UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
April 13, 1998
Duquesne Light Company
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(Exact name of registrant as specified in its charter)
Pennsylvania 1-956 25-0451600
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(State or other (Commission File) (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation or
organization)
411 Seventh Avenue
Pittsburgh, Pennsylvania 15219
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412) 393-6000
N/A
(Former name or former address, if changed since last report.)
<PAGE>
Items 1-4. Not applicable.
Item 5. Other Events.
Registrant to Join Midwest Independent System Operator. On
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April 13, 1998, Registrant announced that it has applied for
membership in the Midwest Independent System Operator (MISO), a
regional electricity transmission organization, and will join
upon completion of the proposed merger of its parent company,
DQE, Inc. (DQE) with Allegheny Energy, Inc. (AYE). DQE and AYE
executives recently notified the Federal Energy Regulatory
Commission (FERC) of their intention to join the MISO, and that
they would not withdraw from the MISO without the prior approval
of the FERC.
Nine companies committed to formation of the MISO by filing
for approval with the FERC in January 1998. The companies are:
Cinergy Corp.; Commonwealth Edison Company; Wisconsin Electric
Power Company; Hoosier Energy Rural Electric Cooperative; Wabash
Valley Power Association; Ameren; Kentucky Utility Company;
Louisville Gas & Electric Company; Illinois Power Company; and
Central Illinois Light Company.
Registrant Responds to Administrative Law Judges'
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Recommended Decisions. On April 14, 1998, Registrant filed
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exceptions to the recommendations made March 25 by Pennsylvania
Public Utility Commission (PUC) administrative law judges
regarding Registrant's restructuring plan. Also on April 14, DQE
and AYE jointly filed exceptions to the PUC administrative law
judges' recommendation that approval of the proposed merger be
delayed by up to 18 months until market power concerns have been
addressed.
In its restructuring plan filed in August 1997, Registrant
proposed a market-based approach to determining the value of its
generating assets, with a final market test to be applied in
2003, when electricity markets are more fully developed. The
administrative law judge did not support this approach, citing
the delay until 2003 as inappropriate, and recommended instead
either an immediate auction of Registrant's generating assets if
the proposed DQE/AYE merger is not consummated, or an
administrative determination of the value of such assets if the
proposed DQE/AYE merger is consummated. In its exceptions,
Registrant is seeking clarification of the administrative law
judge's recommendation. Also in its exceptions, Registrant
reaffirms its fundamental premise that market data should be used
to set the value of its generating assets.
In their joint exceptions, DQE and AYE commit to mitigate
the potential market power of the new company by joining the MISO
and by relinquishing control of the output of Registrant's 570-
megawatt Cheswick Power Station (Cheswick) for a minimum of two
years or until the MISO has been approved. Both actions would
occur immediately upon completion of the proposed merger. DQE
and AYE further commit to issue a request for proposals to sell
the output of Cheswick within a month of securing all required
regulatory approvals for the proposed merger. Registrant will
continue to own and operate Cheswick. Both DQE and AYE are
urging the PUC to adopt the plan for a final valuation of
generating assets in 2003.
2
<PAGE>
Reply exceptions may be filed until April 24, 1998. The PUC
is scheduled to consider all exceptions and the recommended
decisions in non-binding polls at its April 30, 1998, meeting. A
final vote is set for the May 21, 1998, meeting.
Incorporation of Certain Documents by Reference. Duquesne
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Light Company (the "Company") does hereby incorporate by
reference into its Registration Statement (File No. 33-63602) the
following documents: (i) as Exhibit 4.5A the officer's
certificate dated June 15, 1993 which set forth certain terms of
and established the series of the Company's mortgage securities
designated First Collateral Trust Bonds, Series E under the
Company's Indenture of Mortgage and Deed of Trust dated April 1,
1992, as supplemented and amended (the "Mortgage") (a copy of
which is filed as Exhibit 4.5A hereto), and (ii) as Exhibit 4.5B
a form of officer's certificate to be used to establish certain
additional terms of and provisions of tranches of First
Collateral Trust Bonds, Series E to be issued (a copy of which is
filed as Exhibit 4.5B hereto).
Item 6. Not applicable.
Item 7. Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
The following documents are filed herewith in accordance with
Item 601 of Regulation S-K:
Exhibit No. Description
4.5A Officer's Certificate dated June
15, 1993 setting forth certain
terms of and establishing First
Collateral Trust Bonds, Series E
4.5B Form of Officer's Certificate
establishing certain additional
terms of certain First Collateral
Trust Bonds, Series E bonds to be
issued
Items 8-9. Not applicable.
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
DUQUESNE LIGHT
COMPANY
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(Registrant)
Date April 17, 1998 /s/Gary L. Schwass
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(Signature)
Gary L. Schwass
Senior Vice President
and Chief Financial Officer
4
<PAGE>
EXHIBIT INDEX
Exhibit Description
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4.5A Officer's Certificate dated June 15, 1993
setting forth certain terms of and
establishing First Collateral Trust Bonds,
Series E
4.5B Form of Officer's Certificate establishing
certain additional terms of certain First
Collateral Trust Bonds, Series E bonds to be
issued
DUQUESNE LIGHT COMPANY
OFFICER'S CERTIFICATE
(Under Section 301 of the Indenture of Mortgage
and Deed of Trust of Duquesne Light Company)
I, the undersigned James D. Mitchell, Treasurer of
DUQUESNE LIGHT COMPANY (the "Company"), in accordance with
Section 301 of the Indenture of Mortgage and Deed of Trust, dated
as of April 1, 1992, as heretofore supplemented (the "Mortgage,"
capitalized terms used herein and not defined herein having the
meanings specified in the Mortgage), of the Company to Mellon
Bank, N.A., as Trustee, do hereby establish for the series of
Securities established in Supplemental Indenture No. 5, dated as
of June 1, 1993, and designated First Collateral Trust Bonds,
Series E, the following terms and characteristics (the lettered
clauses set forth below corresponding to the lettered subsections
of Section 301 of the Mortgage):
(a) the title of the securities of such series
shall be "First Collateral Trust Bonds, Series E"
(the "Bonds");
(b) the aggregate principal amount of Bonds which
may be authenticated and delivered under the
Indenture shall be limited to $300,000,000, except
as contemplated in Section 301(b) of the Mortgage;
(c) interest on the Bonds shall be payable to the
Person or Persons in whose names the Bonds are
registered at the close of business on the Regular
Record Date for such interest, except as otherwise
expressly provided in a form of Bond attached
hereto and hereby authorized and approved;
(d) the date or dates on which the principal of
the Bonds shall be payable shall be determined at
the time of sale of the Bonds, or any Tranche
thereof, by the proper officers of the Company and
communicated to the Trustee by Company Order, or
by the proper officers of the Company pursuant to
the Administrative Procedures (the "Administrative
Procedures") attached as Exhibit A to the Selling
Agency Agreement dated June 15, 1993 among the
Company, Salomon Brothers Inc, Goldman Sachs & Co.
and Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated; provided, however,
that in no event shall any Bond have a term less
than nine months or more than 40 years;
(e) the Bonds, or any Tranche thereof, may bear
interest at fixed rates determined by the proper
officers of the Company as follows: there shall be
determined by the proper officers of the Company
and communicated to the Trustee by Company Order,
or by the proper officers of the Company pursuant
to the Administrative Procedures, at the time of
sale of the Bonds or any Tranche thereof, the
interest rate or rates (including the interest
rate on overdue principal, premium or interest, if
any) applicable to such Bonds, or Tranche thereof;
interest shall accrue on any Bond from the
Original Issue Date specified in such Bond or the
most recent date to which interest has been paid
or duly provided for; the Interest Payment Dates
shall be February 15 and August 15, and the
Regular Record Dates with respect to such Interest
Payment Dates shall be January 31 and July 31,
respectively (whether or not a Business Day);
provided, however, that the Interest Payment Dates
for the Bonds having a Stated Maturity of June 15,
2004 and bearing interest at a rate of 6.625% per
annum (the "6.625% Bonds") and the Bonds having a
Stated Maturity of June 15, 2025 and bearing
interest at a rate of 7.55% per annum (the "7.55%
Bonds"), in each case to be issued on or about
June 22, 1993, shall be June 15 and December 15,
commencing December 15, 1993 and the Regular
Record Dates with respect to the Interest Payment
Dates for the 6.625% Bonds and the 7.55% Bonds
shall be May 31 and November 30 (whether or not a
Business Day); and provided, further, that
interest shall accrue on the 6.625% Bonds and the
7.55% Bonds from June 15, 1993, rather than from
the original Issue Date specified in any such
Bonds, or the most recent date to which interest
has been paid or duly provided for;
(f) the office of The First National Bank of
Chicago in New York, New York, shall be the office
or agency of the Company at which the principal of
and premium, if any, and,interest, if any, at
maturity on the Bonds shall be payable, at which
Bonds may be surrendered for registration of
transfer and exchange and at which notices and
demands to or upon the Company in respect of the
Bonds and the Mortgage may be served; provided,,
however, that the Company reserves the right to
change, by one or more Officer's Certificates
supplemental to this Officer's Certificate, any
such office or agency; and provided, further, that
the Company reserves the right to designate, by
one or more Officer's Certificates supplemental to
this Officer's Certificate, its principal office
in Pittsburgh, Pennsylvania as any such office or
agency;
(g) the Bonds, or any Tranche thereof, shall be
redeemable in whole or in part, at the option of
the Company, as and to the extent determined at
the time of sale of the Bonds or any Tranche
thereof by the proper officers of the Company and
communicated to the Trustee by Company Order, or
determined by the proper officers of the Company
pursuant to the Administrative Procedures;
(h) the obligation, if any, of the Company to
redeem or purchase the Bonds, or any Tranche
thereof, pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof
and the period or periods within which, the price
or prices at which, and the terms and conditions
upon which, such Bonds or any Tranche thereof
shall be redeemed or purchased, in whole or in
part, pursuant to such obligation shall be
determined at the time of sale of the Bonds or any
Tranche thereof by the proper officers of the
Company and communicated to the Trustee by Company
Order, or determined by the proper officers of the
Company pursuant to the Administrative Procedures;
(i) the Bonds shall be issued in denominations of
$1,000 and integral multiples thereof or in such
other denominations as shall be determined at the
time of sale of the Bonds or any Tranche thereof
by the proper officers of the Company and
communicated to the Trustee by Company Order, or
determined by the proper officers of the Company
pursuant to the Administrative Procedures;
(j) not applicable;
(k) not applicable;
(l) not applicable;
(m) not applicable;
(n) not applicable;
(o) not applicable;
(p) not applicable;
(q) no service charge shall be made for the
registration of transfer or exchange of Bonds;
provided, however, that the Company may require
payment of a sum sufficient to cover any tax or
other governmental charge payable in connection
with the exchange or transfer;
(r) in the case of any Bond, if any Interest
Payment Date, any Redemption Date or the Stated
Maturity (as specified in any Bond) shall not be a
Business Day (as defined in the form of Bond
attached hereto), payment of amounts due thereon
on such date may be made on the next succeeding
Business Day, and if such payment is made or duly
provided for on such Business Day, no interest
shall accrue on such amounts for the period from
and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be, to
such Business Day; and
(s) (i) the proper officers of the Company may
execute, with the Paying Agent and any
Authenticating Agent for the Bonds, one or more
Letter(s) of Representations to The Depository
Trust Company substantially in either or both of
the forms attached hereto and any supplements or
amendments thereto necessary or desirable to make
the Bonds eligible for deposit at such depositary;
provided, however, that the Company reserves the
right to terminate any such Letter of
Representations by one or more Officer's
Certificates supplemental to this Officer's
Certificate; and provided, further, that the
Company reserves the right to enter into similar
agreements with any other depositary with respect
to the Bonds by one or more Officer's Certificates
supplemental to this Officer's Certificate and
(ii) the Bonds shall be substantially in the form
attached hereto and hereby authorized and approved
and shall have such further terms as are set forth
in such form; provided that the 6.625% Bonds and
the 7.55% Bonds shall be substantially in the form
attached hereto and hereby authorized and approved
and shall have such further terms as are set forth
in such form.
IN WITNESS WHEREOF, I have executed this Officer's
Certificate this 15th day of June, 1993.
/s/ James D. Mitchell
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James D. Mitchell
Treasurer
DUQUESNE LIGHT COMPANY
OFFICER'S CERTIFICATE SUPPLEMENTAL TO
OFFICER'S CERTIFICATE DATED JUNE 15, 1993
(Under Section 301 of the Indenture of Mortgage
and Deed of Trust of Duquesne Light Company
I, the undersigned ,
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of DUQUESNE LIGHT COMPANY (the "Company"), in
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accordance with Section 301 of the Indenture of Mortgage and Deed
of Trust, dated as of April 1, 1992 (the "Original Indenture"),
as heretofore supplemented (as so supplemented, the "Mortgage,"
capitalized terms used herein and not defined herein having the
meanings specified in the Mortgage), of the Company to The Chase
Manhattan Bank (successor to Mellon Bank, N.A.), as Trustee, do
hereby amend and supplement the Officer's Certificate dated June
15, 1993 (the "Original Officer's Certificate") which established
certain terms and characteristics for the series of Securities
established in Supplemental Indenture No. 5, dated as of June 1,
1993, and designated First Collateral Trust Bonds, Series E, as
follows with respect to the tranche of such Bonds being issued on
the date hereof referred to as the Company's % Quarterly
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Interest Bonds Due 2038 (the "Quarterly Interest Bonds"):
1. The following provision shall be added to the end
of clause (d):
; and provided, further, that the principal of the Quarterly
Interest Bonds shall be payable as provided in the form
attached hereto;
2. The following provision shall be added to the end
of clause (e):
; and provided, still further, that the Quarterly Interest
Bonds shall bear interest at the rate set forth in the form
thereof attached hereto, the Interest Payment Dates for the
Quarterly Interest Bonds shall be February 1, May 1, August
1 and November 1, commencing August 1, 1998, and the Regular
Record Dates for the Quarterly Interest Bonds with respect
to the Interest Payment Dates shall be January 15, April 15,
July 15 and October 15;
3. The following provision shall be added to the end
of clause (g):
; provided, that the Quarterly Interest Bonds shall be
redeemable at the option of the Company as provided in the
form thereof attached hereto;
4. The following provision shall be added to the end
of clause (i):
; provided, however, that the Quarterly Interest Bonds shall
be issued in denominations of $25 and integral multiples
thereof; and
5. The following provisions shall be added to clause
(s):
and, provided further, that the Quarterly Interest Bonds
shall be substantially in the form attached hereto and
hereby authorized and approved and shall have such further
terms as are set forth in such form; and
(iii) if the Company shall make any deposit of
money and/or Eligible Obligations with respect to any Bonds,
or any portion of the principal amount thereof, as
contemplated by Section 901 of the Indenture, the Company
shall not deliver an Officer's Certificate described in
clause (z) in the first paragraph of said Section 901 unless
the Company shall also deliver to the Trustee, together with
such Officer's Certificate, either:
(A) an instrument wherein the Company,
notwithstanding the satisfaction and discharge of
its indebtedness in respect of such Bonds, shall
assume the obligation (which shall be absolute and
unconditional) to irrevocably deposit with the
Trustee or Paying Agent such additional sums of
money, if any, or additional Eligible Obligations
(meeting the requirements of Section 901), if any,
or any combination thereof, at such time or times,
as shall be necessary, together with the money
and/or Eligible Obligations theretofore so
deposited, to pay when due the principal of and
premium, if any, and interest due and to become
due on such Securities or portions thereof, all in
accordance with and subject to the provisions of
said Section 901; provided, however, that such
instrument may state that the obligation of the
Company to make additional deposits as aforesaid
shall be subject to the delivery to the Company by
the Trustee of a notice asserting the deficiency
accompanied by an opinion of an independent public
accountant of nationally recognized standing,
selected by the Trustee, showing the calculation
thereof (which opinion shall be obtained at the
expense of the Company); or
(B) an Opinion of Counsel to the effect that
the Holders of such Bonds, or portions of the
principal amount thereof, will not recognize
income, gain or loss for United States federal
income tax purposes as a result of the
satisfaction and discharge of the Company's
indebtedness in respect thereof and will be
subject to United States federal income tax on the
same amounts, at the same times and in the same
manner as if such satisfaction and discharge had
not been effected; and
(iv) the Holders of the Quarterly Interest Bonds
shall be deemed to have consented to the execution and
delivery of a supplemental indenture containing one or more,
or all, the amendments to the Original Indenture set forth
below (or amendments of substantially the same tenor or
effect):
(A) the amendment of the definition of Stated
Interest Rate in Section 101 of the Original Indenture
to read as follows:
"STATED INTEREST RATE" means a rate (whether
fixed or variable) at which an obligation by its terms
is stated to bear simple interest. Any calculation or
other determination to be made under this Indenture by
reference to the Stated Interest Rate on an obligation
shall be made (a) if the Company's obligations in
respect of any other indebtedness shall be evidenced or
secured in whole or in part by such obligation, by
reference to the lower of the Stated Interest Rate on
such obligation and the Stated Interest Rate on such
other indebtedness and (b) without regard to the
effective interest cost to the Company of such
obligation or of any such other indebtedness.
(B) the amendment of the definition of "Cost" in
Section 104 of the Original Indenture to read as
follows:
Except as otherwise provided in Section 803,
the term "COST" with respect to Property Additions
shall mean the sum of (i) any cash delivered in payment
therefor or for the acquisition thereof, (ii) an amount
equivalent to the fair market value in cash (as of the
date of delivery) of any securities or other property
delivered in payment therefor or for the acquisition
thereof, (iii) the principal amount of any obligations
secured by prior Lien (other than a Class A Mortgage)
upon such Property Additions outstanding at the time of
the acquisition thereof, (iv) the principal amount of
any other obligations incurred or assumed in connection
with the payment for such Property Additions or for the
acquisition thereof and (v) any other amounts which, in
accordance with generally accepted accounting
principles, are properly charged or chargeable to the
plant or other property accounts of the Company with
respect to such Property Additions as part of the cost
of construction or acquisition thereof, including, but
not limited to, any allowance for funds used during
construction or any similar or analogous amount;
provided, however, that, notwithstanding any other
provision of this Indenture,
(x) with respect to Property Additions owned by a
successor corporation immediately prior to the time it
shall have become such by consolidation or merger or
acquired by a successor corporation in or as a result
of a consolidation or merger (excluding, in any case,
Property Additions owned by the Company immediately
prior to such time), Cost shall mean the amount or
amounts at which such Property Additions are recorded
in the plant or other property accounts of such
successor corporation, or the predecessor corporation
from which such Property Additions are acquired, as the
case may be, immediately prior to such consolidation or
merger;
(y) with respect to Property Additions which
shall have been acquired (otherwise than by
construction) by the Company without any consideration
consisting of cash, securities or other property or the
incurring or assumption of indebtedness, no
determination of Cost shall be required, and, wherever
in this Indenture provision is made for Cost or fair
value, Cost with respect to such Property Additions
shall mean an amount equal to the fair value to the
Company thereof or, if greater, the aggregate amount
reflected in the Company's books of account with
respect thereto upon the acquisition thereof; and
(z) in no event shall the Cost of Property
Additions be required to reflect any depreciation or
amortization in respect of such Property Additions, or
any adjustment to the amount or amounts at which such
Property Additions are recorded in plant or other
property accounts due to the non-recoverability of
investment or otherwise.
(C) the amendment of the proviso to clause (d) in
Section 803 of the Original Indenture to:
(1) delete therefrom clause (x) or to
provide that clause (x) may be disregarded upon
specified conditions; and/or
(2) (a) to delete therefrom clause (z) or
to provide that clause (z) may be disregarded upon
specified conditions; or
(b) to delete from clause (z) therein
the phrase "fifteen per centum (15%) of"; or
(c) to change the phrase "fifteen per
centum (15%)" in clause (z) therein to any higher
percentage not exceeding one hundred per centum (100%).
(D) the addition to the Original Indenture of a
definition of the term "purchase money mortgage"
substantially to the following effect:
"PURCHASE MONEY MORTGAGE" means, with respect
to any property being acquired or disposed of by the
Company or being released from the Lien of this
Indenture, a Lien on such property which
(a) is taken or retained by the transferor of
such property to secure all or part of the purchase
price thereof;
(b) is granted to one or more Persons other
than the transferor which, by making advances or
incurring an obligation, give value to enable the
grantor of such Lien to acquire rights in or the use of
such property;
(c) is granted to any other Person in
connection with the release of such property from the
Lien of this Indenture on the basis of the deposit with
the Trustee or the trustee or other holder of a Lien
prior to the Lien of this Indenture of obligations
secured by such Lien on such property (as well as any
other property subject thereto);
(d) is held by a trustee or agent for the
benefit of one or more Persons described in clause (a),
(b) and/or (c) above, provided that such Lien may be
held, in addition, for the benefit of one or more other
Persons which shall have theretofore given, or may
thereafter give, value to or for the benefit or account
of the grantor of such Lien for one or more other
purposes; or
(e) otherwise constitutes a purchase money
mortgage or a purchase money security interest under
applicable law;
and, without limiting the generality of the
foregoing, for purposes of this Indenture, the
term shall be deemed to include any Lien described
above whether or not such Lien (x) shall permit
the issuance or other incurrence of additional
indebtedness secured by such Lien on such
property, (y) shall permit the subjection to such
Lien of additional property and the issuance or
other incurrence of additional indebtedness on the
basis thereof and/or (z) shall have been granted
prior to the acquisition, disposition or release
of such property, shall attach to or otherwise
cover property other than the property being
acquired, disposed of or released and/or shall
secure obligations issued prior and/or subsequent
to the issuance of the obligations delivered in
connection with such acquisition, disposition or
release.
(E) the addition to the Original Indenture of a
definition of the term "fair value" substantially to
the following effect:
"FAIR VALUE", with respect to property, means
the fair value of such property as may be determined by
reference to (a) the amount which would be likely to be
obtained in an arm's-length transaction with respect to
such property between an informed and willing buyer and
an informed and willing seller, under no compulsion,
respectively, to buy or sell, (b) the amount of
investment with respect to such property which,
together with a reasonable return thereon, would be
likely to be recovered through ordinary business
operations or otherwise, (c) the Cost, accumulated
depreciation and replacement cost with respect to such
property and/or (d) any other relevant factors;
provided, however, that (x) the fair value of property
shall be determined without deduction for any Liens on
such property prior to the Lien of this Indenture
(except as otherwise provided in Section 803) and (y)
the fair value to the Company of Property Additions
shall not reflect any reduction relating to the fact
that such Property Additions may be of less value to a
Person which is not the owner or operator of the
Mortgaged Property or any portion thereof than to a
Person which is such owner or operator. Fair value may
be determined, without physical inspection, by the use
of accounting and engineering records and other data
maintained by the Company or otherwise available to the
Engineer certifying the same.
IN WITNESS WHEREOF, I have executed this Officer's
Certificate this day of , .
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