File No. 70-8411
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
POST-EFFECTIVE AMENDMENT NO. 10
TO
APPLICATION OR DECLARATION
ON
FORM U-1
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
ALLEGHENY POWER SERVICE CORPORATION
800 CABIN HILL DRIVE
GREENSBURG, PA 15601
ALLEGHENY POWER SYSTEM, INC.
12 EAST 49TH STREET
NEW YORK, NY 10017
AYP CAPITAL, 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)
Thomas K. Henderson, Esq.
Allegheny Power Service Corporation
Tower Forty-Nine
12 East 49th Street
New York, NY 10017
(Name and address of agent for service)
1. Applicants hereby amend Item 1. Description of Proposed
Transaction by adding the following to the end thereof:
By order dated October 27, 1995 (HCAR 26401), the Commission
authorized AYP Capital, Inc. ("AYP Capital") or a special purpose subsidiary
of AYP Capital ("NEWCOs") to engage in the following activities: (i) to
provide energy management services and demand side management services to
nonassociates at market prices and to associate companies at cost; (ii) to
engage in activities related to the development, acquisition, ownership,
construction and operation of foreign utility companies ("FUCOs") and to
invest in FUCOs through various types of investment vehicles; (iii) to acquire
the securities of NEWCOs that own FUCOs or exempt wholesale generators
("Project NEWCOs"); (iv) to factor the accounts receivable of associate
companies and of nonassociate companies whose primary revenues are derived
from the sale of electric power; and (v) as agent for the APS system
companies, to manage the real estate portfolio of Allegheny Power System, Inc.
("APS") and its associate companies. In the October 27, 1995 order, APS was
authorized to invest in AYP Capital through loans or guarantees, and AYP
Capital was authorized to invest in NEWCOs and in Project NEWCOs through loans
or guarantees, up to an aggregate of $100 million through December 31, 1999
for approved activities. In addition, subject to the $100 million investment
authority, AYP Capital, the NEWCOs and the Project NEWCOs were authorized to
obtain loans from banks or issue recourse obligations guaranteed by AYP
Capital or APS. Project NEWCOs were also authorized to issue partnership
interests or trust certificates through December 31, 1999, to third parties to
finance EWGs and FUCOs in an amount not to exceed $200 million.
APS and AYP Capital now seek to raise the aggregate financing
limit on loans and guarantees from $100 million to $300 million for all
approved activities in File No. 70-8411. Three hundred million dollars
represents 31% of the system's consolidated retained earnings as of September
30, 1995. AYP Capital recently agreed to purchase the 50% undivided interest
of Duquesne Light Company in Fort Martin Generating Station Unit No. 1. The
purchase price of the Unit is $181 million. Financing of this purchase may
involve loans or guarantees of the sort previously approved by this Commission
in its October 27, 1995 Order. APS and AYP Capital desire flexibility in
structuring the financing of this acquisition, and consequently now seek to
raise the previously imposed cap on loans and guarantees by $200 million. If
the financing for the acquisition does not utilize all of the additional
financing authority, Applicants may use it for the activities relative to EMS
and DSM services, accounts receivable, real estate, FUCOs and EWGs, or any of
the other previously approved activities.
Currently, the Fort Martin Generating Station is operated by
Monongahela Power Company ("Monongahela"), an associate company of AYP Capital
and a wholly-owned public utility subsidiary of APS. Monongahela operates the
Fort Martin station for the benefit of its owners pursuant to an Operating
Agreement dated April 30, 1965. Certain common facilities are operated under
a Common Facilities Operating Agreement dated November 14, 1968, which merely
extended the terms of the original Operating Agreement to cover the common
facilities. The Operating Agreement has been approved by all state
commissions having jurisdiction over the parties, as well as by the FERC.
Under the Operating Agreement, Fort Martin Unit No. 1 is operated
and maintained by an operating company chosen by an operating committee made
up of the three owners of Unit No. 1: Duquesne Light Company, Monongahela, and
The Potomac Edison Company. Monongahela is currently the operating company.
The Operating Agreement details the allocation of costs for the operation and
maintenance of Unit No. 1. The Operating Agreement may be assigned, and
Duquesne Light Company intends to assign it to AYP Capital upon financial
closing. Once ownership of Duquesne Light Company's interest in Fort Martin
Unit No. 1 is transferred, Monongahela will perform services for the benefit
of AYP Capital. These services will be performed, and reimbursed, in
accordance with the terms of the previously approved Operating Agreement. The
public utility commissions in the states which have affiliated interest
statutes will be asked to approve the transfer of Duquesne Light Company's
interest under the Operating Agreement to AYP Capital. AYP Capital requests
approval to step into the shoes of Duquesne Light Company under the Operating
Agreement and to continue to use Monongahela to operate and maintain Fort
Martin Unit No. 1 in accordance with the terms of the previously approved
Operating Agreement.
2. Applicants hereby amend Item 4. Regulatory Approval by adding the
following to the end thereof:
Applications will be filed with the Pennsylvania Public Utility
Commission, the State Corporation Commission of Virginia and the Public
Service Commission of West Virginia for approval under their respective state
affiliated interest statutes for AYP Capital to succeed to Duquesne Light
Company's interest under the Operating Agreement. No other state or federal
commission (other than the Securities and Exchange Commission) has
jurisdiction over the assignment of the Operating Agreement.<PAGE>
3. Applicants hereby amend Item 6. Exhibits and Financial Statements
by adding the following thereto:
(a) Exhibits
B-1 Fort Martin Construction and Operating Agreement
dated April 30, 1965 (to be filed by amendment).
B-2 Fort Martin Common Facilities Operating
Agreement dated November 14, 1968 (to be filed
by amendment).
D-1 Application to the Pennsylvania Public Utility
Commission (to be filed by amendment).
D-2 Application to the Virginia State Corporation
Commission (to be filed by amendment).
D-3 Application to the West Virginia Public Service
Commission (to be filed by amendment).
D-4 Order of the Pennsylvania Public Utility
Commission (to be filed by amendment).
D-5 Order of the Virginia State Corporation
Commission (to be filed by amendment).
D-6 Order of the West Virginia Public Service
Commission (to be filed by amendment).
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:
Thomas K. Henderson
Counsel
AYP CAPITAL, INC.
By:
Thomas K. Henderson
Counsel
ALLEGHENY POWER SERVICE CORPORATION
By:
Thomas K. Henderson
Counsel
Dated: December 29, 1995
