File No. 70-8411
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
POST-EFFECTIVE AMENDMENT NO. 2
TO
APPLICATION OR DECLARATION
ON
FORM U-1
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
ALLEGHENY POWER SYSTEM, INC.
12 EAST 49TH STREET
NEW YORK, NY 10017
(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.
Vice President
Allegheny Power System, Inc.
Tower Forty-Nine
12 East 49th Street
New York, NY 10017
(Name and address of agent for service)
<PAGE>
1. Applicant hereby amends the last five (5) paragraphs of
Item 1. Description of Proposed Transaction by deleting them in their entirety
and substituting the following therefor:
Allegheny Power System, Inc. ("APS"), a registered holding company
under the Public Utility Holding Company Act of 1935 (the "Act"), requests
authority (i) to allow its non-utility subsidiary company, AYP Capital, Inc.
("AYP Capital") to engage in preliminary development activities, (ii) to
expand the scope of AYP Capital's previously approved activities to include
activities directly or indirectly related to the development, acquisition,
construction, and/or operation of companies for the acquisition and ownership
of exempt wholesale generators ("EWG's"), (iii) to expand the scope of AYP
Capital's permitted activities to include the business of providing consulting
services to nonaffiliates, and (iv) to increase its investment in AYP Capital
from $500,000 to $3 million by means of purchases of AYP Capital stock or
capital contributions from time-to-time through December 31, 1996, without
further Commission approval.
By order dated July 14, 1994 (HCAR 35-26085), APS was authorized
to organize and finance a new wholly-owned non-utility subsidiary, AYP
Capital, that would invest directly or indirectly in (1) companies in the area
of emerging technologies closely related to APS's core utility business, and
(2) companies for the acquisition and ownership of exempt wholesale generators
("EWGs"), as defined in Section 32 of the Act, as amended by the Energy Policy
Act of 1992. APS was also authorized to invest up to $500,000 in AYP Capital
for its formation and for investment opportunities in connection with the
approved activities.
<PAGE>
Applicant now proposes to expand the scope of AYP Capital's
previously approved activities to include activities directly or indirectly
related to the development, acquisition, construction and/or operation of
companies for the acquisition and ownership of EWG's. In addition, Applicant
seeks authority for AYP Capital to engage in preliminary development and
administrative activities related to opportunities for AYP Capital in
connection with (1) qualifying cogeneration facilities as defined in the
Public Utility Regulatory Act of 1978 ("PURPA") and rules thereunder, located
anywhere in the United States and its territories; (2) qualifying small power
production facilities ("qualifying SPPs"), as defined in PURPA and the
regulations thereunder, located anywhere in the United States and its
territories; (3) nonqualifying cogeneration facilities, SPPs, and independent
power production facilities ("IPP facilities"), located within the service
territories of APS' operating subsidiaries; (4) EWG's; (5) companies involved
in new technologies related to the core business of APS; (6) foreign utility
companies ("FUCOs"), as defined in Section 33 of the Act, as amended by the
Energy Policy Act of 1992. No investment will be made by AYP Capital in these
businesses beyond the amount established for preliminary development
activities, without asking for and receiving such Commission approval as may
be required.
<PAGE>
The preliminary development activities in which AYP Capital is
seeking authority to engage with regard to the opportunities listed above
include, but are not limited to, researching and analyzing potential
investment opportunities, conducting site investigations, preparing
feasibility studies, developing proposed financing programs and other
necessary activities associated with identifying and analyzing feasible
investment opportunities. Administrative activities would include, among
other things, accounting, tax, engineering, financial and other similar
activities associated with the preliminary development activities.
APS also seeks to expand the scope of AYP Capital's permitted
activities to include the business of providing consulting services to
nonaffiliates. AYP Capital is seeking authority to enter into contracts to
provide consulting services to nonaffiliates. Such consulting services will
not include taking an ownership interest in or investing in another business.
Consulting services may include the following: (1) management services,
including technical capabilities and expertise, in respect of electric power
generation, transmission facilities, distribution facilities and energy
facilities, including operations closely involved therewith such as strategic
planning, feasibility studies, and policy and organizational matters; (2)
technical and procedural services in respect of such projects and facilities,
particularly in the areas of design, engineering, procurement, installation,
environmental and construction management, planning and procedures; (3)
services connected with advanced computer hardware and software for use in
connection with the generation, transmission and distribution (or planning and
construction of facilities therefor) of electricity, including licensing of
software; (4) services connected with power-related electronic systems,
control systems and components; (5) conducting training sessions and seminars
<PAGE>
in respect of such projects and facilities; (6) producing studies and reports;
(7) meeting with technical staff and assessing strengths, weaknesses, and
potential solutions; (8) performing administrative, management, scheduling and
billing functions; (9) developing and proposing programs for implementation by
customers; (10) making regulatory assessments; and (11) any other similar
consulting services.
APS also seeks authorization to increase its investment in AYP
Capital from $500,000 to $3 million. The additional $2.5 million will be
invested (i) through the purchase of additional shares of AYP Capital common
stock, or (ii) through making additional capital contributions to AYP Capital.
The aggregate amount of all investments (including common stock) by APS in AYP
Capital shall not exceed $3 million. At this time, the budget amount
established for consulting services is $500,000 and for preliminary
development activities is $2.5 million.
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 POWER SYSTEM, INC.
By: NANCY H. GORMLEY
Nancy H. Gormley
Counsel
Dated: November 10, 1994
U:\DUMP\AYP\POSTEFF2.2
