SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): March 12, 1996
ALLEGHENY POWER SYSTEM, INC.
(Exact name of registrant as specified in its charter)
Maryland 1-267 13-5531602
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
12 East 49th Street
New York, New York 100171
(Address of principal executive offices)
Registrant's telephone number,
including area code: (212) 752-2121
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Item 5. Other Events.
A copy of Allegheny Power System, Inc.'s (the "Company") press
release dated March 12, 1996 announcing the Company's
restructuring plans is filed as an exhibit to this Current Report
on Form 8-K.
Item 7. Financial Statements and Exhibits.
Exhibit 99.1 Press Release dated March 12, 1996.
SIGNATURES
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.
ALLEGHENY POWER SYSTEM, INC.
Dated: March 13, 1996 By: THOMAS K. HENDERSON
Name: Thomas K. Henderson
Title: Counsel
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EXHIBIT INDEX
Exhibit 99.1 Press Release dated March 12, 1996.
[ALLEGHENY POWER LETTERHEAD]
Principal Subsidiaries:
Monongahela Power Company
The Potomac Edison Company
West Penn Power Company NEWS RELEASE
----------------------------
Donald L. Whipp
Director, Public Information
800 Cabin Hill Drive
Greensburg, PA 15601-1689
Phone: (412) 838-6272
FOR IMMEDIATE RELEASE
Allegheny Power Announces Restructuring Plans
New York, March 12 -- The Allegheny Power System, whose operating
units provide electric and energy-related services in Maryland, Ohio,
Pennsylvania, Virginia, and West Virginia, today announced plans for
the reengineering and restructuring of its organization. The changes
are required to protect and improve its competitive position, the
Company said, and enable it to continue to provide the economic and
reliable electric services that its customers expect and deserve.
Alan J. Noia, President and Chief Operating Officer of Allegheny
Power, said that technology, unavailable a few years ago, now permits
the Company to gather and process information remotely, more
efficiently, and less expensively. As a result, the changes are
timely given the need to reverse the Company's increasing cost trends
in the ever-greater competitive environment of the energy industry.
Furthermore, he said, Allegheny Power's present financial strength
permits it to take the actions necessary in a timely and deliberate
manner with due consideration for the needs of its employees.
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Most of the changes will occur on the Company's electric
distribution side, which serves nearly 1.4 millon customers.
Allegheny Power's corporate services and internal supply functions
will also be affected. Reengineering of the Company's
generation, transmission, and related activities began last year and
is well under way.
Reengineering and restructuring includes consolidating operating
divisions in the Company's three principal operating units,
Monongahela Power, Potomac Edison, and West Penn Power, and
centralizing and changing many accounting, customer services, and
other functions. Efficiencies are expected to help the Company avoid
future increases in electric rates, which are already the lowest or
among the lowest in the region it serves.
Most of the changes announced today are expected to occur over
the next two years and will reduce the number of employees at
Allegheny Power by about 1,000. Employees at all levels will be
affected. Reductions will be accomplished through an enhanced
separation plan, attrition, and, in the union workforce, by contracts.
Allegheny Power said the additional restructuring announced today
may result in a charge to earnings of between $75 million and $100
million before taxes, which will be recovered primarily through cost
savings over the next several years. Noia emphasized the preliminary
nature of this estimate. In 1995, the Company reported restructuring
charges of $16 million before taxes.
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Changes made in 1995, coupled with those announced today, will
improve customer service and reliability and will enable the Company
to provide the services and low costs its growing customer base,
within its service territory and beyond, requires.
In connection with its restructuring, Allegheny Power announced
earlier that it will move its corporate headquarters from New York
City to its service area in Washington County, Maryland, later this
year.
The Company had sales of about $2.6 billion in 1995 and net
income of about $240 million.
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3/12/96
