amount of the principal of a Discount Security that
        would
        be due and payable upon a declaration of acceleration of the maturity thereof
        pursuant to the Indenture, without the consent of the holder of each Note
        then
        outstanding and affected; (ii) reduce the aforesaid percentage of Notes,
        the
        holders of which are required to consent to any such supplemental indenture,
        or
        reduce the percentage of Notes, the holders of which are required to waive
        any
        default and its consequences, without the consent of the holder of each Note
        then outstanding and affected thereby; or (iii) modify any provision of Section
        6.01(c) of the Indenture (except to increase the percentage of principal
        amount
        of securities required to rescind and annul any declaration of amounts due
        and
        payable under the Notes), without the consent of the holder of each Note
        then
        outstanding and affected thereby. The Indenture also contains provisions
        permitting the Holders of a majority in aggregate principal amount of the
        Notes
        of all series at the time outstanding affected thereby, on behalf of the
        Holders
        of the Notes of such series, to waive any past default in the performance
        of any
        of the covenants contained in the Indenture, or established pursuant to the
        Indenture with respect to such series, and its consequences, except a default
        in
        the payment of the principal of or premium, if any, or interest on any of
        the
        Notes of such series. Any such consent or waiver by the registered Holder
        of
        this Note (unless revoked as pro-vided in the Indenture) shall be conclusive
        and
        binding upon such Holder and upon all future Holders and owners of this Note
        and
        of any Note issued in exchange herefor or in place hereof (whether by
        registration of transfer or otherwise), irrespective of whether or not any
        notation of such consent or waiver is made upon this Note.

      


      No
        reference herein
        to the Indenture and no provision of this Note or of the Indenture shall
        alter
        or impair the obligation of the Company, which is absolute and unconditional,
        to
        pay the principal of and premium, if any, and interest on this Note at the
        time
        and place and at the rate and in the money herein prescribed.

      


      As
        provided in the
        Indenture and subject to certain limitations therein set forth, this Note
        is
        transferable by the registered holder hereof on the Note Register of the
        Company, upon surrender of this Note for registration of transfer at the
        office
        or agency of the Company as may be designated by the Company accompanied
        by a
        written instrument or instruments of transfer in form satisfactory to the
        Company or the Trustee duly executed by the registered Holder hereof or his
        or
        her attorney duly authorized in writing, and thereupon one or more new Notes
        of
        authorized denominations and for the same aggregate principal amount and
        series
        will be issued to the designated transferee or transferees. No service charge
        will be made for any such trans-fer, but the Company may require payment
        of a
        sum sufficient to cover any tax or other governmental charge payable in relation
        thereto.

      


      Prior
        to due
        presentment for registration of transfer of this Note, the Company, the Trustee,
        any paying agent and any Note Registrar may deem and treat the registered
        Holder
        hereof as the absolute owner hereof (whether or not this Note shall be overdue
        and notwithstanding any notice of ownership or writing hereon made by anyone
        other than the Note Registrar) for the purpose of receiving payment of or
        on
        account of the principal hereof and premium, if any, and interest due hereon
        and
        for all other purposes, and neither the Company nor the Trustee nor any paying
        agent nor any Note Registrar shall be affected by any notice to the
        contrary.

      


      No
        recourse shall
        be had for the payment of the principal of or the interest on this Note,
        or for
        any claim based hereon, or otherwise in respect hereof, or based on or in
        respect of the Indenture, against any incorporator, stockholder, officer
        or
        director, past, present or future, as such, of the Company or of any predecessor
        or successor corporation, whether by virtue of any constitution, statute
        or rule
        of law, or by the enforcement of any assessment or penalty or otherwise,
        all
        such liability being, by the acceptance hereof and as part of the consideration
        for the issuance hereof, expressly waived and released.

      


      The
        Notes of this
        series are issuable only in registered form without coupons in denominations
        of
        $1,000 and any integral multiple thereof. As provided in the Indenture and
        subject to certain limitations, Notes of this series are exchangeable for
        a like
        aggregate principal amount of Notes of this series of a different authorized
        denomination, as requested by the Holder surrendering the same.

      


      All
        terms used in
        this Note which are defined in the Indenture shall have the meanings assigned
        to
        them in the Indenture.

      


      This
        Note shall not
        be entitled to any benefit under the Indenture hereinafter referred to, be
        valid
        or become obligatory for any purpose until the Certificate of Authentication
        hereon shall have been signed by or on behalf of the Trustee.

      


      IN
        WITNESS WHEREOF,
        the Company has caused this Instrument to be executed.

      


      
        	 	
                APPALACHIAN
                  POWER COMPANY

              
	 	 	 
	 	
                By:

              	 /s/
                Stephan T. Haynes
	 	 	
                Assistant
                  Treasurer

              
	
                Attest:

              	 	 
	 	 	 
	
                By: 
                  /s/ Thomas G. Berkemeyer

              	 	 
	
                Assistant
                  Secretary

              	 	 


      

       

      
        

      


      CERTIFICATE
        OF
        AUTHENTICATION

      


      This
        is one of the
        Notes of the series of Notes designated in accordance with, and referred
        to in,
        the within-mentioned Indenture.

      


      Dated
        April 10, 2006

      


      THE
        BANK OF NEW YORK

      


      By: 
/s/
        Mary LaGumina

          Authorized
        Signatory


      
        

      


      FOR
        VALUE RECEIVED,
        the undersigned hereby sell(s), assign(s) and transfer(s) unto

      


      (PLEASE
        INSERT SOCIAL SECURITY OR OTHER

      IDENTIFYING
        NUMBER OF ASSIGNEE)

      


      _______________________________________

      


      ________________________________________________________________

      


      ________________________________________________________________

      (PLEASE
        PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE,
        OF

      ________________________________________________________________

      ASSIGNEE)
        the within Note and all rights thereunder, hereby

      ________________________________________________________________

      irrevocably
        constituting and appointing such person attorney to


      ________________________________________________________________

      transfer
        such Note on the books of the Issuer, with full

      ________________________________________________________________

      power
        of substitution in the premises.

       

      


      Dated:________________________  _________________________

      


       

      NOTICE: The
        signature to this assignment must correspond with
        the name as written upon the face of the within Note in every particular,
        without alteration or enlargement or any change whatever and NOTICE:
        Signature(s) must be guaranteed by a financial institution that is a member
        of
        the Securities Transfer Agents Medallion Program (“STAMP”), the Stock Exchange
        Medallion Program (“SEMP”) or the New York Stock Exchange, Inc. Medallion
        Signature Program (“MSP”).