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File No. 70-9483
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM U-1
APPLICATION OR DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Allegheny Energy, Inc. West Penn Power Company
10435 Downsville Pike 800 Cabin Hill Drive
Hagerstown, Maryland 21740 Greensburg, Pennsylvania 15601
AYP Energy, Inc.
10435 Downsville Pike
Hagerstown, Maryland 21740
(Name of companies filing this statement
and addresses of principal executive offices)
_____________________
Allegheny Energy, Inc.
(Name of top registered holding company parent of applicants)
Thomas K. Henderson
Vice President
Allegheny Energy, Inc.
10435 Downsville Pike
Hagerstown, Maryland 21740
(Name and address of agent for service)
The Commission is requested to send copies of all notices, orders
and communications in connection with this Application-
Declaration to:
Thomas K. Henderson
Vice President
Allegheny Energy, Inc
10435 Downsville Pike
Hagerstown, Maryland 21740-1766
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1. Applicants hereby amend Item No. 1. Description of Proposed
Transaction by adding subsection w. to the end of Section C.
Overview of Requested Approvals, as follows:
"and w. that the Commission authorize GENCO, directly or
indirectly through intermediate subsidiaries, to acquire
securities or interests in the business of one or more
exempt wholesale generators (EWGs) located within the
United States or outside the United States, and foreign
utility companies (FUCOs), as defined in the Public
Utility Holding Company Act of 1935 ("the Act").
2. Applicants hereby amend Item No. 1. Description of Proposed
Transaction by adding subsection (6) to the end of the first
paragraph under Section G. Formation of GENCO, Transfer of
Generating Assets from Energy Subsidiary to GENCO and Acquisition of
Generating Assets by GENCO, as follows:
"; and (6) to acquire interests in, to finance the
acquisition of and to hold the securities of one or more
EWGs and FUCOs, as those terms are defined in the Act,
either directly or indirectly, through project entities
("Intermediate Companies")."
3. Applicants hereby further amend Item No. 1. Description of
Proposed Transaction by adding subsection "5. Formation of EWG and
FUCO Subsidiaries of GENCO" to the end of Section G. Formation of
GENCO, Transfer of Generating Assets from Energy Subsidiary to GENCO
and Acquisition of Generating Assets by GENCO, as follows:
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5. Formation of EWG and FUCO Subsidiaries of GENCO
GENCO proposes to acquire securities or interests in the
business of one or more EWGs and FUCOs, as those terms are
defined in the Act (the "Exempt Subsidiaries"), either directly
or indirectly, through Intermediate Companies.
A. Use of Intermediate Companies
Intermediate Companies would be special purpose subsidiaries formed
to exclusively engage in activities to facilitate the consummation
of investments in EWGs and FUCOs. They may also engage in
development activities. Intermediate Companies may acquire
interests in, finance the acquisition of and hold the securities of
EWGs and FUCOs. Intermediate Companies would enhance the ability of
GENCO to respond quickly to investment opportunities. It has been
the particular experience of companies investing in FUCOs that the
use of Intermediate Companies is often necessitated by business
concerns such as foreign ownership requirements in countries where
FUCOs are located, the need to facilitate investments via a
consortium of companies where each member thereof has a consolidated
subsidiary involved in the final FUCO structure for tax and
accounting purposes, or to ease subsequent adjustments to or sales
of interests among members of the ownership group. An Intermediate
Company may be organized at the time of the making of bids or
proposals to acquire an interest in any EWG or FUCO or at any time
thereafter in order to facilitate the bidding and subsequent
consummation of an acquisition of an interest in an EWG or FUCO.
AE and GENCO also propose that an Intermediate Company may
issue equity securities and debt securities to persons other than
GENCO or AE (and with respect to which there will be no recourse to
AE), including banks, insurance
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companies and other financial
institutions, exclusively for the purpose of financing (including
any refinancing) investments in EWGs and FUCOs.
B. Investment in Intermediate Companies and Exempt Subsidiaries
The Intermediate Companies may issue securities to AE
and/or GENCO, and AE and/or GENCO may acquire the securities. The
investment by AE or GENCO in the Exempt Subsidiaries may take the
form of capital stock or shares, debt securities, trust
certificates, capital contributions, open account advances and
partnership interests or other equity or participation interests,
bid bonds or other credit support to secure obligations incurred by
GENCO and/or Intermediate Companies in connection with Exempt
Subsidiary investments or of GENCO's undertaking to contribute
equity to an Intermediate Company. AE and GENCO propose to use up
to $900 million, from time to time through December 31, 2007, to (1)
guarantee the indebtedness or other obligations of one or more
Exempt Subsidiaries; (2) assume the liabilities of one or more
Exempt Subsidiaries; and/or (3) enter into guarantees and letters of
credit reimbursement agreements in support of equity contribution
obligations or otherwise in connection with project development
activities for one or more Exempt Subsidiaries. Guarantees and
Credit Support are also described under Section K Financing
Authority, subsection 1. Guarantee Authority in this U-1. The
maximum aggregate limit on all credit support by AE and GENCO, will
be $900 million at any one time outstanding. The $900 million in
guarantees and other credit support is in addition to the $500
million authority requested elsewhere herein.
Investments may be made from AE to GENCO and/or
Intermediate Companies directly or indirectly. Any open account
advance made by AE will be non-interest bearing and shall have a
maturity of not more than one year.
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AE requests approval to enter into reimbursement
agreements with banks to support letters of credit delivered as
security for AE's or GENCO's equity contribution obligation to an
Intermediate Company or otherwise in connection with an Intermediate
Company's or Exempt Subsidiary project development activities. Any
reimbursement agreement supporting a letter of credit would have a
term not in excess of 30 years.
These activities are consistent with Commission
precedent. The Commission has previously authorized such
acquisitions and financing as being closely related to a
system's core utility business. See, e.g., New England
Electric System, HCAR No. 26504 and Consolidated Natural Gas
Company, et al. HCAR No. 26523.
Investments in EWGs and FUCOs will be made outside
the financing requested in this Application and are subject to
the limitations in Rule 53. Any direct or indirect investment
(as defined in Rule 53) by AE or GENCO in an EWG or FUCO would
not be undertaken if, as a consequence, the aggregate direct
and indirect investment by GENCO and AE in all EWGs and FUCOs
would exceed 50% of AE's consolidated retained earnings. GENCO
and AE request that their authority to invest in EWGs and FUCOs
be increased as such limitation is changed in the future,
either by order or by amendment of Rule 53.
A copy of this Application will be submitted to the
public utility commissions of the States of Maryland, Ohio,
Pennsylvania, Virginia and West Virginia, which are the only
regulators having jurisdiction over
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the retail rates of the
public-utility companies in the Allegheny system. In addition,
AE will submit to each such commission a copy of any Rule 24
Certificate required hereunder, as well as a copy of Item 9 of
AE's U-5-S, including Exhibits G and H thereof.
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.
ALLEGHENY ENERGY, INC.
By /s/ Thomas K. Henderson
Thomas K. Henderson
Vice President
WEST PENN POWER COMPANY
By /s/ Thomas K. Henderson
Thomas K. Henderson
Vice President
AYP ENERGY, INC.
By /s/ Thomas K. Henderson
Thomas K. Henderson
Vice President
Dated: June 11, 1999
