File No. 70-6505
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 24
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>
1. The undersigned hereby amends Item 6. Exhibits and Financial
Statements, by filing herewith the following:
(a) Exhibits:
D-4 Application to the
Pennsylvania Public Utility
Commission.
D-5 Pennsylvania Public Utility
Commission's Order approving
West Penn's Application.
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 27, 1995
U:\DUMP\MITCHELL\POSTEF24
BEFORE THE
PENNSYLVANIA PUBLIC UTILITY COMMISSION
Securities Certificate of WEST PENN ) SECURITIES CERTIFICATE
POWER COMPANY in respect of the proposed ) No. 1994
issuance of secured non-negotiable )
solid waste disposal notes not to exceed )
$35,000,000 and non-negotiable pollution )
control refunding notes) not to )
exceed $47,000,000 )
TO THE PENNSYLVANIA PUBLIC UTILITY COMMISSION:
1. Name and address of the public utility filing this
Securities Certificate:
West Penn Power Company
800 Cabin Hill Drive
Greensburg, Pennsylvania 15601
2. Name and address of West Penn Power Company attorneys:
Peter J. Dailey and John L. Munsch
800 Cabin Hill Drive
Greensburg, Pennsylvania 15601
3. West Penn Power Company ("West Penn") is a corporation
organized under the laws of the Commonwealth of Pennsylvania on March
1, 1916. Its charter provides that the term of existence of the
Company shall be perpetual. It is vested with lawful authority to
render electric service for light, heat and power, and is now
rendering such service to the public in Adams, Allegheny, Armstrong,
Bedford, Butler, Cameron, Centre, Clarion, Clinton, Elk, Fayette,
Franklin, Fulton, Greene, Huntingdon, Indiana, Jefferson, Lycoming,
McKean, Potter, Somerset, Washington and Westmoreland Counties,
Pennsylvania.
<PAGE>
4. West Penn is a wholly owned subsidiary of Allegheny Power
System, Inc.("APS"). Monongahela Power Company and The Potomac
Edison Company are also wholly owned subsidiaries of APS.
(Monongahela Power Company, The Potomac Edison Company and West Penn
are hereinafter sometimes collectively referred to as the "APS
Companies".)
5. This Securities Certificate includes the following
proposed financings:
$35 MILLION OF SOLID WASTE DISPOSAL NOTES
(HARRISON POWER STATION)
West Penn desires to fund its ownership share of certain
solid waste handling and disposal facilities and associated land and
equipment (hereinafter referred to as the "Facilities") which are
required to comply with the Clean Air Act Amendments of 1990 (the
"CAAA") as applicable to the Harrison Power Station ("Harrison")
located in Harrison County, West Virginia through tax exempt
financing. Such financing shall be implemented through the issuance
by West Penn of a secured solid waste disposal note to support the
issuance of each series of solid waste disposal revenue bonds by the
County Commission of Harrison County, West Virginia (the
"Commission"). West Penn's undivided interest in the jointly owned
Harrison Station is 42.24%.
West Penn currently expects to finance its share of the
installation of the Facilities through a combination of sources,
including internally-generated funds, first mortgage bond and
preferred stock issues, short-term debt, the sale of its common stock
to APS, and, to the extent possible, the issuance of solid waste
disposal notes to secure the Commission's sale of tax exempt solid
<PAGE>
waste disposal revenue bonds.
To date, the West Virginia Economic Development Authority
("Authority") has allocated up to $98 million of tax exempt bonds to
finance the installation of the proposed Facilities. Pursuant to the
terms of the Authority's notice, the Commission issued and sold the
approved $98 million in Bonds on May 6, 1992, May 26, 1993 and August
10, 1994. West Penn's share of the $98 million of tax exempt
financing that was allocated by the Authority and issued and sold by
the Commission was $41.4 million.
The total amount of solid waste disposal revenue bonds (the
"Bonds") which have been registered with the Securities Exchange
Commission is $180 million through December 31, 1995 in one or more
series with maturities of not more than thirty (30) years. It is
expected that the total issue by the Commission in respect of West
Penn's interest will not exceed $76 million through December 31,
1995. Therefore, since West Penn has already issued $41.4 million in
Bonds, West Penn expects that the principal amount of additional
Bonds to be allocated by the Authority and issued by the Commission
on behalf of West Penn will not exceed $35 million through December
31, 1995.
The Bonds in respect of West Penn will be issued under a
separate trust indenture with a corporate trustee, approved by but
not affiliated with West Penn (expected to be Mellon Bank, N.A.) and
shall be sold at such times (within the time period or periods
specified by the Authority), in such principal amounts, at such
interest rates, for such prices, and with such other terms as shall
be approved by West Penn.
<PAGE>
West Penn will deliver concurrently with the issuance of each
series of Bonds its non-negotiable secured solid waste disposal note
(the "Note") corresponding to such series of Bonds in respect of
principal amount, interest rates (which may be "floating"), 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. Payments on
the Notes will be made to the trustee pursuant to the trust indenture
and applied by the trustee to pay the maturing principal and
redemption prices of and interest and other costs on the Bonds with
respect to West Penn as the same become due. West Penn also proposes
to pay any trustees' fees or other expenses incurred by the
Commission, on West Penn's behalf. The obligations of West Penn to
pay for its portion of the Facilities is several and not joint, and
the Notes delivered by West Penn are the obligations solely of West
Penn.
West Penn intends to accomplish by the proposed transactions
a permanent long-term financing of its ownership share of the
Facilities. Market conditions prevailing at the time of the offering
may warrant the issuance of the Notes and Bonds with "floating"
interest rates during all or a portion of the stated life of the
Notes and Bonds based on a specified index as well as provisions
permitting the Bondholders to require the repurchase of the Bonds at
stated intervals.
The Bonds will be in registered form and will bear interest
semi-annually at rates to be determined. The Bonds will be issued
<PAGE>
pursuant to the indenture with specific provisions to be determined
prior to issuance. The indenture will also provide that all the
proceeds of the sale of the Bonds by the Commission must be applied
to the cost of the Facilities.
$47 MILLION OF POLLUTION CONTROL REFUNDING NOTES
In 1978, West Penn issued securities described as a secured
non-negotiable pollution control note registered with the
Pennsylvania Public Utility Commission in the amount of $20 million
and of $11.5 million under Securities Certificate No. S-78064384.
Other regulatory authorities vested with authority granted to
Pleasants County (the "County") the rights to sell $31.5 million of
pollution control bonds to finance the construction of certain air
pollution facilities at the company's Pleasants Power Station. The
Bonds may be redeemed beginning August 1, 1994 at 100%.
In 1985, West Penn issued securities described as secured
non-negotiable pollution control notes registered with the
Pennsylvania Public Utility Commission in the amount of $15.4 million
under Securities Certificate No. S-845151. Other regulatory
authorities vested with authority granted to the Washington County
Industrial Development Authority (the "IDA") the rights to sell $15.4
million of pollution control bonds to finance the construction of
certain air pollution facilities at the company's Mitchell Power
Station. The bonds do not have sinking funds but may be redeemed
beginning April 1, 1995 at 102%.
In view of current and prospective market conditions,
particularly interest rates, West Penn believes that the optional
<PAGE>
redemption of the $31.5 million Series B Bonds after January 1, 1995
and of the $15.4 million Series E Bonds after April 1, 1995 will be
advantageous to its ratepayers and shareholders by reducing the
annual interest cost of its outstanding pollution control notes.
The financing plan would include the sale by the "County" or
the "IDA" as the case may be, of its tax exempt pollution control
refunding revenue bonds (the "Refunding Bonds") not to exceed a total
of $31.5 million and $15.4 million, respectively.
The Refunding Bonds in respect of West Penn will be issued
under a separate trust indenture with a corporate trustee, approved
by but not affiliated with West Penn (expected to be Mellon Bank,
N.A.) and shall be sold at such times (within the time period or
periods specified by the "County" or the "IDA" as the case may be, in
such principal amounts, at such interest rates for such prices, and
with such other terms as shall be approved by West Penn.
West Penn will deliver concurrently with the issuance of each
series of Refunding Bonds its non-negotiable secured Refunding notes
(the "Notes") corresponding to such series of Refunding Bonds in
respect of principal amount, interest rates (which may be
("floating"), and redemption provisions (which may include a special
right of the holder to require the redemption or repurchase of the
Refunding Bonds at stated intervals) and having installments of
principal corresponding to any mandatory sinking fund payments and
stated maturities. Payments on the Notes will be made to the
trustees pursuant to the trust indentures and applied by the trustees
to pay the maturing principal and redemption prices of and interest
and other costs on the Refunding Bonds with respect to West Penn as
<PAGE>
the same become due. West Penn also proposes to pay any trustees'
fees or other expenses incurred by the "County" or the "IDA" as the
case may be, on West Penn's behalf. The obligations of West Penn to
pay the Refunding Notes are several and not joint, and the Notes
delivered by West Penn are the obligations solely of West Penn.
6. West Penn will deliver concurrently with the issuance of
each series of Bonds its non-negotiable secured Notes corresponding
to such series of Bonds. Payments on such Notes will be made to the
Trustees under the trust indentures described above and applied by
the Trustees to pay the maturing principal and redemption prices of
and interest and other costs on the Bonds as the same become due.
7. The purpose for which West Penn proposes to issue the
Notes are:
To provide an economic source of financing by the County
Commission of Harrison County for non-revenue producing solid waste
disposal equipment which is required at Harrison Station to comply
with Phase I of the CAAA.
To provide for the optional redemption of the Pleasants
County and Washington County non-revenue producing pollution control
bonds.
West Penn has been advised that the annual interest rate
on tax exempt bonds has been 1% to 3% lower than the interest rate on
taxable obligations of comparable quality, depending upon the type to
be sold.
8. West Penn has filed an application, Form U-1, with the
Federal Securities and Exchange Commission with respect to the
proposed Harrison transactions under the Public Utility Company Act
<PAGE>
of 1935, and will be filing Form U-1 with regard to the Pleasants and
Washington refundings.
9. There are appended hereto and made a part hereof the
following exhibits:
A. Balance Sheet of West Penn at September 30, 1994.
B. Statements of Income and Retained Earnings of West Penn
for twelve months ended September 30, 1994.
C. Statement with respect to utility plant accounts of West
Penn as of September 30, 1994.
D. Statement of securities of other corporations owned by
West Penn as of September 30, 1994.
E. Statement showing the status of funded debt of West Penn
outstanding as of September 30, 1994.
F. Statement showing the status of the outstanding capital
stock of West Penn as of September 30, 1994.
G. None. No Registration Statement has been or will be
filed with the Securities and Exchange Commission under
the Securities Act of 1933 in respect of the proposed
transactions.
H. Copy of Application, Form U-1, for Harrison filed with
the Securities and Exchange Commission pursuant to the
Public Utility Holding Company Act of 1935. (Pleasants
and Washington to be filed by amendment.)
I. Copy of resolution of the Board of Directors of West Penn
authorizing the proposed transactions. (To be supplied
by amendment.)
J. Copy of Forms of Note. (To be supplied by amendment.)
<PAGE>
K. Statement showing, in journal entry form, all charges or
credits proposed to be made on the books of account of
West Penn as a result of the proposed issuance of the
notes, covered by this Securities Certificate.
L. Proposed form of Financing Agreements. (To be filed by
amendment).
M. Mortgage and Security Agreements. (To be filed by
amendment).
WHEREFORE, West Penn Power Company requests that the
Pennsylvania Public Utility Commission register this Securities
Certificate pursuant to Chapter 19 of the Public Utility Code.
Respectfully submitted,
WEST PENN POWER COMPANY
/s/ K. D. MOWL
K. D. Mowl, Secretary/Treasurer
November 16, 1994
<PAGE>
A F F I D A V I T
COMMONWEALTH OF PENNSYLVANIA )
:
COUNTY OF WESTMORELAND )
K. D. MOWL, being duly sworn according to law, deposes
and says that he is Secretary/Treasurer of WEST PENN POWER COMPANY;
that he is authorized to and does make this affidavit for it; and
that the facts set forth above are true and correct to the best of
his knowledge, information and belief, and he expects the said WEST
PENN POWER COMPANY to be able to prove the same at the hearing
hereof.
/s/ K. D. MOWL
(Signature of affiant)
Sworn to and subscribed before me
this 16th day of November, 1994.
/s/ KATHRYN L. HIBBERT
Notary Public
(SEAL)
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A
WEST PENN POWER COMPANY
BALANCE SHEET
SEPTEMBER 30, 1994
Assets and Other Debits
Utility Plant
Electric plant
<S> <C>
In service $2,198,328,931
Plant purchased -
Held for future use 77,575,715
Completed construction not classified 277,886,940
Construction work in progress 367,140,467
Acquisition adjustment 140,054
Accumulated provision for depreciation of electric
plant-in-service (992,972,078)
Accumulated provision for amortization (2,514,081)
Total utility plant $1,925,585,948
Other Property and Investments
Nonutility property $ 3,295,769
Accumulated provision for depreciation of
nonutility property (386,308)
Investment in associated companies 101,411,870
Investment in subsidiary companies 2,526,580
Other investments 82,685
Special funds 195,842
Total other property and investments $ 107,126,438
Current and Accrued Assets
Cash $ -
Special deposits 103,712
Working funds 313,303
Temporary cash investments -
Customer accounts receivable 82,533,648
Other accounts receivable 6,228,716
Accumulated provision for uncollectible accounts (2,519,509)
Notes receivable from affiliated companies 6,500,000
Receivables from affiliated companies 10,958,252
Fuel stock 37,923,311
Plant materials and operating supplies 38,450,833
Allowance inventory 50,597
Stores expense undistributed 537,354
Prepayments 8,809,340
Interest, dividends, and rents receivable 19,860
Accrued utility revenues 1,651,200
Miscellaneous current and accrued assets 13,351,773
Total current and accrued assets $ 204,912,390
Deferred Debits
Unamortized debt expense $ 3,304,811
Regulatory assets 343,864,180
Preliminary survey charges 17,133,472
Clearing account 1,564,427
Temporary facilities (46,492)
Unamortized loss on reacquired debt 10,781,710
Miscellaneous deferred debits 2,348,518
Total deferred debits $ 378,950,626
Total assets & other debits $2,616,575,402
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A
(continued)
WEST PENN POWER COMPANY
BALANCE SHEET
SEPTEMBER 30, 1994
Liabilities and other Credits
Proprietary Capital
<S> <C>
Common capital stock $ 425,994,104
Preferred capital stock 149,707,700
Premium and discount,
net on capital stock - preferred 835,197
Reduction in par or stated value of capital stock
(No change during twelve months
ended September 30, 1994) 431,948
Miscellaneous paid-in capital 54,420,304
Appropriated retained earnings 414,777
Unappropriated retained earnings 420,625,429
Total proprietary capital $1,052,429,459
Long-term Debt
First mortgage bonds $ 654,000,000
Other long-term obligations 216,985,000
Unamortized premium on debt 6,090
Unamortized discount on debt (7,689,374)
Total long-term debt $ 863,301,716
Current and Accrued Liabilities
Notes payable $ -
Accounts payable 88,937,041
Notes payable to affiliated companies -
Payable to affiliated companies 5,226,934
Customer deposits 1,342,177
Taxes accrued 28,435,357
Interest accrued 14,338,003
Tax collections payable 1,587,568
Miscellaneous current and accrued liabilities 25,101,760
Total current and accrued liabilities $ 164,968,840
Deferred Credits
Customer advances for construction - electric $ 2,991,122
Other deferred credits 453,801
Regulatory liabilities 41,597,308
Accumulated deferred investment tax credit 53,583,393
Total deferred credits $ 98,625,624
Obligations under capital leases $ 2,631,608
Miscellaneous reserves 8,645,612
Accumulated deferred income tax 425,972,543
Total liabilities and other credits $2,616,575,402
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT B
WEST PENN POWER COMPANY
STATEMENT OF INCOME
TWELVE MONTHS ENDED SEPTEMBER 30, 1994
Utility Operation Income
<S> <C>
Operating revenues $1,140,943,183
Operating expenses:
Operating expense $ 652,552,984
Maintenance expense 107,259,664
Deferred power costs 456,948
Depreciation expense 86,898,346
Taxes other than income taxes 88,304,560
Federal income tax 51,635,039
State income tax 17,106,245
Income taxes deferred (9,860,008)
Investment credit amortization (2,588,500)
Amortization of deferred income taxes (799,815)
Total operating expenses $ 990,965,463
Operating income $ 149,977,720
Other Income and Deductions
Other income and deductions, net $ 11,828,617
Allowance for other funds
used during construction 6,056,524
Total other income and deductions $ 17,885,141
Gross income $ 167,862,861
Interest Charges
Interest on first mortgage bonds $ 44,075,122
Interest on other long-term obligations 12,600,464
Amortization of debt discount and expense 1,843,089
Amortization of premium on debt - (credit) (5,288)
Interest on debt to affiliates 23,960
Other interest expense 360,234
Allowance for borrowed funds
used during construction (3,373,642)
Total interest charges $ 55,523,939
Net income $ 112,338,922
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT B
(continued)
WEST PENN POWER COMPANY
STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED SEPTEMBER 30, 1994
<S> <C>
Balance at October 1, 1993 $407,170,321
Add:
Net Income 112,338,922
Total $519,509,243
Deduct:
Dividend appropriations
4-1/2% Preferred $ 1,336,856
4.20% Preferred, Series B 210,000
4.10% Preferred, Series C 205,001
$7.00 Preferred, Series D 700,000
$7.12 Preferred, Series E 712,000
$8.08 Preferred, Series G 808,000
$7.60 Preferred, Series H 760,000
$7.64 Preferred, Series I 764,000
$8.20 Preferred, Series J 1,640,000
Market Auction 1,215,988
Common 90,117,192
Total $ 98,469,037
Balance at September 30, 1994 $421,040,206
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT C
WEST PENN POWER COMPANY
STATEMENT WITH RESPECT TO UTILITY PLANT ACCOUNTS
SEPTEMBER 30, 1994
Balance
August 31, 1993
(per statements
filed on
November 5, 1993)
Certificate No.
S930394
S930395
Account S930396
Number Utility S930397 Additions Retirements
101 Electric plant
<S> <C> <C> <C>
in service $2,143,170,244 $ 84,382,275 $(28,032,499)
102 Plant purchased 351,000 (351,000) -
105 Held for future
use 78,625,730 (242,872) (1,469,853)
106 Completed construction
not classified 224,700,039 53,186,901 -
107 Construction work
in progress 258,349,867 108,790,600 -
114 Acquisition
adjustment 179,163 - -
Total utility plant $2,705,376,043 $245,765,904 $(29,502,352)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT C
(continued)
WEST PENN POWER COMPANY
STATEMENT WITH RESPECT TO UTILITY PLANT ACCOUNTS
SEPTEMBER 30, 1994
Account Balance
Number Utility Adjustments September 30, 1994
101 Electric plant
<S> <C> <C>
in service $(1,191,089) $2,198,328,931
102 Plant purchased - -
105 Held for future
use 662,710 77,575,715
106 Completed construction
not classified - 277,886,940
107 Construction work
in progress - 367,140,467
114 Acquisition
adjustment (39,109) 140,054
Total utility plant $ (567,488) $2,921,072,107
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT D
WEST PENN POWER COMPANY
SECURITIES OF OTHER CORPORATIONS OWNED
SEPTEMBER 30, 1994
Name of Title of Amount Date
Issuer Security Owned Acquired Price Paid Book Value
Allegheny
Pittsburgh Capital 5,000
<S> <C> <C> <C> <C> <C>
Coal Company Stock Shares 1918 $ 250 $ 83,221 (A)
West Virginia
Power and
Transmission Capital 30,000
Company Stock Shares 1926 4,500,000 $ 2,526,580(A)
Allegheny
Generating Capital 450
Company Stock Shares 1982 33,750,000(B) $100,273,549(A)
1983 4,500,000(B)
1984 4,500,000(B)
1985 51,750,000(B)
</TABLE>
(A) Market values are not applicable, as West Penn Power Company owns
100% of the capital stock of West Virginia Power and Transmission
Company, 50% of Allegheny Pittsburgh Coal Company, the remaining 50%
of whose stock is owned by Monongahela Power Company and The Potomac
Edison Company, associated companies, and 45% of Allegheny
Generating Company, the remaining 55% of whose stock is owned by
Monongahela Power Company and The Potomac Edison Company, associated
companies.
(B) Represents capital contributions.
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT E
WEST PENN POWER COMPANY
STATUS OF FUNDED DEBT OUTSTANDING
SEPTEMBER 30, 1994
Total
Dates Principal
Description Interest Term Date of Amount
of Obligation Rate Payable (Years) Maturity Authorized
(a) (b) (c) (d) (e) (f)
First Mortgage Bonds
<S> <C> <C> <C> <C> <C>
Series U 4-7/8 JD-1 30 12-1-1995 *
Series EE 9 JD-1 30 6-1-2019 *
Series FF 8-7/8 FA-1 30 2-1-2021 *
Series GG 7-7/8 JD-1 13 12-1-2004 *
Series HH 7-3/8 FA-1 15 8-1-2007 *
Series II 7-7/8 MS-1 30 9-1-2022 *
Series JJ 5-1/2 JD-1 5 6-1-1998 *
Series KK 6-3/8 JD-1 10 6-1-2003 *
Series LL 8-1/8 FA-1 30 8-1-2024 *
* The amount of bonds authorized is unlimited except that additional
bonds may be issued only under terms of the Indenture. Additional
amounts of any series may be issued.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT E
(continued)
WEST PENN POWER COMPANY
STATUS OF FUNDED DEBT OUTSTANDING
SEPTEMBER 30, 1994
Total Principal Amount
Held by the
Public Utility
Total Principal In
Amount Out- Reacquired Sinking
standing (Not and or
Description Held by the Held in Other
of Obligation Public Utility) Treasury Pledged Funds
(a) (g) (h) (i) (j)
First Mortgage Bonds
<S> <C> <C> <C> <C>
Series U $ 27,000,000 None None None
Series EE 30,000,000 None None None
Series FF 100,000,000 None None None
Series GG 70,000,000 None None None
Series HH 45,000,000 None None None
Series II 135,000,000 None None None
Series JJ 102,000,000 None None None
Series KK 80,000,000 None None None
Series LL 65,000,000 None None None
$654,000,000
*The amount of bonds authorized is unlimited except that additional
bonds may be issued only under terms of the Indenture. Additional
amounts of any series may be issued.
</TABLE>
<PAGE>
ELECTRIC UTILITY
1. What is the specific purpose of the issuance?
The purpose for which West Penn proposes to issue the Notes is
(1) to provide an economic source of financing for non-revenue
producing solid waste disposal equipment which is required at
Harrison Station to comply with phase 1 of the CAAA. (2)
provide an economic source of financing for issuance of $31.5
million Pleasants County pollution control refunding notes.
(3) provide an economic source of financing for issuance of
$15.4 million Washington County pollution control refunding
notes.
2. If the issuance will be utilized to finance future construction
needs, how were those needs determined?
The issuances will be utilized solely to finance construction
of solid waste disposal facilities at Harrison Station, to
issue pollution control refunding notes at Pleasants and
Mitchell Stations or to pay outstanding short-term debt used
for those purposes.
3. What are the forecasted customer and load growths as well as
projected reserve margins, for the Company?
See attached Exhibit I.
4. For each major project to be financed:
a. When was the project initiated?
b. When will the project be completed?
c. What is the estimated final cost?
d. What will be the estimated amount of AFUDC charged to the
project?
The construction of the solid waste disposal facilities is
<PAGE>
part of the flue-gas desulfurization system at Harrison
necessary to comply with the 1990 CAAA initiated in 1991.
The solid waste disposal facilities are scheduled for
completion in the latter part of 1994 at a cost not to
exceed $180 million.
The estimated amount of AFUDC that will be charged to the
solid waste disposal facilities upon their completion
cannot be determined prior to West Penn's receiving rate
orders of the Pennsylvania Public Utilities Commission
deciding the timing and allowance of the Facilities'
Construction Work in Progress in rate base which will
impact the amount of AFUDC charged to these facilities.
5. How does the cost of the securities compare with the costs of
similar securities currently being issued within the industry?
The answer to the question cannot be determined until the
transactions are completed.
6. How does the cost of this type of security compare with other
types of securities currently being issued within the industry?
Generally speaking, the annual interest rate on tax-exempt
bonds has been lower by approximately one to three full
percentage points than the interest rate on taxable obligations
of comparable quality, depending upon the type to be sold.
7. What restrictive conditions are included in the agreements?
The bonds will be issued pursuant to trust indentures and shall
be sold in one or more series, at such times, in such principal
amounts at such interest rates, with such maturities, for such
prices, and with such other terms as shall be determined and
approved by West Penn. The indentures will also provide that
substantially all the proceeds of the sale of the bonds must be
<PAGE>
applied to the cost of the Facilities with respect to Harrison
and to the costs of the refunding with respect to Pleasants and
Washington.
8. What effects will these issuances have upon the capital
structure of the Company?
Please see attached Exhibit II.
9. What are the projected financing needs for the next five years?
Please see attached Exhibit III.
10. How does the Company plan to meet its projected future
financing needs?
Please see attached Exhibit III.
11. What is the amount of debt which will fall due in each of the
future five-year periods?
Please see attached Exhibit IV.
12. How does the Company anticipate meeting each of the obligations
as they fall due?
The long-term obligations will be met as they fall due through
internal cash generation or with short-term borrowings which
will eventually be retired either by internal cash generation
or by issuance from time to time of first mortgage bonds,
preferred stock, common stock and such other securities as this
Commission and other regulatory bodies having jurisdiction may
authorize.
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT K - 3
WEST PENN POWER COMPANY
PRO FORMA JOURNAL ENTRIES
Debit Credit
1A.
<S> <C> <C>
Cash - a/c 131 $
81,900,000
Unamortized Debt discount
and Expense - a/c 181 $
Pollution Cntl Rev Bonds - a/c 224 $81,900,00
(Solid Waste Disposal Notes)
To reflect the issuance, for cash, of $81,900,000 principal amount
of Pollution Control Revenue Bonds or Solid Waste Disposal Notes.
Interest rate and price have been estimated for purpose of this
entry.
The entry also reflects the payment of any expense of issuance of
the Bonds.
1B.
Amortization of Debt Discount
and Expense - a/c 428 $
Unamortized Debt Discount
and Expense - a/c 181 $
To amortize any expense of issuance of the Bonds over the life
of the Bonds.
1C.
Pollution Cntl Rev Bonds,
Pleasants Series "B" - a/c 224 $31,500,000
Pollution Cntl Rev Bonds,
Mitchell Series "E" - a/c 224 15,400,000
Cash - a/c 131 $46,900,000
</TABLE>
<PAGE>
EXHIBIT I
WEST PENN POWER COMPANY
FORECAST OF TOTAL REGULAR CUSTOMERS
AT YEAR END
1994 652973
1995 659013
1996 664469
1997 672462
1998 680466
1999 688540
2000 696727
2001 704616
2002 711753
2003 718915
2004 727246
2005 736116
2006 745030
2007 753862
2008 762562
2009 770608
From 1994 Forecast of Peaks and Net Power Supply (LF9408)
<PAGE>
EXHIBIT I cont'd.
PLEASE REFER TO:
West Penn Power Company Annual Resource Planning Report
Filing for 1994 filed on April 29, 1994 by John L. Munsch, Attorney
West Penn Power Company.
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT II
WEST PENN POWER COMPANY
ACTUAL CAPITALIZATION AT SEPTEMBER 30, 1994
ADJUSTED TO REFLECT
PROPOSED ISSUANCE OF $81.9 MILLION TAX EXEMPT BONDS
Amount Ratio
Debt
<S> <C> <C>
First Mortgage Bonds $ 654,000,000
Mature First Mortgage Bonds, Series U (27,000,000)
Hatfield Pollution Cntl Rev Bonds, Series "A" 14,435,000
Pleasants Pollution Cntl Rev Bonds, Series "A" 45,000,000
Pleasants Pollution Cntl Rev Bonds, Series "B" 31,500,000
Fort Martin Pollution Cntl Rev Bonds, Series "B" 7,750,000
Mitchell Pollution Cntl Rev Bonds, Series "E" 15,400,000
Mitchell Pollution Cntl Rev Bonds, Series "F" 61,500,000
Harrison Solid Waste Disposal Notes, Series "A" 8,450,000
Harrison Solid Waste Disposal Notes, Series "B" 18,040,000
Harrison Solid Waste Disposal Notes, Series "C" 14,910,000
Issue Harrison Solid Waste Disposal Notes 35,000,000
Issue Pollution Control Revenue Bonds 46,900,000
Redeem Pleasants Pollution Control
Revenue Bonds, Series "B" (31,500,000)
Redeem Mithell Pollution Control
Revenue Bonds, Series "E" (15,400,000)
Unamortized Premium on Debt 6,090
Unamortized Discount on Debt (7,689,374)
$871,301,716 45.29%
Preferred Stock
Cumulative Preferred Stock $ 149,707,700 7.78%
Common Equity
Common Stock $ 425,994,104
Other Paid-in-Capital 55,687,449
Retained Earnings 421,040,206
$ 902,721,759 46.93%
Total Capitalization $1,923,731,175 100.00%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT III
Page 1 of 3
FIVE-YEAR FORECAST 1995-1999*
CONSTRUCTION, INTERNAL GENERATION & EXTERNAL FINANCING REQUIRED
($ MILLIONS)
1995 1996
<S> <C> <C>
Gross Construction Expenditures(1) 219.6 152.7
Less: AFUDC 5.1 3.3
Net Construction Expenditures 214.5 149.4
Maturing Long-Term Debt and Preferred Stock 27.0 ---
Working Capital Adjustments --- ---
Total Cash Requirements 241.5 149.4
Less: Internal Cash Generation 141.0 128.5
100.5 20.9
Repay Short-Term Debt 2.8 63.3
Temporary Investment Maturities --- ---
Total External Financing Required 103.3 84.2
Tentative Financing Plans
Other Unsecured
Long-Term Debt 40.0 ---
(2) Pollution Control Debt --- ---
Preferred Stock --- ---
Common Stock --- ---
Short-Term Debt 63.3 84.2
Temporary Investments --- ---
Total 103.3 84.2
</TABLE>
*Preliminary and subject to substantial change.
(1) West Penn Power Company has not committed to add new utility-owned
generation within the five-year forecast period.
(2) In 1995, to the extent possible, the Company will issue up to $35
million of tax-exempt solid waste disposal notes to finance, in part,
the installation of a flue-gas desulfurization system at Harrison Power
Station.
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT III (cont'd)
Page 2 of 3
FIVE-YEAR FORECAST 1995-1999*
CONSTRUCTION, INTERNAL GENERATION & EXTERNAL FINANCING REQUIRED
($ MILLIONS)
1997 1998
<S> <C> <C>
Gross Construction Expenditures(1) 156.0 149.5
Less: AFUDC 2.5 2.6
Net Construction Expenditures 153.5 146.9
Maturing Long-Term Debt and Preferred Stock --- 102.0
Working Capital Adjustments --- ---
Total Cash Requirements 153.5 248.9
Less: Internal Cash Generation 132.2 129.0
21.3 119.9
Repay Short-Term Debt 84.2 65.5
Temporary Investment Maturities --- ---
Total External Financing Required 105.5 185.4
Tentative Financing Plans
First Mortgage Bonds 40.0 100.0
Pollution Control Debt --- ---
Preferred Stock --- 45.0
Common Stock --- ---
Short-Term Debt 65.5 40.4
Temporary Investments --- ---
Total 105.5 185.4
*Preliminary and subject to substantial change.
(1) West Penn Power Company has not committed to add new utility-owned
generation within the five-year forecast period.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT III (cont'd)
Page 3 of 3
FIVE-YEAR FORECAST 1995-1999*
CONSTRUCTION, INTERNAL GENERATION & EXTERNAL FINANCING REQUIRED
($ MILLIONS)
1999
<S> <C>
Gross Construction Expenditures(1) 192.2
Less: AFUDC 2.9
Net Construction Expenditures 189.3
Maturing Long-Term Debt and Preferred Stock ---
Working Capital Adjustments ---
Total Cash Requirements 189.3
Less: Internal Cash Generation 141.8
47.5
Repay Short-Term Debt 40.4
Temporary Investment Maturities ---
Total External Financing Required 87.9
Tentative Financing Plans
First Mortgage Bonds ---
Pollution Control Debt ---
Preferred Stock ---
Common Stock ---
Short-Term Debt 87.9
Temporary Investments ---
Total 87.9
*Preliminary and subject to substantial change.
(1) West Penn Power Company has not committed to add new utility-owned
generation within the five-year forecast period.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT IV
WEST PENN POWER COMPANY
MATURITIES OF BONDS AND OTHER LONG-TERM OBLIGATIONS
1995-1999
(000'S)
1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C>
First Mortgage Bonds $27,000 $ - $ - $102,000 $ -
Other Long-Term
Obligations $ - $ - $ - $ 1,500 $ 2,500
Total Maturities $27,000 $ - $ - $103,500 $ 2,500
</TABLE>
PENNSYLVANIA
PUBLIC UTILITY COMMISSION
Harrisburg, PA 17105-3265
Public Meeting held December 15, 1994
Commissioners Present:
David W. Rolka, Chairman
Joseph Rhodes, Jr., Vice-Chairman
John M. Quain
Lisa Crutchfield
John Hanger
Securities Certificate of West Penn S-940473
Power Company for the issuance of up
to $35 million of solid waste disposal
notes and $47 million of pollution
control refunding notes.
OPINION AND ORDER
BY THE COMMISSION:
On November 16, 1994, West Penn Power Company
(West Penn) filed for registration pursuant to Chapter 19 of
the Public Utility Code, 66 Pa. C.S. Subsection 1901, et
seq., a Securities Certificate for the issuance of up to $35
million of solid waste disposal notes and up to $47 million
of pollution control refunding notes.
West Penn proposes the issuance of secured solid
waste disposal revenue notes in support of solid waste
disposal revenue bonds to be issued by the County Commission
of Harrison County, West Virginia (the County). The
proposed issuance is intended to fund, through permanent
long-term tax exempt financing, in compliance with the Clean
Air Act Amendments of 1990, improvements to solid waste
handling and disposal facilities at Harrison Power Station
of which West Penn is a 42.24% owner.
West Penn has, to date, issued $41.4 million in
bonds in connection with funding the project. Since West
Penn's total obligation with respect to its ownership of the
Harrison Power Station is not expected to exceed $76 million
through December 31, 1995, current funding requirements
should not exceed $35 million through December 31, 1995.
The county revenue bonds, bearing interest semi-
annually at rates not yet determined, will be issued under
an indenture which provides that all of the proceeds must be
applied to the cost of funding the solid waste handling and
disposal facilities and associated land and equipment. With
the issuance of each series of bonds by the County, West
Penn will issue a non-negotiable note with terms
corresponding to the terms of the bond issuance.
Concurrently, West Penn proposes the issuance of
non-negotiable pollution control refunding notes not to
exceed $47 million, the proceeds of which will be used to
<PAGE>
refund three pollution control notes totaling $46.9 million.
The notes to be refunded were issued pursuant to Securities
Certificates Docketed at S-4384 and S-845151 and were issued
in support of pollution control bonds issued by Pleasants
County (Pleasants) and the Washington County Industrial
Development Authority (IDA). The purpose of the issuance
was to fund construction of certain air pollution facilities
at the Pleasants and Mitchell Power Stations.
Included with the proposed West Penn issuance will
be the corresponding sale of tax-exempt pollution control
refunding revenue bonds by Pleasants and IDA not to exceed
$31.5 million and 15.4 million, respectively. The refunding
bonds will be issued under a trust indenture at terms to be
approved by West Penn.
Filed concurrently with the instant Securities
Certificate, were West Penn Securities Certificates Docketed
at S-940474 and S-940475 which propose the issuance of first
mortgage bonds and cumulative preferred stock. Our
examination of the instant Securities Certificate filing
encompassed the overall financial implications for the
utility as a result of the simultaneous registration of all
three Securities Certificates.
We have concluded that the proposed issuance of up
to $35 millon of solid waste disposal notes and $47 million
of pollution control refunding notes appears to be necessary
or proper for the present and probable future capital needs
of the utility and that the Securities Certificate should be
registered; THEREFORE,
IT IS ORDERED:
1. That the Securities Certificate of West Penn
Power Company for the issuance of up to $35 million of solid
waste disposal notes and up to $47 million of pollution
control refunding notes is hereby registered.
2. That within 60 days of the completion of the
issuances as authorized in Ordering Paragraph No. 1 above,
West Penn Power Company file with this Commission a
Statement outlining the final terms of the issuances.
BY THE COMMISSION
/s/ JOHN G. ALFORD
John G. Alford
Secretary
(SEAL)
ORDER ADOPTED: December 15, 1994
ORDER ENTERED: December 15, 1994
