<PAGE>
File No. 70-9469
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 3
TO
FORM U-1
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 Energy, Inc.
(Name of top registered holding company parent of each applicant
or declarant)
Thomas K. Henderson, Esq.
Vice President
Allegheny Energy, Inc.
10435 Downsville Pike
Hagerstown, MD 21740-1766
(Name and address of agent for service)
<PAGE>
West Penn Power Company hereby amends Item No. 2. Fees,
Commissions and Expenses by deleting it in its entirety and
substituting the following therefor:
Item No. 2. Fees, Commissions and Expenses
The following estimated fees and expenses are expected
to be incurred by the Applicant in connection with the
formation of two new subsidiaries, the acquisition of
interests in those companies, and the issuance of transition
bonds by Energy Subsidiary:
Registration Fee $ 186,260
Printing and Engraving Expenses 100,000
Trustees' Fees and Expenses 30,000
Legal Fees and Expenses 750,000
Blue Sky Fees and Expenses 10,000
Accountants' Fees and Expenses 150,000
Rating Agency Fees 500,000
Miscellaneous Fees and Expenses 350,000
Total $2,076,260
2. West Penn also files herewith the following Exhibits and
Financial Statements:
Item No. 6. Exhibits and Financial Statements
(a) Exhibits
B-3 Form of Service Agreement with APSC
D-1 West Penn's
Settlement Agreement approved by
the Pennsylvania Public Utility
Commission (incorporated by
reference to File No. 70-9147)
2
<PAGE>
D-2 Orders of the
Pennsylvania Public Utility
Commission (incorporated by
reference to File No. 70-9147)
F Opinion of
Counsel
G Financial Data
Schedule
(b) Exhibits
1-a Consolidated Statement of Income
for Twelve Months Ended March 31,
1999 Per Books
2-a Consolidated Balance Sheet - March
31, 1999 Per Books
3-a Consolidated Statement of Retained
Earnings for the Twelve Months
Ended March 31, 1999
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 /s/ Carol G. Russ
Carol G. Russ
Counsel
Dated: July 1, 1999
<PAGE>
EXHIBIT F
412-838-6770
Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
Referring to the Application or Declaration on Form U-1
previously filed by West Penn Power Company ("West Penn") under
the Public Utility Holding Company Act of 1935 with respect to
the proposed creation of two subsidiaries, and the issuance by
one subsidiary of up to $670 million of transition bonds, all as
described in the Application or Declaration of which this Opinion
is a part, I have examined or caused to be examined such
documents and questions of law as I deemed necessary to enable me
to render this opinion.
I understand that the actions taken in connection with
the proposed transactions will be in accordance with the
Application or Declaration; that all amendments necessary to
complete the above-mentioned Application or Declaration will be
filed with the Commission; and that all other necessary corporate
action by the Board of Directors and officers of West Penn in
connection with the described transactions has been or will be
taken prior thereto.
Based upon the foregoing, I am of the opinion that if
the said Application or Declaration is permitted to become
effective and the proposed transactions are consummated in
accordance therewith:
(a) all state laws applicable to the proposed transaction will
have been complied with;
(b) the issuer of the transition bonds will be validly organized
and duly existing;
(c) the transition bonds will be valid and binding obligations
of the issuer in accordance with their terms; and
(d) the consummation of the proposed transactions will not
violate the legal rights of the holders of any of the securities
issued by West Penn or by any associate or affiliate company or
any of them.
This opinion does not relate to State Blue Sky or
securities laws.
I consent to the use of this Opinion as part of the
Application or Declaration which has been filed by West Penn in
File No. 70-9469.
Very truly yours,
/s/ Carol G. Russ
Carol G. Russ
Counsel for
WEST PENN POWER COMPANY
<TABLE> <S> <C>
<ARTICLE> OPUR1
<MULTIPLIER> 1,000
<CURRENCY> U.S.DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> APR-1-1998
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,989,485
<OTHER-PROPERTY-AND-INVEST> 73,048
<TOTAL-CURRENT-ASSETS> 339,429
<TOTAL-DEFERRED-CHARGES> 520,647
<OTHER-ASSETS> 619
<TOTAL-ASSETS> 2,923,228
<COMMON> 465,994
<CAPITAL-SURPLUS-PAID-IN> 55,475
<RETAINED-EARNINGS> 198,392
<TOTAL-COMMON-STOCKHOLDERS-EQ> 719,861
0
79,708
<LONG-TERM-DEBT-NET> 838,000
<SHORT-TERM-NOTES> 64,197
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 54,000
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,167,462
<TOT-CAPITALIZATION-AND-LIAB> 2,923,228
<GROSS-OPERATING-REVENUE> 1,115,749
<INCOME-TAX-EXPENSE> 71,281
<OTHER-OPERATING-EXPENSES> 871,881
<TOTAL-OPERATING-EXPENSES> 943,162
<OPERATING-INCOME-LOSS> 172,587
<OTHER-INCOME-NET> 10,847
<INCOME-BEFORE-INTEREST-EXPEN> 183,434
<TOTAL-INTEREST-EXPENSE> 64,314
<NET-INCOME> 119,120
3,354
<EARNINGS-AVAILABLE-FOR-COMM> (159,661)
<COMMON-STOCK-DIVIDENDS> 99,883
<TOTAL-INTEREST-ON-BONDS> 60,468
<CASH-FLOW-OPERATIONS> 0<F1>
<EPS-BASIC> 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>
<PAGE>
EXHIBIT 6(b) 1a
WEST PENN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME FOR TWELVE MONTHS ENDED
MARCH 31, 1999 PER BOOKS
(Thousands of Dollars)
<TABLE>
<CAPTION>
Per Books Adjustments Pro Forma
<S> <C> <C> <C>
ELECTRIC OPERATING REVENUES $ 1,115,749
OPERATING EXPENSES:
Operation:
Fuel 254,899
Purchased power and exchanges, net 137,397
Other 182,664
Maintenance 93,494
Depreciation 117,057
Taxes other than income taxes 86,370
Federal and state income taxes 71,281
Total Operating Expenses 943,162
Operating Income 172,587
OTHER INCOME AND DEDUCTIONS:
Allowance for other than borrowed funds
used during construction 26
Other income, net 10,821
Total Other Income and Deductions 10,847
Income Before Interest Charges 183,434
INTEREST CHARGES:
Interest on long-term debt 60,468
Other interest 5,992
Allowance for borrowed funds used during
construction (2,146)
Total Interest Charges 64,314
CONSOLIDATED NET INCOME BEFORE EXTRAORDINARY ITEMS 119,120
Extraordinary item (275,427)
CONSOLIDATED NET INCOME $ (156,307)
</TABLE>
<PAGE>
EXHIBIT 6(b)2a
WEST PENN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET - MARCH 31, 1999 PER BOOKS
(Thousands of Dollars)
<TABLE>
<CAPTION>
Per Books Adjustments Pro Forma
ASSETS:
<S> <C> <C> <C>
Property, Plant, and Equipment:
At original cost, including $80,023
and $75,725 under construction $ 3,377,431
Accumulated depreciation (1,387,946)
1,989,485
Investments and Other Assets:
Allegheny Generating Company - common stock a 73,048
Other 619
73,667
Current Assets:
Cash and temporary cash investments 6,198
Accounts receivable:
Electric service 153,577
Affiliated and other 70,094
Allowance for uncollectible accounts (15,884)
Materials and supplies - at average cost:
Operating and construction 45,227
Fuel 28,364
Prepaid taxes 32,706
Regulatory assets 17,372
Other 1,775
339,429
Deferred Charges:
Regulatory assets 479,862
Unamortized loss on reacquired debt 3,961
Other 36,824
520,647
Total Assets $ 2,923,228
CAPITALIZATION AND LIABILITIES:
Capitalization:
Common stock $ 465,994
Other paid-in capital 55,475
Retained earnings 198,392
719,861
Preferred stock 79,708
Long-term debt and QUIDS 838,000
1,637,569
Current Liabilities:
Short-term debt 64,197
Notes payable to affiliate 54,000
Accounts payable 78,537
Accounts payable to affiliates 56,900
Taxes accrued:
Federal and state income 20,005
Other 11,196
Interest accrued 11,431
Refunds payable 18,619
Adverse power purchase commitments-ST 47,173
Other 32,385
394,443
Deferred Credits and Other Liabilities:
Unamortized investment credit 41,981
Deferred income taxes 259,885
Regulatory liabilities 29,221
Adverse power purchase commitments-LT 526,952
Other 33,177
891,216
Total Capitalization and Liabilities $ 2,923,228
</TABLE>
<PAGE>
EXHIBIT 6(b) 3a
WEST PENN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF RETAINED EARNINGS FOR THE
TWELVE MONTHS ENDED MARCH 31, 1999
(Thousands of Dollars)
Balance at April 1, 1998 457,934
Deduct:
Consolidated net loss 156,307
301,627
Deduct:
Dividends on capital stock:
Preferred stock 3,352
Common stock 99,883
Total 103,235
Balance at March 31, 1999 198,39
<PAGE>
EXHIBIT B-3
SERVICE AGREEMENT
BETWEEN THE
ALLEGHENY POWER SERVICE CORPORATION
AND
__________________________________________
THE SERVICE AGREEMENT, between Allegheny Power Service
Corporation, a corporation formed under the laws of the State of
Maryland, (the "Service Company"@) and _____________________, a
corporation formed under the laws of the State of __________ (the
"Company").
WITNESSETH:
WHEREAS, the Service Company was created to perform
certain management duties on behalf of Allegheny Energy, Inc.
(the "System"), its utility subsidiary companies (the
"Subsidiaries") and its non-utility subsidiary company; and
WHEREAS, the Service Company offers to provide a
central organization to furnish to the System, the Subsidiaries
and the Company certain advisory, supervisory and other services
in accordance with current practices and procedures; and
WHEREAS, the Company wishes to accept the offer
proposed by the Service Company;
NOW, THEREFORE, in consideration of the mutual
covenants and agreements herein contained, and for other good and
valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto, intending to be reasonably
bound, hereby agree as follows:
1. The Service Company hereby offers to furnish to
the Company the services detailed on Exhibit I attached hereto
and made a part hereof.
2. For all services rendered for the Company by the
Service the Company agrees to pay the cost thereof. For services
rendered to one or more Subsidiaries and/or the System and/or the
Company, the allocation will be based on the average of the prior
three years' direct costs charged by the Service Company to each
Subsidiary and the Company. Until a
<PAGE>
three-year history for the
Company is developed, the Company=s costs will be deemed to be
the same as the average of the System's prior three years' direct
costs, thereby reducing each Subsidiary's share proportionately.
Once a three-year history for the Company is available, APSC will
calculate an allocation percentage for the Company. If the
difference between that allocation percentage and the one used
for any of the Company=s first three years is material, then APSC
will recalculate all allocation percentages for those years in
which the difference was material and the Company, the
Subsidiaries or the System will each either pay an additional
amount or receive a refund of a particular amount for that year.
3. The payment for services rendered by the Service
Company to the System, the Subsidiaries and the Company shall
cover all the costs and expenses of its doing business, excluding
only a return for the use of equity capital, and that each
Subsidiary, the System and the Company shall pay its direct or
fair proportionate share.
4. Payment shall be made by the Company to the
Service Company on a monthly basis on or before the 20th day of
the succeeding month, upon receipt of a statement showing the
amount due. Certain charges billed by the Service Company to the
Company may not be due immediately and will be so indicated on
the statement of billing. Monthly charges may be made on an
estimated basis, but adjustments will be made at the end of each
calendar year so that all charges for the calendar year will be
in accordance with the foregoing.
5. Nothing herein shall be construed to release the
officers and directors of the Company from the performance of
their respective duties or limit the exercise of their powers as
prescribed by law or otherwise.
6. This Service Agreement shall continue in full
force and effect from year to year but may be terminated by
either party upon 60 days' prior notice, and the Company may
terminate such contract at any time with or without notice for
any cause deemed by it to be sufficient.
7. The Service Agreement will be subject to
termination or modification at any time to the extent its
performance may conflict with the provisions of the Public
Utility Holding Company Act of 1935, as amended, or with any
rule, regulation or order of the Securities and Exchange
Commission adopted before or after the making of this Service
Agreement and shall be subject to the approval of any state
commission or other regulatory body whose approval is a legal
prerequisite to its execution and delivery or performance.
If the Company desires to accept this offer, please
cause it to be executed in the space provided below by your duly
authorized officers.
<PAGE>
Very truly yours,
ALLEGHENY POWER SERVICE CORPORATION
By
President
Attest:
Secretary
Pursuant to authorization of the Board of Directors of this
Company, we hereby accept the above offer this ___ day of
__________, 199_.
___________________________
By
President
Attest:
Secretary
<PAGE>
Exhibit I
Allegheny Power Service Corporation Principal Functions
In accordance with the terms and conditions of the Service
Agreement dated __________, 199__, the Service Company shall
perform for the Company the following services:
1. Provide technical support as needed to evaluate,
implement, and develop unregulated opportunities
related to the System's electric business (including,
but not limited to, any engineering, construction,
management and/or operating activities associated with
the development of bulk power supply opportunities).
2. Planning and implementation of financial programs to
raise the funds required for the Company, including
handling arrangements for bank borrowings and sales of
securities and relationships with investors and
analysts.
3. Counsel on corporate, legal and regulatory matters and
on important contractual relationships.
4. Provide general and administrative services including,
but not limited to, the following:
a) Purchasing.
b) Customer billing and accounting.
c) Information services, including computer
applications and programming and electronic data
processing.
d) Preparation of consolidated financial statements
and cost, statistical, and financial data, as
required.
e) Assistance with respect to certain personnel
matters, including, but not limited to, employee
benefit matters.
f) Preparation and filing of consolidated income tax
returns and following developments in federal and
state taxation regulations.
g) Administration of insurance.
<PAGE>
h) Internal auditing.
i) Corporate security.
5. Certain other services in addition to the above as the
Service Company may be able to provide and/or the
Company may require or request.
