SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 December 23, 1996 Date of Report (Date of earliest event reported) KENTUCKY POWER COMPANY (Exact name of registrant as specified in its charter) Kentucky 1-6858 61-0247775 (State or other jurisdiction of (Commission (I.R.S. employer incorporation or organization) file number) identification no.) 1701 Central Avenue Ashland, Kentucky 41101 (Address of principal executive offices, including zip code) (800) 572-1141 (Registrant's telephone number, including area code) ITEM 5. Other Events During the audit of Kentucky Power Company's ("KPCo") consolidated Federal income tax returns for the years 1991 through 1993, Internal Revenue Service ("IRS") agents requested a ruling from their National Office that certain interest deductions related to corporate owned life insurance claimed by KPCo for these years should be disallowed. On December 23, 1996, KPCo filed a brief with the National Office of the IRS refuting the agents' position. Although adjustments have not been proposed, a disallowance of these interest deductions through December 31, 1996 would have an adverse effect on earnings of approximately $5 million (including interest). KPCo believes it will ultimately prevail on this issue and would vigorously contest any adjustments which may be assessed. Accordingly, KPCo has not recorded any amounts with respect to such matters. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. KENTUCKY POWER COMPANY (Registrant) /s/ A. A. Pena A. A. Pena, Treasurer Dated: January 21, 1997