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<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 June 30, 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
<PAGE>
ITEM 1 - ORGANIZATION CHART
<TABLE>
<CAPTION>
Name Energy or State Percentage
of Reporting gas-related Date of Of of Voting
Company Company Organization Organization Securitie Held
Allegheny Energy, Inc. (1)
AYP Capital, Inc. (2)
<S> <C> <C> <C> <C> <C>
Allegheny Energy (3) Energy 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
Company Company Amount
Contributing Receiving Of Capital
Capital Capital Contribution
AYP Capital, Inc. Allegheny Energy $1,000 100 Shares of
Solutions, Inc. Common Stock
AYP Capital, Inc. Allegheny Energy $3,242,620 Capital Contributions
Solutions, Inc.
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 566,169 16,108 - 582,277
Power Energy support;
Service Solutions, planning &
Corporation Inc. implementation
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:
Total consolidated March 31, $4,339,938,00 line 1
capitalization as of 1998 0
Total capitalization multiplied by
15%
(line 1 multiplied by 0.15) 650,990,700 line 2
Greater of $50 million or line 2 $ 650,990,700 line 3
Total current aggregate investment:
(categorized by major line of
energy-related business)
Allegheny Energy Solutions, 1,327,348
Inc.
Total current aggregate 1,327,348 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) $649,663,352 line 5
Investments in gas-related companies:
None
ITEM 5 - OTHER INVESTMENTS
Major Line Other Other
of Energy- Investment Investment Reason for
Related in Last in This Difference in
Business U-9C-3 U-9C-3 Other
Report Report Investment
None
<PAGE>
ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS
Allegheny Energy Solutions, Inc. Statement of Income
for the Quarter and Year-to-date ended June 30, 1998.
Allegheny Energy Solutions, Inc. Balance Sheet as of
June 30, 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)
August 25, 1998
<PAGE>
ALLEGHENY ENERGY SOLUTIONS, INC.
STATEMENT OF INCOME
FOR THE PERIODS ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
Three Months EndYear To Date Ended
June 30, 1998 June 30, 1998
OPERATING REVENUES:
<S> <C> <C> <C>
IA05 Residential $1,656,467 $3,047,924
IA09 Commercial 3,075,033 5,660,882
IA13 Industrial 1,818,157 3,381,245
Wholesale and Other 17 17
Total Operating Revenues 6,549,674 12,090,068
OPERATING EXPENSES:
Power costs:
IC09 Purchased Power 5,737,668 10,688,177
IC22 Customer Accounting & Services 650,765 1,417,307
IC25 Administrative & General 470,958 759,002
Total Operation & Maintenance 6,859,391 12,864,486
IC29 Depreciation 4,535 9,017
IC35 Taxes other than income taxes 295,406 604,200
IC42 Federal and state income taxes (89,528) (256,463)
Total Operating Expenses 7,069,804 13,221,240
Operating Income (520,130) (1,131,172)
IG09 Other Income, Net 362,284 664,133
Interest Charges 8,421 9,249
Net Income ($166,268) ($476,289)
</TABLE>
Unaudited
<PAGE>
ALLEGHENY ENERGY SOLUTIONS, INC.
BALANCE SHEET
As of June 30, 1998
Assets
Property, Plant and Equipment:
At Original Cost $306,344
Accumulated Depreciation (11,933)
294,410
Current assets:
Cash 38,510
Accounts Receivable:
Electric Service 3,729,250
Other 1,716,841
Allowance for Uncollectibles (66,544)
Accounts Receivable - Affiliates 8,468
5,426,525
Deferred charges:
Other 15,010
Total Assets $5,735,945
Capitalization and Liabilities
Capitalization:
Common stock $1,000
Other paid-in capital 3,242,620
Retained earnings (1,916,272)
1,327,348
Current liabilities:
Short - Term Debt 649,500
Accounts payable - Affiliated 462,736
Accounts payable - Other 2,112,290
Taxes accrued:
Federal & State Income 169,161
Other 586,074
3,979,761
Deferred credit and liabilities
Other 428,836
Total Capitalization and Liabilities $5,735,945
Unaudited
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