File No. 70-8613
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE
AMENDMENT NO. 2
TO
APPLICATION OR DECLARATION
ON
FORM U-1
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Monongahela Power Company
1310 Fairmont Avenue
Fairmont, WV 26554
The Potomac Edison Company
10435 Downsville Pike
Hagerstown, MD 21740-1766
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. Applicants hereby amend Item 6. Exhibits and Financial Statements by filing
the following:
(a) Exhibits
B-1 Form of Indenture (See Exhibit 4(a) to The Potomac Edison
Company's Registration Statement File No. 33-59493).
B-2 Form of Underwriting Agreement (See Exhibit 1 in The
Potomac Edison Company's Registration Statement File No.
33-59493).
D-5 Order of the Maryland Public Service Commission
regarding Potomac Edison's Application.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company
Act of 1935, the undersigned companies have duly caused this statement to be
signed on their behalf by the undersigned thereunto duly authorized.
MONONGAHELA POWER COMPANY
By NANCY H. GORMLEY
Nancy H. Gormley
Vice President
THE POTOMAC EDISON COMPANY
By NANCY H. GORMLEY
Nancy H. Gormley
Counsel
WEST PENN POWER COMPANY
By NANCY H. GORMLEY
Nancy H. Gormley
Counsel
Dated: June 21, 1995
U:\DUMP\QUIDS\POSTEFF2
STATE OF MARYLAND
PUBLIC SERVICE COMMISSION
ORDER NO. 72035
IN THE MATTER OF THE APPLICATION OF BEFORE THE
THE POTOMAC EDISON COMPANY FOR PUBLIC SERVICE COMMISSION
AUTHORITY TO ISSUE UP TO $61,834,900 OF OF MARYLAND
JUNIOR SUBORDINATED DEBENTURES
CASE NO. 8699
On May 8, 1995, The Potomac Edison Company ("PE" or "Company") filed
an application with the Commission for authority to issue at any time
prior to December 31, 1998 not more than $61,834,900 of junior
subordinated debentures. The Company proposes to use the proceeds of
these issuances to redeem certain issues of its outstanding preferred
stock. The interest rate on this debt may be fixed or adjustable and will
reflect market conditions at the time of each issuance. The term of each
issuance will not exceed 50 years.
PE expects the interest rate on this debt to exceed the dividend
rate of its preferred stock. The Company notes, however, that "the
expected tax deductibility of interest payments will afford increased cash
flow and net income and result in a lower net interest cost" and yield
"significant savings, on a net present value basis" over the life of the
securities. The Company also expects that both financial markets and
rating agencies will treat these issuances "as having equity
characteristics similar to traditional perpetual preferred stock."
In a memorandum dated June 15, 1995, Staff filed its comments
concerning this matter with the Commission. Staff suggests that the
proposed issuances will permit the Company to reduce the cost of its
outstanding preferred stock. Staff also suggests that the replacement of
preferred stock with debt will not affect the Company's capital structure
significantly. Accordingly, Staff recommends that the Commission approve
PE's application.
<PAGE>
STATE OF MARYLAND
PUBLIC SERVICE COMMISSION
Section 65(a) of The Public Service Commission Law(1) provides:
The Commission shall authorize the issuance by
any public service company of stocks, bonds,
securities, notes, or other evidences of
indebtedness... if, and only if, it finds that
such issuance is reasonably required for (i) the
acquisition by the issuing company of property,
or (ii) the construction, completion, extension
or improvement of its facilities, or (iii) the
discharge or lawful refunding of its obligations,
or (iv) the maintenance or improvement of
service, or (v) the reimbursement of moneys...
expended for any of the purposes enumerated in
items (i) through (iii) of this subsection,
within five years next prior to the filing of an
application with the Commission for such
reimbursement...
After considering this matter at the June 21, 1995 Administrative
Meeting, the Commission concludes that PE's application for authority to
issue up to $61,834,900 of junior subordinated debentures should be
granted. The record indicates that the proceeds of these issuances will
be used for the lawful refunding of PE's obligations. Accordingly, the
Commission finds that the issuances are reasonably required for one or
more of the purposes enumerated in subsection (a) of Section 65 of The
Public Service Commission Law. The Commission notes, however, that this
decision is not equivalent to an endorsement of any particular capital
structure for ratemaking purposes.
IT IS, THEREFORE, this 21st day of June in the year Nineteen Hundred
and Ninety-five, by the Public Service Commission of Maryland,
ORDERED: (1) That The Potomac Edison Company is authorized to
issue at any time prior to December 31, 1998 not more than $61,834,900 of
junior subordinated debentures.
(1) Md. Ann. Code, art 78, Sections 1-107 (1991 Rpl. Vol.)
<PAGE>
(2) That The Potomac Edison Company shall carry out the associated
transactions in the manner described in the application filed on May 8,
1995.
STATE OF MARYLAND
PUBLIC SERVICE COMMISSION
(3) That The Potomac Edison Company shall use the proceeds of these
issuances for the purposes described in its application.
By Direction of the Commission,
DANIEL P. GAHAGAN
Daniel P. Gahagan
Executive Secretary
