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UNITED STATES
SECURITES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-9C-3
QUARTERLY REPORT PURSUANT TO RULE 58
For the quarter ended December 31, 1997
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
Name Energy or State Percentage
of Reporting gas-related Date of Of of Voting
Company Company Organization Organization Securities Held
Allegheny Energy, Inc. (1)
AYP Capital, Inc. (2)
Energy July 23, 1997 Delaware 100
Allegheny Energy (3)
Solutions, Inc.
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.
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ITEM 2 - ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL CONTRIBUTIONS
<TABLE>
<CAPTION>
<S> <S> <C> <S>
Company Company Amount
Contributing Receiving Of Capital
Capital Capital Contribution
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 452,743 69,774 - 522,517
Power Energy support;
Service Solutions, planning &
Corporation Inc. implementati
on of
financial
programs;
counsel on
corporate,
legal and
regulatory
matters;
general and
administrati
ve services
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ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT
Investments in energy-related
companies:
Total consolidated
capitalization as of December 31, 1997 $4,620,137,000 line 1
Total capitalization multiplied by 15%
(line 1 multiplied by 0.15) 693,020,550 line 2
Greater of $50 million or line 2 $ 693,020,550 line 3
Total current aggregate investment:
(categorized by major line of
energy-related business)
Allegheny Energy Solutions, 1,803,636
Inc.
Total current aggregate 1,803,636 line 4
investment
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) $691,216,914 line 5
Investments in gas-related companies:
None
ITEM 5 - OTHER INVESTMENTS
Major Line Other Other
of Energy-Related Investment in Last Investment in This Reason for Difference
Business U-9C-3 Report U-9C-3 Report in Other Investment
None
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ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS
Allegheny Energy Solutions, Inc. Statement of Income for the Quarter and
Year-to-date ended December 31, 1997.
Allegheny Energy Solutions, Inc. Balance Sheet as of December 31, 1997.
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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)
March 27, 1998
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March 27, 1998
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, DC 20549
Gentlemen:
Enclosed is a conformed copy of the Allegheny Energy,
Inc. Quarterly Report on Form U-9C-3 for the quarter ended
December 31, 1997, pursuant to the requirements of the
Public Utilities Holding company Act of 1935.
Very truly yours,
/s/ Kenneth M. Jones
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ALLEGHENY ENERGY SOLUTIONS, INC.
STATEMENT OF INCOME
FOR THE PERIODS ENDED DECEMBER 31, 1997
Three Month Year
Ended Ended
OPERATING REVENUES:
Residential $420,622 $420,622
Commercial 548,974 548,974
Industrial 246,398 246,398
Total Operating Revenues 1,215,994 1,215,994
OPERATING EXPENSES:
Power costs:
Purchased Power 914,947 914,947
Customer Accounting & Services 1,270,467 2,747,384
Administrative & General 817,848 846,339
Total Operation & Maintenance 3,003,262 4,508,670
Depreciation 2,916 2,916
Taxes other than income taxes 481 (19,488)
Federal and state income taxes (255,472) (775,376)
Total Operating Expenses 2,751,187 3,716,722
Operating Income (1,535,193) (2,500,728)
Other Income, Net 1,060,745 1,060,745
Net Income ($474,448) ($1,439,983)
Unaudited
Unaudited
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ALLEGHENY ENERGY SOLUTIONS,
BALANCE SHEET
As of December 31, 1997
Assets
Property, Plant and Equipment:
At Original Cost $175,000
Accumulated Depreciation (2,917)
172,083
Current assets:
Cash 1,398,844
Accounts Receivable:
Electric Service 1,249,487
Other 1,060,715
Allowance for Uncollectibles (6,080)
3,702,966
Deferred charges:
Other 182
Total Assets $3,875,231
Capitalization and Liabilities
Capitalization:
Common stock $1,000
Other paid-in capital 3,242,620
Retained earnings (1,439,984)
1,803,636
Current liabilities:
Accounts payable - Affiliated 406,706
Accounts payable - Other 1,041,655
Taxes accrued:
Federal & State Income 622,624
Other 610
2,071,595
Total Capitalization and Liabilities $3,875,231
Unaudited
ALLEGHENY ENERGY SOLUTIONS, INC.
STATEMENT OF INCOME
FOR THE PERIODS ENDED DECEMBER 31, 1997
Three Month Year
Ended Ended
OPERATING REVENUES:
Residential $420,622 $420,622
Commercial 548,974 548,974
Industrial 246,398 246,398
Total Operating Revenues 1,215,994 1,215,994
OPERATING EXPENSES:
Power costs:
Purchased Power 914,947 914,947
Customer Accounting & Services 1,270,467 2,747,384
Administrative & General 817,848 846,339
Total Operation & Maintenance 3,003,262 4,508,670
Depreciation 2,916 2,916
Taxes other than income taxes 481 (19,488)
Federal and state income taxes (255,472) (775,376)
Total Operating Expenses 2,751,187 3,716,722
Operating Income (1,535,193) (2,500,728)
Other Income, Net 1,060,745 1,060,745
Net Income ($474,448) ($1,439,983)
Unaudited