File No. 70-8553
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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, Esquire
Vice President
Allegheny Power System, Inc.
12 East 49th Street
New York, NY 10017
(Name and address of agent for service)
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1. Applicant hereby amends Item 1. Description of Proposed Transaction by
deleting the last paragraph thereof, which is contained in paragraph 4 of
Amendment No. 1.
2. Applicant hereby further amends Item 1. Description of Proposed
Transaction by adding the following to the end thereof:
By prior Commission order dated February 3, 1995
(HCAR No. 26229), APS was authorized to invest from
time-to-time up to $3 million in its nonutility
subsidiary, AYP Capital, Inc., to engage in various
activities, including the acquisition, ownership and
operation of exempt wholesale generators ("EWGs").
APS and its subsidiaries are in compliance with
Rule 53(a), (b) and (c). APS states that the total
proceeds from the sale of the DRISP Additional Shares
and ESOSP Additional Shares, approximately $135
million, if invested in EWGs or foreign utility
companies ("FUCOs"), plus all other outstanding
authorization (File No. 70-8411, currently $3 million)
does not exceed 50% of APS' consolidated retained
earnings, which were $946,919,000 as of December 31,
1994. APS will maintain books and records in
accordance with applicable laws to identify
investments in and earnings from any EWGs or FUCOs in
which it directly or indirectly holds an interest. No
more than two percent of the employees of the system's
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domestic public utility companies will render
services, at any one time, directly or indirectly, to
EWGs or FUCOs. In addition, APS will simultaneously
submit a copy of each Form U-1 and certificate under
Rule 24 filed with the SEC under Rule 53 and a copy of
Item 9 of Form U5S and Exhibits G and H thereof to
each state regulator having jurisdiction over the
retail rates of APS' public utility subsidiaries.
None of the exclusions from the safe harbor of
Rule 53 apply. Neither APS nor any of its
subsidiaries has been the subject of a bankruptcy or
similar proceeding. APS' average consolidated
retained earnings for the four most recent quarterly
periods has not decreased by 10% from the average for
the previous four quarterly periods. Currently, APS
has no investments in EWGs or FUCOs and consequently
has had no losses in connection therewith.
3. Applicant hereby amends Item 1. Description of Proposed Transaction by
adding the following sentence to the end of the second paragraph under the
heading Savings Plan in Section B:
The purchase price for the ESOSP Additional
Common Stock will be in accordance with all applicable
IRS rules and regulations.
<PAGE>
4. Applicant further amends Item 1. Description of Proposed Transaction by
deleting the eighth paragraph under Section A. The Dividend Plan and replacing
it with the following:
APS proposes to use the proceeds from the
issuance of the DRISP Additional Common Stock, as well
as the ESOSP Additional Common Stock, the total amount
of which cannot be determined, to acquire common stock
of its public-utility subsidiaries and for other
general corporate purposes. APS will use either
existing authority or will obtain necessary approvals
prior to using the proceeds to make capital
contributions to its direct and advances to its
indirect subsidiaries, to acquire notes of its
subsidiaries or to make other types of loans to its
subsidiaries.
5. Applicant hereby amends Item 6. Exhibits and Financial Statements by
adding the following:
(a) Exhibits
D-2 Order of the Maryland Public Service Commission
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SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company
Act of 1935, the undersigned has duly caused this statement to be signed on
its behalf by the undersigned thereunto duly authorized.
ALLEGHENY POWER SYSTEM, INC.
By CAROL G. RUSS
Carol G. Russ
Counsel
Dated: March 21, 1995
U:\DUMP\DRISP\AMEND2
STATE OF MARYLAND
PUBLIC SERVICE COMMISSION
ORDER NO. 71832
IN THE MATTER OF THE APPLICATION * BEFORE THE
OF ALLEGHENY POWER SYSTEM, INC. PUBLIC SERVICE COMMISSION
FOR AUTHORITY TO ISSUE AND SELL OF MARYLAND
COMMON STOCK PURSUANT TO ITS
DIVIDEND REINVESTMENT AND STOCK *
PURCHASE PLAN, ITS EMPLOYEE STOCK
OWNERSHIP AND SAVINGS PLAN, ITS *
PERFORMANCE SHARE PLAN, AND ITS
RESTRICTED STOCK PLAN FOR OUTSIDE *
DIRECTORS. CASE NO. 8684
On February 6, 1995, Allegheny Power System, Inc. ("APS")
filed an application with the Commission for authority to issue not
more than 6,525,000 shares of common stock for certain incentive
programs for its stockholders, employees, managers and directors.
Specifically, APS proposes to issue: 5,000,000 shares to its
Dividend Reinvestment and Stock Purchase Plan; 1,000,000 shares to
its Employees Stock Ownership Savings Plan; 500,000 shares to its
Performance Share Plan; and 25,000 shares to its Restricted Stock
Plan for Outside Directors. According to the Company, the proceeds
of the issuance will be used "for the reimbursement of monies ...
expended by APS, within five years next prior to the filing of the
petition in this case, for the acquisition of certain property by
APS and the discharge of certain of its obligations as more
particularly set forth in Exhibit No. 5 of the petition."
On February 6, 1995, the Commission referred this matter to
Technical Staff for its comments and recommendation. In a
memorandum dated March 2, 1995, Staff recommends that the
Commission approve APS' application as filed. Staff suggests that,
more likely than not, the issuance of 6.525 million shares of
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common stock will have a "neutral to minimally positive" impact on
APS' financial condition. Staff notes that approval of this
application should not be construed as approval of any specific
capital structure for ratemaking purposes.
Section 65(a) of The Public Service Commission Law(1)
provides:
The Commission shall authorize the issuance by any public
service company of stocks ... if, and only if, it finds that
such issuance is reasonably required for (i) the acquisition
by the issuing company of property, or (ii) the construction,
completion, extension or improvement of its facilities, or
(iii) the discharge or lawful refunding of its obligations, or
(iv) the maintenance or improvement of service, or (v) the
reimbursement of moneys ... expended for any of the purposes
enumerated in items (i) through (iii) of this subsection,
within five years next prior to the filing of an application
with the Commission for such reimbursement ....
After considering this matter at the March 8, 1995
Administrative Meeting, the Commission concludes that APS'
application for authority to issue 6.525 million shares of common
stock should be granted. Staff states that the proceeds of the
requested issuance will be used for reimbursement of moneys used
for the discharge or lawful refunding of the Company's obligations.
Accordingly, the Commission finds that the issuance is reasonably
required for one or more of the purposes enumerated in subsection
(a) of Section 65 of The Public Service Commission Law. The
Commission agrees with Staff that approval of this application is
not equivalent to an endorsement of any particular capital
structure for ratemaking purposes.
(1) Md. Ann. code, art. 78, Sections 1-107.
<PAGE>
IT IS, THEREFORE, this 9th day of March in the year Nineteen
Hundred and Ninety-five, by the Public Service Commission of
Maryland,
ORDERED: (1) That Allegheny Power System, Inc. is hereby
authorized to issue 6.525 million shares of common stock for the
purposes set forth in the application and exhibits that were filed
on February 6, 1995.
By Direction of the Commission,
DANIEL P. GAHAGAN
Daniel P. Gahagan
Executive Secretary
