File No. 70-6505
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 23
TO
APPLICATION OR DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
West Penn Power Company
800 Cabin Hill Drive
Greensburg, PA 15601
(Name of company or companies filing this statement and addresses
of principal executive offices)
Allegheny Power System, Inc.
(Name of top registered holding company parent of each applicant
or declarant)
Nancy H. Gormley, Esq.
Allegheny Power System, Inc.
12 East 49th Street
New York, NY 10017
(Name and address of agent for service)
<PAGE>
The undersigned hereby amends its Application or Declaration as
previously amended as follows:
1. The proposed transaction involves the refunding of a series of
presently outstanding pollution control revenue bonds ("Series E Bonds")
issued by the Washington County Development Authority ("Authority") in 1985.
Due to the change in interest rates from the time that the Series E Bonds were
originally issued, the Authority proposes to refund the Series E Bonds by
issuing a new series of pollution control revenue bonds ("Series G Bonds") at
a lower interest rate. West Penn Power Company ("West Penn") requests
authority from the Securities and Exchange Commission ("Commission") to enter
into new long-term promissory notes insofar as the terms and conditions of the
long-term bonds to be issued by the Authority affect the payments to be made
by West Penn under the long-term promissory notes presently outstanding.
As background, by Commission order dated December 8, 1980 (HCAR
No. 21830), West Penn was authorized to enter into the first phase of a plan
to finance the installation of pollution control equipment and facilities
("Facilities") at West Penn's Mitchell Power Station in Washington County,
Pennsylvania. These Facilities are now complete. That initial phase involved
the issuance of $60,000,000 principal amount of three-year pollution control
revenue bonds ("Series A Bonds") by the Authority.
By Commission order dated May 11, 1981 (HCAR No. 22045), West Penn
was authorized to enter into a second phase of financing of the Facilities.
The second phase contemplated a refunding of the Series A Bonds prior to
maturity through the issuance of long-term bonds by the Authority and the
<PAGE>
issuance of notes by West Penn having maturities not to exceed forty years.
The Series A Bonds bore interest at the rate of 9% per annum, matured on
December 1, 1983, and were subject to optional redemption on or after December
1, 1982 at 100% of the principal amount thereof plus accrued interest to the
redemption date. Jurisdiction was reserved in the May 11, 1981 order over the
terms and conditions of the long-term bonds to be issued by the Authority
insofar as such terms and conditions affected the payments to be made by West
Penn under the proposed long-term promissory notes and over the fees,
commissions and expenses to be incurred in connection with the long-term
financing.
By Commission order dated February 9, 1983 (HCAR No. 22849), West
Penn was authorized to deliver its long-term promissory note to the Authority
corresponding to $30,000,000 aggregate principal amount of long-term bonds
("Series B Bonds") maturing January 15, 2003, and bearing interest at 9.75%
per annum issued by the Authority. The proceeds were authorized to be used
for the redemption of a portion of the Series A Bonds. The February 9, 1983
order reserved jurisdiction over the fees, commissions, and expenses to be
incurred in connection with the Series B Bonds and over the terms and
conditions of the additional series of bonds to be issued by the Authority,
insofar as such terms and conditions affected the payments to be made by West
Penn under the proposed long-term promissory notes and with respect to fees,
commissions, and expenses to be incurred in connection with such additional
series of long-term bonds.
<PAGE>
By Commission order dated March 28, 1983 (HCAR 22894), West Penn
was authorized to deliver its long-term promissory note to the Authority
corresponding to $31,500,000 aggregate principal amount of long-term bonds
("Series C Bonds") maturing March 15, 2003 and bearing interest at 9.50% per
annum issued by the Authority. The proceeds were authorized to be used for
the redemption of the balance of the Series A Bonds and for the payment of
expenses connected with the issuance of Series B and C Bonds. Jurisdiction
was reserved by the Commission with respect to the terms and conditions of any
additional series of long-term bonds to be issued by the Authority, insofar as
the terms and conditions would affect the payments to be made by West Penn
under the outstanding long-term promissory notes, and with respect to the
fees, commissions and expenses to be incurred in connection with such
additional series of long-term bonds.
By Commission order dated August 1, 1983 (HCAR No. 23017), West
Penn was authorized to issue its long-term promissory note to the Authority
corresponding to $15,150,000 aggregate principal amount of long-term bonds
<PAGE>
("Series D Bonds") issued by the Authority maturing August 1, 1986 and bearing
interest at 6-7/8% per annum. The Series D Bonds did not have a sinking fund
and were not callable for redemption. The proceeds of the Series D issue were
applied by West Penn to the payment of the expenses of the issue and the cost
of the Facilities.
By Commission order dated May 3, 1985 (HCAR No. 23679), West Penn
was authorized to issue its long-term promissory note to the Authority
corresponding to an amount not to exceed $18,000,000 aggregate principal
amount of long-term bonds ("Series E Bonds"). Series E Bonds in the aggregate
principal amount of $15,400,000 were issued by the Authority, maturing April
1, 2014, along with West Penn's corresponding promissory note for $15,400,000.
The proceeds of the Series E Bonds were applied by West Penn to the payment at
maturity of the Series D Bonds and to the costs of issuance.
By Commission order dated February 11, 1993 (HCAR No. 25743), West
Penn was authorized to issue its long-term promissory note to the Authority
corresponding to $61,500,000 aggregate principal amount of long-term bonds
("Series F Bonds") issued by the Authority maturing March 17, 2003. The
proceeds of the Series F Bonds were used to refund the Series B Bonds and the
Series C Bonds.
Currently only Series E Bonds and the Series F Bonds are
outstanding.
2. By adding the following material to end of Item 1. Description
of Proposed Transactions:
West Penn requests authority until December 31, 1997 to enter into
the proposed refunding transaction.
The Authority proposes to issue $15,400,000 aggregate principal
amount of a new series of long-term bonds ("Series G Bonds"), the proceeds of
which will be used to refund the Series E Bonds. The Series G Bonds will be
issued under a trust indenture with a corporate trustee, approved by West
<PAGE>
Penn, and will be sold at such time at such interest rate, for such price, and
with such maturity date as shall be approved by West Penn. The timing of the
financing will depend upon a subjective determination by West Penn of market
conditions.
West Penn will deliver concurrently with the issuance of Series G
Bonds, its non-negotiable Pollution Control Note ("Note") corresponding to
such series of Bonds in respect of principal amount, interest rates and
redemption provisions (which may include a special right of the holder to
require the redemption or repurchase of the Bond at stated intervals) and
having installments of principal corresponding to any mandatory sinking fund
payments and stated maturities. The terms and conditions of the Note will
reflect those of the Series G Bonds. The Note will be secured by a second
lien on the Facilities and certain other properties, pursuant to the Mortgage
and Security Agreement delivered by West Penn to the trustee creating a
mortgage and security interest in the Facilities and certain other property
(subject to the lien securing West Penn's first mortgage bonds). Payments on
such Note will be made to the Trustee under the indenture described below and
applied by the Trustee to pay the maturing principal and redemption price of
and interest and other costs on the Series G Bonds as the same become due.
West Penn also proposes to pay any trustees' fees or other expenses incurred
by the Authority. The Notes will be secured by a second lien on the
Facilities and certain other properties, pursuant to the Mortgage and Security
Agreement (a copy of the form of which will be filed as Exhibit G-1 hereto)
delivered by West Penn to the Trustee creating a mortgage and security
interest in the Facilities and certain other property (subject to the lien
<PAGE>
securing West Penn's First Mortgage Bonds). The Notes will not constitute
"unsecured debt" within the meaning of the provisions of West Penn's charter.
West Penn does not anticipate that the Series G Bonds will be
issued with "floating" interest rates during all or a portion of the stated
life of the Bonds. If West Penn should determine that it will use a
"floating" interest rate, it will so notify the Commission by filing an
appropriate certificate pursuant to Rule 24.
It is expected that the Authority will engage Goldman, Sachs & Co.
and any co-managers that may be desirable to provide financial advice and,
together with such other underwriters as may be designated, underwrite the
sale of the Series G Bonds. West Penn has been informed that the Authority
has legal authority to issue tax exempt revenue bonds in accordance with the
proposed documents and West Penn understands that legal opinions to that
effect will be delivered to appropriate parties at, or prior to, the closing
date. The Bonds may be in either coupon or registered form and will bear
interest semi-annually at rates to be determined. The Series G Bonds will be
issued pursuant to a supplemental indenture which will provide for redemption,
no-call and other appropriate provisions to be determined. The supplemental
indenture will also provide that substantially all the proceeds of the sale of
the Bonds by the Authority must be applied to the cost of the Facilities,
including the cost of refunding the Series E Bonds.
The Series G Bonds will be secured by the Note and will be
supported by various covenants of West Penn contained in the original
<PAGE>
Pollution Control Financing Agreement (the "Agreement"). A copy of the form
of Indenture has been filed as Exhibit G-2 and a copy of the form of Sixth
Supplemental Indenture will be filed by amendment as Exhibit G-2(vi). A copy
of the form of Agreement has been filed as Exhibit G-3.
It is desired to consummate the proposed transactions and refund
the Series E Bonds to provide the lowest cost of permanent financing for non-
revenue-producing pollution control equipment which West Penn has been
required to install to meet air and water quality standards. West Penn has
been advised that the annual interest rate on tax exempt bonds has been
approximately 1% to 3% lower than the interest rate on taxable obligations of
comparable quality, depending upon the type to be sold by the Authority.
West Penn will not enter into the proposed refunding transaction
unless the estimated present value savings derived from the net difference
between interest payments on the new issue of comparable securities and on the
securities to be refunded is, on an after tax basis, greater than the present
value of all redemption and issuing costs, assuming an appropriate discount
rate. The discount rate used shall be the estimated after tax interest rate
on the Series E Bonds to be issued.
3. Applicant hereby amends Item 3. Applicable Statutory
Provisions, and replaces it with the following:
West Penn is advised that Sections 6(a) and 7 under the Act are or
may be applicable to the proposed transactions.
<PAGE>
4. Applicant hereby amends Item 4. Regulatory Approval, and
replaces it with the following:
An application has been filed with the Pennsylvania Public Utility
Commission for approval of the proposed transaction. An order approving the
transaction was issued by the Pennsylvania Public Utility Commission on
December 15, 1994. No other state or federal commission (other than the
Securities and Exchange Commission) has jurisdiction over the proposed
transaction.
5. By adding the following material to Item 2. Fees,
Commissions and Expenses:
The following estimated fees and expenses
are expected to be incurred by West Penn
in connection with the issuance of
Pollution Control Bonds, Series G:
Bond-Series G
Filing Fee - SEC '35 Act $ 2,000
Bond Counsel fees and expenses 35,000
Commission Counsel fees 30,000
Price Waterhouse 17,000
Printing expenses 18,000
Trustee's fees 9,000
Underwriter's Counsel fees and expenses 45,000
<PAGE>
Blue Sky Fees 3,000
Rating Agency fees 25,000
$184,000
6. The undersigned hereby amends Item 6. Exhibits and Financial
Statements, as follows:
(a) Exhibits:
D-4 The Application to the Pennsylvania
Public Utility Commission (to be
filed by Amendment).
D-5 The Pennsylvania Public Utility
Commission's Order approving West
Penn's Application (to be filed by
Amendment).
G Financial Data Schedules.
H Form of Notice.
(b) Financial Statements as of December 31, 1994:
3-A Balance sheets of West Penn per books and pro
forma.
3-B Statements of income and retained earnings of
West Penn per books and pro forma.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company
Act of 1935, the undersigned company has duly caused this statement to be
signed on its behalf by the undersigned thereunto duly authorized.
WEST PENN POWER COMPANY
By CAROL G. RUSS
Carol G. Russ
Counsel
Dated: March 20, 1995
U:\DUMP\MITCHELL\POSTEF23
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<EXCHANGE-RATE> 1
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,004,212
<OTHER-PROPERTY-AND-INVEST> 100,228
<TOTAL-CURRENT-ASSETS> 235,417
<TOTAL-DEFERRED-CHARGES> 390,527
<OTHER-ASSETS> 1,474
<TOTAL-ASSETS> 2,731,858
<COMMON> 465,994
<CAPITAL-SURPLUS-PAID-IN> 55,687
<RETAINED-EARNINGS> 433,801
<TOTAL-COMMON-STOCKHOLDERS-EQ> 955,482
0
149,708
<LONG-TERM-DEBT-NET> 836,426
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 27,000
0
<CAPITAL-LEASE-OBLIGATIONS> 2,468
<LEASES-CURRENT> 906
<OTHER-ITEMS-CAPITAL-AND-LIAB> 759,868
<TOT-CAPITALIZATION-AND-LIAB> 2,731,858
<GROSS-OPERATING-REVENUE> 1,128,242
<INCOME-TAX-EXPENSE> 50,385
<OTHER-OPERATING-EXPENSES> 935,963
<TOTAL-OPERATING-EXPENSES> 986,348
<OPERATING-INCOME-LOSS> 141,894
<OTHER-INCOME-NET> 15,347
<INCOME-BEFORE-INTEREST-EXPEN> 157,241
<TOTAL-INTEREST-EXPENSE> 56,226
<NET-INCOME> 120,046
8,504
<EARNINGS-AVAILABLE-FOR-COMM> 111,542
<COMMON-STOCK-DIVIDENDS> 90,029
<TOTAL-INTEREST-ON-BONDS> 45,250
<CASH-FLOW-OPERATIONS> 0<F1>
<EPS-PRIMARY> 0<F2>
<EPS-DILUTED> 0<F2>
<FN>
<F1>Not calculated for Form U-1 purposes.
<F2>All common stock is owned by parent, no EPS required.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<EXCHANGE-RATE> 1
<BOOK-VALUE> PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 2,004,212
<OTHER-PROPERTY-AND-INVEST> 100,228
<TOTAL-CURRENT-ASSETS> 235,072
<TOTAL-DEFERRED-CHARGES> 391,297
<OTHER-ASSETS> 1,474
<TOTAL-ASSETS> 2,732,283
<COMMON> 465,994
<CAPITAL-SURPLUS-PAID-IN> 55,687
<RETAINED-EARNINGS> 433,801
<TOTAL-COMMON-STOCKHOLDERS-EQ> 955,482
0
149,708
<LONG-TERM-DEBT-NET> 836,426
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 27,000
0
<CAPITAL-LEASE-OBLIGATIONS> 2,468
<LEASES-CURRENT> 906
<OTHER-ITEMS-CAPITAL-AND-LIAB> 760,293
<TOT-CAPITALIZATION-AND-LIAB> 2,732,283
<GROSS-OPERATING-REVENUE> 1,128,242
<INCOME-TAX-EXPENSE> 50,571
<OTHER-OPERATING-EXPENSES> 935,963
<TOTAL-OPERATING-EXPENSES> 986,534
<OPERATING-INCOME-LOSS> 141,708
<OTHER-INCOME-NET> 15,347
<INCOME-BEFORE-INTEREST-EXPEN> 157,055
<TOTAL-INTEREST-EXPENSE> 55,783
<NET-INCOME> 120,303
8,504
<EARNINGS-AVAILABLE-FOR-COMM> 111,799
<COMMON-STOCK-DIVIDENDS> 90,029
<TOTAL-INTEREST-ON-BONDS> 45,250
<CASH-FLOW-OPERATIONS> 0<F1>
<EPS-PRIMARY> 0<F2>
<EPS-DILUTED> 0<F2>
<FN>
<F1>Not calculated for Form U-1 purposes.
<F2>All common stock is owned by parent, no EPS required.
</FN>
</TABLE>
EXHIBIT H
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- : )
West Penn Power Company
Notice of Authority to Refund Pollution Control Notes
West Penn Power Company, 800 Cabin Hill Drive, Greensburg,
Pennsylvania 15601, a Pennsylvania corporation (hereinafter "West Penn") and
a subsidiary of Allegheny Power System, Inc., a registered public utility
holding company, has filed an Application or Declaration pursuant to Sections
6(a) and 7 of the Public Utility Holding Company Act of 1935 (the "Act").
West Penn requests authority until December 31, 1997 to enter into
the proposed refunding transaction.
The Washington County Development Authority ("Authority") proposes
to issue $15,400,000 aggregate principal amount of a new series of long-term
bonds ("Series G Bonds"), the proceeds of which will be used to refund the
Series E Bonds. The Series G Bonds will be issued under a trust indenture
with a corporate trustee, approved by West Penn, and will be sold at such time
at such interest rate, for such price, and with such maturity date as shall be
approved by West Penn. The timing of the financing will depend upon a
subjective determination by West Penn of market conditions.
West Penn will deliver concurrently with the issuance of Series G
Bonds, its non-negotiable Pollution Control Note ("Note") corresponding to
such series of Bonds in respect of principal amount, interest rates and
<PAGE>
redemption provisions (which may include a special right of the holder to
require the redemption or repurchase of the Bond at stated intervals) and
having installments of principal corresponding to any mandatory sinking fund
payments and stated maturities. The terms and conditions of the Note will
reflect those of the Series G Bonds. The Note will be secured by a second
lien on the Facilities and certain other properties, pursuant to the Mortgage
and Security Agreement delivered by West Penn to the trustee creating a
mortgage and security interest in the Facilities and certain other property
(subject to the lien securing West Penn's first mortgage bonds). Payments on
such Note will be made to the Trustee under the indenture described below and
applied by the Trustee to pay the maturing principal and redemption price of
and interest and other costs on the Series G Bonds as the same become due.
West Penn also proposes to pay any trustees' fees or other expenses incurred
by the Authority. The Notes will be secured by a second lien on the
Facilities and certain other properties, pursuant to the Mortgage and Security
Agreement (a copy of the form of which will be filed as Exhibit G-1 hereto)
delivered by West Penn to the Trustee creating a mortgage and security
interest in the Facilities and certain other property (subject to the lien
securing West Penn's First Mortgage Bonds). The Notes will not constitute
"unsecured debt" within the meaning of the provisions of West Penn's charter.
West Penn does not anticipate that the Series G Bonds will be
issued with "floating" interest rates during all or a portion of the stated
life of the Bonds. If West Penn should determine that it will use a
"floating" interest rate, it will so notify the Commission by filing an
appropriate certificate pursuant to Rule 24.
<PAGE>
It is expected that the Authority will engage Goldman, Sachs & Co.
and any co-managers that may be desirable to provide financial advice and,
together with such other underwriters as may be designated, underwrite the
sale of the Series G Bonds. West Penn has been informed that the Authority
has legal authority to issue tax exempt revenue bonds in accordance with the
proposed documents and West Penn understands that legal opinions to that
effect will be delivered to appropriate parties at, or prior to, the closing
date. The Bonds may be in either coupon or registered form and will bear
interest semi-annually at rates to be determined. The Series G Bonds will be
issued pursuant to a supplemental indenture which will provide for redemption,
no-call and other appropriate provisions to be determined. The supplemental
indenture will also provide that substantially all the proceeds of the sale of
the Bonds by the Authority must be applied to the cost of the Facilities,
including the cost of refunding the Series E Bonds.
The Series G Bonds will be secured by the Note and will be
supported by various covenants of West Penn contained in the original
Pollution Control Financing Agreement (the "Agreement"). A copy of the form
of Indenture has been filed as Exhibit G-2 and a copy of the form of Sixth
Supplemental Indenture will be filed by amendment as Exhibit G-2(vi). A copy
of the form of Agreement has been filed as Exhibit G-3.
It is desired to consummate the proposed transactions and refund
the Series E Bonds to provide the lowest cost of permanent financing for non-
revenue-producing pollution control equipment which West Penn has been
required to install to meet air and water quality standards. West Penn has
<PAGE>
been advised that the annual interest rate on tax exempt bonds has been
approximately 1% to 3% lower than the interest rate on taxable obligations of
comparable quality, depending upon the type to be sold by the Authority.
West Penn will not enter into the proposed refunding transaction
unless the estimated present value savings derived from the net difference
between interest payments on the new issue of comparable securities and on the
securities to be refunded is, on an after tax basis, greater than the present
value of all redemption and issuing costs, assuming an appropriate discount
rate. The discount rate used shall be the estimated after tax interest rate
on the Series E Bonds to be issued.
Except as described herein, no associate company or affiliate of
the Applicant or any affiliate of any such associate company has any material
interest, directly or indirectly, in the proposed transactions.
The application and any amendments thereto are available for
public inspection through the Commission's Office of Public Reference.
Interested persons wishing to comment or request a hearing should submit their
views in writing by , 1995, to the Secretary, Securities and
Exchange Commission, Washington, DC 20549, and serve a copy on the Applicant
at the address specified above. Proof of service (by affidavit or, in case of
an attorney at law, by certificate) should be filed with the request. Any
request for a hearing shall identify specifically the issues of fact or law
that are disputed. A person who so requests will be notified of any hearing,
if ordered, and will receive a copy of any notice or order issued in this
<PAGE>
matter. After said date, the application, as filed or as it may be amended,
may be granted.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
CONTENTS
Statement
No.
Balance sheets at December 31, 1994, and pro forma giving
effect as at that date to the adjustments set forth herein:
West Penn Power Company and Subsidiaries 1-A
Statements of income and retained earnings for twelve months
ended December 31, 1994, and pro forma giving effect
as at beginning of period to the adjustments set forth herein:
West Penn Power Company and Subsidiaries 1-B
These financial statements have been prepared for Form U-1
purposes and are unaudited.
Reference is made to the Notes to Financial Statements in the
Allegheny Power System companies combined Annual Report on
Form 10-K for the year ended December 31, 1994.
The income statements do not reflect any additional income from
investments which may be made with the proceeds from the
transactions set forth in this application-declaration.
<PAGE>
Statement 1-A
<TABLE>
<CAPTION>
WEST PENN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET - DECEMBER 31, 1994 PER BOOKS
AND PRO FORMA GIVING EFFECT AS AT THAT DATE
TO THE ADJUSTMENTS SET FORTH HEREIN
(Thousands)
Per Books Adjustments* Pro Forma
Assets
Property, plant, and equipment:
<S> <C> <C> <C>
At original cost 3,013,777 3,013,777
Accumulated depreciation (1,009,565) (1,009,565)
Investments and other assets:
Allegheny Generating Company -
common stock at equity 100,228 100,228
Other 1,474 1,474
Current assets:
Cash and temporary cash investments 345 (15,283)(1) 0
14,938 (2)
Accounts receivable:
Electric service 127,287 127,287
Affiliated and other 11,862 11,862
Allowance for uncollectible accounts (8,267) (8,267)
Notes receivable from affiliates 1,000 1,000
Materials and supplies--at average cost:
Operating and construction 39,922 39,922
Fuel 38,205 38,205
Deferred income taxes 12,538 12,538
Prepaid and other 12,525 12,525
Deferred charges:
Regulatory assets 364,473 364,473
Unamortized loss on reacquired debt 10,494 308 (1) 10,802
Other 15,560 462 (2) 16,022
Total Assets 2,731,858 425 2,732,283
(1) Proposed retirement by the Company of $15,400,000 principal amount of
existing Pollution Control Revenue Bonds plus optional redemption premium.
(2) Proposed sale by the Company of $15,400,000 principal amount of New
Pollution Control Revenue Bonds, less estimated issuance expenses.
</TABLE>
<PAGE>
Statement 1-A
(continued)
<TABLE>
<CAPTION>
WEST PENN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET - DECEMBER 31, 1994 PER BOOKS
AND PRO FORMA GIVING EFFECT AS AT THAT DATE
TO THE ADJUSTMENTS SET FORTH HEREIN
(Thousands)
Per Books Adjustments* Pro Forma
Capitalization and Liabilities
Capitalization:
Common stock:
Common stock - no par value, authorized
28,902,923 shares, outstanding
24,361,586 shares (issued 2,000,000
<S> <C> <C> <C>
shares since 1-1-94) 465,994 465,994
Other paid-in capital (no change
since 1-1-94) 55,687 55,687
Retained earnings 433,801 433,801
Preferred stock:
Cumulative preferred stock - par value
$100 per share, authorized 3,097,077
shares, outstanding 1,497,077 shares:
Not subject to mandatory redemption 149,708 149,708
Long-term debt 836,426 (15,400)(1) 836,426
15,400 (2)
Current liabilities:
Short-term debt 425 (1) 425
Long-term debt due within one year 27,000 27,000
Accounts payable 107,792 107,792
Accounts payable to affiliates 6,477 6,477
Taxes accrued:
Federal and state income 9,217 9,217
Other 20,637 20,637
Interest accrued 16,475 16,475
Other 24,028 24,028
Deferred credits and other liabilities:
Unamortized investment credit 52,946 52,946
Deferred income taxes 471,515 471,515
Regulatory liabilities 39,881 39,881
Other 14,274 14,274
Total Capitalization and Liabilities 2,731,858 425 2,732,283
</TABLE>
<PAGE>
Statement 1-B
<TABLE>
<CAPTION>
WEST PENN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME FOR TWELVE MONTHS ENDED DECEMBER 31, 1994
PER BOOKS AND PRO FORMA GIVING EFFECT AS AT BEGINNING OF PERIOD
TO THE ADJUSTMENTS SET FORTH HEREIN
(Thousands)
Per Books Adjustments* Pro Forma
<S> <C> <C> <C>
ELECTRIC OPERATING REVENUES 1,128,242 1,128,242
OPERATING EXPENSES:
Operation:
Fuel 252,108 252,108
Purchased power and exchanges, net 247,194 247,194
Deferred power costs, net 2,880 2,880
Other 145,781 145,781
Maintenance 111,841 111,841
Depreciation 88,935 88,935
Taxes other than income taxes 87,224 87,224
Federal and state income taxes 50,385 186 50,571
Total Operating Expenses 986,348 186 986,534
Operating Income 141,894 (186) 141,708
OTHER INCOME AND DEDUCTIONS:
Allowance for other than borrowed funds
used during construction 6,729 6,729
Asset write-off, net (5,179) (5,179)
Other income, net 13,797 13,797
Total Other Income and Deductions 15,347 15,347
Income Before Interest Charges 157,241 (186) 157,055
INTEREST CHARGES:
Interest on first mortgage bonds 45,250 45,250
Interest on other long-term obligations 12,852 (443) 12,409
Other interest 2,172 2,172
Allowance for borrowed funds used during
construction (4,048) (4,048)
Total Interest Charges 56,226 (443) 55,783
Consolidated income before cumulative
effect of accounting change 101,015 257 101,272
Cumulative effect of accounting
change, net 19,031 19,031
Consolidated Net Income 120,046 257 120,303
*Retirement of $15,400,000 existing Pollution Control Revenue Bonds -
interest rate of 9-3/8% 1,444
Sale of $15,400,000 New Pollution Control Revenue Bonds -
assumed interest rate of 6-1/2% 1,001
Decrease in interest on pollution control revenue bonds 443
Increase in federal and state income taxes 186
Increase in consolidated net income 257
</TABLE>
<PAGE>
Statement 1-B
(continued)
<TABLE>
<CAPTION>
WEST PENN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
FOR TWELVE MONTHS ENDED DECEMBER 31, 1994
(Thousands)
<S> <C>
Balance at January 1, 1994 412,288
Add:
Consolidated net income 120,046
532,334
Deduct:
Dividends on capital stock:
Preferred stock 8,504
Common stock 90,029
Total deductions 98,533
Balance at December 31, 1994 433,801
</TABLE>
<PAGE>
