<PAGE>
UNITED STATES
SECURITES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-9C-3
QUARTERLY REPORT PURSUANT TO RULE 58
For the quarter ended March 31, 1998
ALLEGHENY ENERGY, INC.
(Name of registered holding company)
10435 Downsville Pike, Hagerstown, Maryland 21740-1766
(Address of principal executive offices)
Inquiries concerning this Form U-9C-3 should be directed to:
Kenneth M. Jones
Allegheny Energy, Inc.
10435 Downsville Pike
Hagerstown, MD 21740-1766
(301) 665-2710
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ITEM 1 - ORGANIZATION CHART
<TABLE>
<CAPTION>
Name Energy or State Percentage
of Reporting gas-related Date of Of of Voting
Company Company Organization Organization Securities Held
<S> <C> <C> <C> <C>
Allegheny Energy, Inc. (1)
AYP Capital, Inc. (2)
Allegheny Energy (3) July 23, 1997 Delaware 100
Solutions, Inc.
</TABLE>
Nature of Business:
(1) Allegheny Energy, Inc. holds
directly all of the outstanding
securities in AYP Capital, Inc.
(2) AYP Capital, Inc. holds directly
all of the outstanding securities in
Allegheny Energy Solutions, Inc.
(3) Allegheny Energy Solutions, Inc. is
marketing electric power generation
within the scope of the Pennsylvania
retail customer choice pilot program.
Allegheny Energy Solutions, Inc. also
offers products and services,
complementing energy sales, to meet the
needs of both business and residential
customers.
NOTE: On November 18, 1997, a Limited
Liability Corporation Agreement was
signed by Allegheny Energy
Solutions, Inc. (Solutions) and
Duquesne Energy Partners, Inc.
(DEP). The agreement provided for
the formation of a new company,
Allegheny Energy Solutions, LLC
(LLC). The new company was
incorporated in the first quarter
of 1998. Solutions and DEP will
each hold a 50% interest in the
LLC. An application has been made
to the Pennsylvania Public Utility
Commission to transfer Solutions'
license to market power under the
Pennsylvania retail customer choice
pilot program to LLC. It is
anticipated that LLC will begin
marketing electric power and other
complementing energy services as
soon as the license transfer is
approved.
<PAGE>
ITEM 2 - ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL CONTRIBUTIONS
<TABLE>
<CAPTION>
Company Company Amount
Contributing Receiving Of Capital
Capital Capital Contribution
<S> <C> <C> <C>
AYP Capital, Inc. Allegheny Energy Solutions, Inc. $ 1,000 100 Shares of Common Stock
AYP Capital, Inc. Allegheny Energy Solutions, Inc. $3,242,620 Capital Contributions
</TABLE>
ITEM 3 - ASSOCIATE TRANSACTIONS
Part I - Transactions performed by reporting companies on
behalf of associate companies
Reporting Associate
Company Company Types of Direct Indirect Cost Total
Rendering Receiving Services Costs Costs Of Amount
Services Services Rendered Charged Charged Capital Billed
No services have been provided by the reporting company to associate companies
to date.
Part II -- Transactions performed by associate companies on behalf of reporting
companies
Associate Reporting
Company Company Types of Direct Indirect Cost Total
Rendering Receiving Services Costs Costs Of Amount
Services Services Rendered Charged Charged Capital Billed
Allegheny Allegheny Technical 476,449 20,130 - 496,579
Power Energy support;
Service Solutions, planning &
Corporation Inc. implementati
on of
financial
programs;
counsel on
corporate,
legal and
regulatory
matters;
general and
administrative
services
<PAGE>
ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT
Investments in energy-related companies:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Total consolidated capitalization as of March 31, 1998 $4,668,178,000 line 1
Total capitalization multiplied by 15%
(line 1 multiplied by 0.15) 700,226,700 line 2
Greater of $50 million or line 2 $ 700,226.700 line 3
Total current aggregate investment:
(categorized by major line of energy-related business)
Allegheny Energy Solutions, Inc. 1,493,616
Total current aggregate investment 1,493,616 line 4
Difference between the greater of $50 million or 15%
of capitalization and the total aggregate investment
of the registered holding company system
(line 3 less line 4) $ 698,733,084 line 5
</TABLE>
Investments in gas-related companies:
None
ITEM 5 - OTHER INVESTMENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Major Line Other Other
of Energy-Related Investment in Last Investment in This Reason for Difference in
Business U-9C-3 Report U-9C-3 Report Other Investment
</TABLE>
None
<PAGE>
ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS
Allegheny Energy Solutions, Inc. Statement of Income
for the Quarter and Year-to-date ended March 31, 1998.
Allegheny Energy Solutions, Inc. Balance Sheet as of March 31, 1998.
<PAGE>
Signature
Pursuant to the requirements of the Public Utilities
Holding Company Act of 1935, Allegheny Energy, Inc. has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ALLEGHENY ENERGY, INC.
/s/ KENNETH M. JONES
Kenneth M. Jones
(Chief Accounting Officer)
May 28, 1998
ALLEGHENY ENERGY SOLUTIONS, INC.
STATEMENT OF INCOME
FOR THE PERIODS ENDED MARCH 31, 1998
Three MonthsYear to Date
Ended Ended
OPERATING REVENUES:
Residential $1,391,457 $1,391,457
Commercial 2,585,849 2,585,849
Industrial 1,563,088 1,563,088
Total Operating Revenues 5,540,394 5,540,394
OPERATING EXPENSES:
Power costs:
Purchased Power 4,950,509 4,950,509
Customer Accounting & Services 766,542 766,542
Administrative & General 288,044 288,044
Total Operation & Maintenance 6,005,095 6,005,095
Depreciation 4,482 4,482
Taxes other than income taxes 308,794 308,794
Federal and state income taxes (166,935) (166,935)
Total Operating Expenses 6,151,436 6,151,436
Operating Income (611,042) (611,042)
Other Income, Net 301,849 301,849
Interest Charges 828 828
Net Income ($310,021) ($310,021)
Unaudited
ALLEGHENY ENERGY SOLUTIONS, INC.
BALANCE SHEET
As of March 31, 1998
Assets
Property, Plant and Equipment:
At Original Cost $180,761
Accumulated Depreciation (7,398)
173,363
Current assets:
Cash 62,562
Accounts Receivable:
Electric Service 3,181,307
Other 1,353,898
Allowance for Uncollectibles (33,785)
Accounts Receivable - Affiliates 8,387
Other 167,311
4,739,680
Deferred charges:
Other 244
Total Assets $4,913,287
Capitalization and Liabilities
Capitalization:
Common stock $1,000
Other paid-in capital 3,242,620
Retained earnings (1,750,004)
1,493,616
Current liabilities:
Short-term debt 600,000
Accounts payable - Affiliated 407,065
Accounts payable - Other 1,886,097
Taxes accrued:
Federal & State Income 298,657
Other 214,418
3,406,237
Deferred credit and liabilities
Other 13,434
Total Capitalization and Liabilities $4,913,287
Unaudited
