File No. 70-8411
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
POST-EFFECTIVE AMENDMENT NO. 13
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 thereto:
AYP Energy, Inc. ("AYP Energy," formerly known as FTM Energy,
Inc.), a Delaware corporation and wholly-owned subsidiary of AYP Capital, Inc.
was formed to hold an undivided 50% interest in Unit No. 1 of the Fort Martin
Power Station, an "eligible facility" for which AYP Energy has applied to the
FERC for EWG status. See Exhibit D-7 previously filed and Exhibit D-7(a)
filed herewith for the FERC applications which contain a description of the
transaction.
AYP Energy is seeking Commission approval to enter into a Service
Contract with Allegheny Power Service Corporation, a wholly-owned subsidiary
of Allegheny Power System, Inc., a registered holding company.
Initially, APS does not anticipate that AYP Energy will have any
paid employees. Instead, personnel employed by Allegheny Power Service
Corporation ("APSC"), a wholly-owned subsidiary of APS, will provide a wide
range of services on an as-needed basis to AYP Energy pursuant to a service
agreement to be entered into between AYP Energy and APSC ("Service
Agreement"). The form of Service Agreement is attached hereto as Exhibit B-3.
Pursuant to the Service Agreement, APSC will provide technical
support and general and administrative services for AYP Energy, such as
engineering, management and/or operating activities associated with analyzing
the feasibility of bulk power supply opportunities, managing AYP Energy's
interest in Ft. Martin Unit No. 1, and power marketing in addition to
information services, legal, personnel, financial, accounting services and
other support activities. APSC will account for, allocate and charge its
costs of providing these services on a full cost reimbursement basis utilizing
a work order system, modified as appropriate, in accordance with the Uniform
System of Accounts for Mutual and Subsidiary Service Companies. The work
order system maintained by APSC requires differing levels of approvals by APSC
personnel depending upon the dollar amount and type of request.
The reimbursed cost of services identified through the work order
system shall include all direct charges and a prorated share of APSC's other
costs, including overhead, determined through methods of allocation previously
filed with the Commission by APSC as part of Form U-13-60. As filed, this
document includes methods for allocating direct charges, such as salaries,
employee welfare expenses, and training expenses, as well as indirect charges,
including the costs of maintaining the corporate existence of APSC, rents,
dues and memberships and all other expenses attributable to, or necessary to
the operation of, a department. Whenever the charges to individual companies
for services rendered are based upon estimates of APSC's costs, at the end of
each year such service charges are adjusted to actual cost, as required by
Rule 90(a)(2) under the Public Utility Holding Company Act of 1935.
All of the time APSC employees spend working for AYP Energy will
be billed to and paid by AYP Energy on a monthly basis, based upon time
records. Time sheets reflect the daily time of each APSC employee, and
completed time reports are approved by each employee's supervisor.
AYP Energy will maintain separate financial records and detailed
supporting records, including profit/loss statements. These records will be
available to any proper federal regulatory agency or state regulatory agency
for review. The accounting staff of APSC, pursuant to the service agreement
with AYP Energy, will be responsible for record keeping and maintaining audit
procedures which are in compliance with generally accepted accounting
principles.
AYP Energy will not use more than 2% of the total employees of all
of the other system domestic public utility companies at any one time for
rendering services to any affiliated EWGs.
2. Applicants hereby amend Item 3. Applicable Statutory
Provisions by adding the following thereto:
Applicants are informed by counsel that the proposed transactions
may be subject to Section 13(b) of the Public Utility Holding Company Act of
1935 and Rules 87, 90 and 91 thereunder.
3. Applicants hereby amend Item 6. Exhibits and Financial
Statements by filing the following:
B-3 Form of Service Agreement to be entered
into by Allegheny Power Service
Corporation and AYP Energy, Inc.
D-4(a) Order of the Pennsylvania Public Utility
Commission Approving Hybrid EWG Status.
D-7(a) Application to the Federal Energy
Regulatory Commission for Exempt Wholesale
Generator Status.
D-8(a) Order of the Federal Energy Regulatory
Commission Approving Exempt Wholesale
Generator Status (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: CAROL G. RUSS
Carol G. Russ
Counsel
AYP CAPITAL, INC.
By: CAROL G. RUSS
Carol G. Russ
Counsel
ALLEGHENY POWER SERVICE CORPORATION
By: CAROL G. RUSS
Carol G. Russ
Counsel
Dated: June 21, 1996
U:\DUMP\AYP\POSTEF13
Exhibit B-3
SERVICE AGREEMENT
BETWEEN
ALLEGHENY POWER SERVICE CORPORATION
AND
AYP ENERGY, INC.
THIS SERVICE AGREEMENT will be effective , 1996,
between Allegheny Power Service Corporation, a corporation formed under the
laws of the State of Maryland, (the "Service Company") and AYP Energy, Inc., a
corporation formed under the laws of the State of Delaware ("AYP Energy").
WITNESSETH:
WHEREAS, the Service Company was created to perform certain
management duties on behalf of Allegheny Power System, Inc. (the "System"),
its utility subsidiary companies (the "Subsidiaries") and its nonutility
subsidiary companies (the "Nonutility Subsidiaries"); and
WHEREAS, the Service Company offers to provide a central
organization to furnish to the System, the Subsidiaries and the Nonutility
Subsidiaries certain advisory, supervisory and other services in accordance
with current practices and procedures; and
WHEREAS, AYP Energy wishes to accept the offer proposed by the
Service Company.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto, intending to
be reasonably bound, hereby agree as follows:
1. The Service Company hereby offers to furnish to AYP Energy the
services detailed on Exhibit I attached hereto and made a part hereof.
2. For all services rendered to AYP Energy by the Service Company,
AYP Energy agrees to pay the cost thereof. For services rendered to one or
more Subsidiaries, Nonutility Subsidiaries and/or the System and/or AYP
Energy, the allocation will be based on the average of the prior three years'
direct costs charged by the Service Company to each Subsidiary, Nonutility
Subsidiary and AYP Energy. Until a three-year history for AYP Energy is
developed, AYP Energy's costs will be deemed to be the same as the average of
the System's prior three years' direct costs, thereby reducing each
Subsidiary's share proportionately. Once a three-year history for AYP Energy
is available, APSC will calculate an allocation percentage for AYP Energy. If
the difference between that allocation percentage and the one used for any of
AYP Energy's first three years is material, then APSC will recalculate all
allocation percentages for those years in which the difference was material
and AYP Energy, the Subsidiaries, the Nonutility Subsidiaries or the System
will each either pay an additional amount or receive a refund of a particular
amount for that year.
3. The payment for services rendered by the Service Company to the
System, the Subsidiaries, the Nonutility Subsidiaries and AYP Energy shall
cover all the costs and expenses of its doing business, excluding only a
return for the use of equity capital, and that each Subsidiary, Nonutility
Subsidiary, the System and AYP Energy shall pay its direct or fair
proportionate share.
4. Payment shall be made by AYP Energy to the Service Company on a
monthly basis on or before the 20th day of the succeeding month, upon receipt
of a statement showing the amount due. Certain charges billed by the Service
Company to AYP Energy may not be due immediately and will be so indicated on
the statement of billing. Monthly charges may be made on an estimated basis,
but adjustments will be made at the end of each calendar year so that all
charges for the calendar year will be in accordance with the foregoing.
5. Nothing herein shall be construed to release the officers and
directors of AYP Energy from the performance of their respective duties or
limit the exercise of their powers as prescribed by law or otherwise.
6. The offer set forth herein shall become a contract effective
as of the date of signing. Such Service Agreement shall continue in full
force and effect from year to year but may be terminated by either party upon
60 days' prior notice, and AYP Energy may terminate such contract at any time
with or without notice for any cause deemed by it to be sufficient.
7. The Service Agreement will be subject to termination or
modification at any time to the extent its performance may conflict with the
provisions of the Public Utility Holding Company Act of 1935, as amended, or
with any rule, regulation or order of the Securities and Exchange Commission
adopted before or after the making of this Service Agreement and shall be
subject to the approval of any state commission or other regulatory body whose
approval is a legal prerequisite to its execution and delivery or performance.
ALLEGHENY POWER SERVICE CORPORATION
By
Vice President
Attest:
Secretary
AYP Energy, Inc.
By
Vice President
Attest:
Secretary
Exhibit I
Allegheny Power Service Corporation Principal Functions
In accordance with the terms and conditions of the Service Agreement
dated , 1996, Allegheny Power Service Corporation shall perform for
AYP Energy the following services as requested:
1. Provide technical support as needed to offer power marketing
services and to manage AYP Energy's interest in Fort Martin
Unit No. 1.
2. Planning and implementation of financial programs to raise the
funds required for AYP Energy, including handling arrangements
for bank borrowings and sales of securities and relationships
with investors and analysts.
3. Counsel on corporate, legal and regulatory matters and on
important contractual relationships.
4. Provide general and administrative services including, but not
limited to, the following:
a) Purchasing.
b) Customer billing and accounting.
c) Information services, including computer applications and
programming and electronic data processing.
d) Preparation of consolidated financial statements and cost,
statistical, and financial data, as required.
e) Assistance with respect to certain personnel matters,
including, but not limited to, employee benefit matters.
f) Preparation and filing of consolidated income tax returns
and following developments in federal and state taxation
regulations.
g) Administration of insurance.
h) Internal auditing.
i) Corporate security.
5. Certain other services in addition to the above as Allegheny
Power Service Corporation may be able to provide and/or AYP
Energy may require or request.
Exhibit D-4(a)
PENNSYLVANIA PUBLIC UTILITY COMMISSION
HARRISBURG, PA 17105-3265
Public meeting held June 6, 1996
Commissioners Present:
John M. Quain, Chairman
Lisa Crutchfield, Vice Chairman
John Hanger
David W. Rolka
Robert K. Bloom
Pennsylvania Public Utility Commission
v.
West Penn Power Company and AYP Capital, Inc. G-00960476
OPINION AND ORDER
BY THE COMMISSION:
On January 11, 1996, West Penn Power Company and AYP Capital, Inc., an
affiliated interest pursuant to Section 2102(b) of the Public Utility Code, 66
Pa. C.S. Section 2102(b), filed a Joint Petition for Affiliated Interest
Approval and Hybrid Exempt Wholesale Generator Approval, seeking approval of
the following transaction [summarized]:
(a) West Penn Power Company ("West Penn") and AYP Capital, Inc. ("AYP"),
are each wholly owned subsidiaries of the Allegheny Power System ("APS"),
which is a registered holding company under the Public Utility Company Holding
Act of 1935.
(b) AYP is a recently incorporated entity, formed for the purpose of,
inter alia, engaging in various unregulated activities, including the
investment in exempt wholesale generation.
(c) AYP has agreed to purchase a 50% undivided interest of Duquesne in
the Ft. Martin Generating Station, Unit No. 1. Unit No. 1 is jointly owned by
Duquesne, Monongahela Power ("Mon Power") and Potomac Edison, all public
utilities providing retail electric service to parts of the public in
Maryland, Ohio, West Virginia, and Virginia, and all [except Duquesne]
subsidiaries of APS.
(d) Mon Power has operating responsibility for the Ft. Martin Generating
Station, Unit No. 1 by virtue of an Operating Agreement dated April 30, 1965,
revised and amended by a Common Facilities Operating Agreement dated November
14, 1968.
(e) An operating agreement similar to the operating agreement for Unit
No. 1, dated December 30, 1965 governs the operation of Unit No. 2, also
operated by Mon Power. Accounting mechanisms of Unit No. 1 are identical to
those embodied in the operating agreement for Unit No. 2.
(f) After ownership of Duquesne's 50% interest in Unit No. 1 is approved
for transfer to AYP, employees of Mon Power will perform services for the
benefit of AYP, just as they formerly did for Duquesne. All services will be
performed in accordance with the operating agreements which have been in
effect.
Essentially, AYP, an affiliated interest of West Penn, desires to "step
in the shoes" of Duquesne, relative to Unit No. 1, upon its acquisition
(subject to Commission approval) of Duquesne's 50% interest.
The affiliated interest filing summarized, above, has become approved by
operation of law. The pertinent language of Section 2102(b) provides that "If
at the end of 30 days after the filing of a contract or arrangement, no order
of rejection has been entered, such contract or arrangement, whether written
or unwritten, shall be deemed, in fact and law, to have been approved."
A Secretarial Letter, dated March 12, 1996, notified the petitioning
parties that the affiliated interest portion of this filing was deemed
approved.
DISCUSSION:
The Public Utility Holding Company Act of 1935 ("PUHCA") was amended by
The Energy Policy Act of 1992 ("EPAct") to create a new category of electric
generator known as the exempt wholesale generator ("EWG"). In creating EWGs,
Congress contemplated that electric utilities might wish to take rate based
generation facilities and reclassify them as EWGs. Section 32(d) of PUHCA
describes "hybrid EWGs" as facilities which are partly owned or operated by an
EWG, and partly owned and operated by an affiliate regulated company. 15
U.S.C. Section 79z-5a(d). Certain requirements must be met before a hybrid
EWG will be approved. These requirements are set forth in Section 32(c) of
PUHCA, which provides in relevant part:
(c) STATE CONSENT FOR EXISTING RATE BASED FACILITIES -
If a rate or charge for, or in connection with, the construction
of a facility, or for electric energy produced by a facility
(other than any portion of a rate or charge which represents
recovery of the cost of a wholesale rate or charge) was in effect
under the laws of any State as of the date of enactment of this
section, in order for the facility to be considered an eligible
facility, every State commission having jurisdiction over any such
rate or charge must make a specific determination that allowing
such facility to be an eligible (1) will benefit consumers, (2) is
in the public interest, and (3) does not violate State law;...
15 U.S.C. Section 79z-5a(c).
Under the terms of the asset purchase agreement, as a condition
precedent to closing, AYP must receive certification from the Federal Energy
Regulatory Commission ("FERC") of AYP's interest in Ft. Martin Unit No. 1 as
an EWG.
Under Section 32(c) of PUHCA, as the Commission having authority over
Duquesne's rates, a portion of which included Duquesne's interest in Ft.
Martin Unit No. 1, the Commission must make the necessary findings under
Section 32(c) before FERC will certify AYP's interest in Ft. Martin Unit No. 1
as an EWG.
On February 6, 1996, FTM Energy, Inc. ("FTM"), a wholly owned subsidiary
of AYP Capital, Inc., filed an application for a determination of EWG status
with FERC (Docket No. EG96-42-000). Notice of the application was published
in the Federal Register, with comments or interventions due on or before March
1, 1996. None were filed. The application was dismissed without prejudice,
because FTM failed to include with the application a determination of the
Commission as required by PUHCA Section 32(c).
AYP states that only buyers who find the price of generation from Ft.
Martin to be economically attractive will agree to buy its output. This
should lead to increased price competition in the wholesale power market.
Increased competition in the wholesale markets ultimately benefits consumers
of power by forcing down the costs of securing generation for utilities,
municipals and cooperative, who then pass these savings on to their customers.
This state of affairs would seem to satisfy the first of the three Section
32(c) conditions.
There is a consensus opinion that a more competitive electric utility
industry in Pennsylvania is in the public interest. An EWG that is selling
wholesale power into the Pennsylvania market at competitive rates, would thus
appear to be in the public interest. This would satisfy the second of the
Section 32(c) conditions.
The Commission at Docket numbers A-110150.F0011 and P-00951001, at its
public meeting held on May 23, 1996, has approved the sale of Duquesne's
portion of Ft. Martin to AYP, and the accounting and ratemaking items
associated with the sale. It would thus appear that there is no legal
impediment to AYP's portion of Ft. Martin becoming an EWG. This would satisfy
the third and final Section 32(c) condition.
After careful consideration of the Petition before us, we are of the
opinion that the Petitioner has demonstrated that granting the requested
relief is in the public interest;
THEREFORE,
IT IS ORDERED:
1. That approval of AYP's requests in the instant Petition be, and
hereby is, granted.
2. That the Commission shall provide AYP with the attached
Secretarial Letter (Appendix A) by which AYP may comply with
certain requirements of the FERC.
3. That the above-captioned docket shall be marked closed.
BY THE COMMISSION
JOHN G. ALFORD
John G. Alford
Secretary
(Seal)
ORDER ADOPTED: June 6, 1996
ORDER ENTERED: June 6, 1996
APPENDIX A
COMMONWEALTH OF PENNSYLVANIA
PENNSYLVANIA PUBLIC UTILITY COMMISSION
P. O. BOX 3265, HARRISBURG, PA 17105-3265
In Reply Please
Refer To Our File
June 6, 1996
Federal Energy Regulatory Commission
888 First Street, N.E.
Washington, DC 20426
Re: Pennsylvania Public Utility Commission
Specific Determination Pursuant to Section 32(c) of
the Public Utility Holding Company Act of 1935
Dear Sir or Madam:
Pursuant to Section 32(c) of the Public Utility Holding Company Act of
1935, the Pennsylvania Public Utility Commission hereby determines that AYP
Capital, Inc.'s purchase of Duquesne Light Company's interest in Ft. Martin
Generating Station Unit No. 1, and the operation of same as an exempt
wholesale generator, (1) will benefit consumers, (2) is in the public
interest, and (3) does not violate state law.
By Opinion and Order of this Commission adopted June 6, 1996, we have so
advised AYP Capital, Inc. and directed that company to deliver certified
copies of said order and the instant Secretarial Letter to the Federal Energy
Regulatory Commission.
Yours truly,
JOHN ALFORD
John Alford
Secretary
Exhibit D-7(a)
UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
AYP Energy, Inc. ) Docket No. EG96 - -000
APPLICATION OF
AYP ENERGY INC. FOR DETERMINATION OF
EXEMPT WHOLESALE GENERATOR STATUS
AYP Energy, Inc. ("Applicant"), pursuant to section 32 of the Public
Utility Holding Company Act of 1935, as amended by the Energy Policy Act of
1992 ("PUHCA"), and Part 365 of the Commission's regulations thereunder, 18
C.F.R. Sections 365.1-365.7 (1995), hereby files this Application for a
determination of exempt wholesale generator ("EWG") status. A copy of the
notice of the Application suitable for publication in the Federal Register on
a 3-1/2 diskette in ASCII format (marked "notice of filing") and fourteen copies
of the Application, each including a hard copy of the draft notice of filing
attached as Exhibit A, are also enclosed. This application is a refiling of
the application previously dismissed without prejudice at FTM Energy, Inc.,
Docket No. EG96-42-000 (issued March 27, 1996). This application differs in
two respects: first, FTM Energy, Inc.'s name has been changed to AYP Energy,
Inc., and second, the order of the Pennsylvania Public Utility Commission
approving the hybrid EWG status of Applicant under subsection 32(d) of PUHCA
is attached hereto as Exhibit B.
Applicant hereby states its recognition of the requirement set forth at
18 C.F.R. Section 365.7 to notify the Commission within 60 days of "any
material change in facts that may effect" Applicant's eligibility for EWG
status under PUHCA section 32 and to either apply for a new determination or
to file a written explanation of why the material change in facts does not
affect
Applicant's status (or to inform the Commission that Applicant no longer seeks
to maintain EWG status). In support of this Application, Applicant hereby
states:
SERVICE
Applicant has served a copy of this Application on the Securities and
Exchange Commission and the Pennsylvania Public Utility Commission and has
provided copies to the state utility commissions of Maryland, Ohio, Virginia
and West Virginia.
IDENTIFICATION OF THE
APPLICANT AND THE ELIGIBLE
FACILITY
Applicant is a corporation organized under the laws of the state of
Delaware. Applicant is a wholly owned subsidiary of AYP Capital, Inc.
("AYP"), which itself is a wholly owned subsidiary of Allegheny Power System,
Inc. ("APS"), a registered electric utility holding company. Applicant's
business address is c/o Allegheny Power Service Corporation, 800 Cabin Hill
Drive, Greensburg, PA 15601 Attn: Theresa J. Colecchia.
Applicant will own directly the eligible facility as described herein.
At the present time, Applicant has no plans to engage in any activities other
than to exclusively own the eligible facility and to sell the electrical
output of the facility exclusively at wholesale to willing buyers within the
continental United States. In addition, Applicant intends to engage in other
previously authorized activities deemed incidental or necessary to the
involvement of an EWG in wholesale electric generation, including (a) selling
power from sources not owned by the Applicant, (b) entering into contracts for
firm and interruptible electrical transmission capacity, solely to the extent
necessary to effect sales at wholesale of electric energy generated by the
Applicant or others, (c)the reassignment (resale) of excess transmission
capacity solely to the extent that such excess transmission capacity
originally was obtained for the purpose of effecting a specific wholesale sale
of electric energy, (d) contracting for deliveries of fuel to a third-party
generating facility only in such amounts as are necessary for the third-party
owner or operator of such facility to generate the electric power and energy
that in turn will be delivered by such third-party to the Applicant for sale
by the Applicant at wholesale and (e) brokering transactions that are limited
to the essential business elements that are necessary for the Applicant to
effect a sale of electrical energy at wholesale in competitive power markets,
as described and authorized in CNG Power Services Corporation, 71 FERC 61,026
(1995), 71 FERC Paragraph 61,378 (June 21, 1995), and Southern Energy
Marketing, Inc., 71 FERC Paragraph 61, 376 (June 21, 1995).
The eligible facility is an undivided 50% interest in Unit No. 1 ("Ft.
Martin Unit 1"), an operating steam-electric generating unit, including an
undivided 25% interest in the associated facilities common to such unit and a
second unit located at the Ft. Martin Power Station. The eligible facility
also includes an associated undivided 50% interest in Ft. Martin Unit 1's main
transformers. Ft. Martin Unit 1 is located in West Virginia on the
Monongahela River between Morgantown, West Virginia and Point Marion,
Pennsylvania. The undivided 50% interest in Ft. Martin Unit 1 that comprises
the eligible facility is currently owned by Duquesne Light Company
("Duquesne"), a Pennsylvania public utility not associated or affiliated with
APS (or the Applicant). Duquesne has entered into an Asset Purchase Agreement
(dated November 28, 1995) with AYP, pursuant to which Duquesne will sell on or
before December 31, 1996 all of its 50% undivided ownership interest in Ft.
Martin Unit 1. AYP will assign the Asset Purchase Agreement to AYP Energy,
Inc. The remainder of Ft. Martin Unit 1, of which the eligible facility is a
portion, is owned by Monongahela Power Company ("MPC") and The Potomac Edison
Company ("PEC"), two of the three wholly owned electric operating subsidiaries
of APS.
COMPLIANCE WITH SECTION 365.3 (a)
In addition to the general information provided above, to ensure
compliance with subpart (a) of Section 365.3, Applicant states:
1. A sworn statement by a representative legally authorized to bind
Applicant attesting to all facts and representations presented in this
Application to demonstrate Applicant's eligibility for EWG status is attached
hereto.
2. Applicant represents that upon acquisition of the eligible facility,
Applicant will be exclusively in the business of owning all of the eligible
facility and selling electric energy at wholesale. Applicant does not seek
any exception for foreign sales of power at retail.
3. The eligible facility, when acquired by AYP Energy Inc. from
Duquesne, will be, as described above and discussed below, a portion of an
already operating unit, the remainder of which is currently owned by MPC and
PEC and operated by MPC. Thus, the entire facility is a "hybrid" facility as
defined by PUHCA subsection 32(d). All components of the eligible facility
will be conveyed pursuant to the November 28, 1995 Asset Purchase Agreement.
The associated common facilities include standard generating station equipment
and structures, such as cooling systems, coal handling facilities, oil tanks,
controls, machine and service shops, accessory electrical equipment, stores
and miscellaneous power plant equipment. The only related "transmission
interconnection components" is Duquesne's undivided 50% interest in Ft. Martin
Unit 1's main transformers. Duquesne has requested authority to transfer
these assets in a section 203 application filed at Docket No. EC96-15-000
(filed March 28, 1996). These transformers, like the rest of the station
equipment, are currently operated on behalf of the joint owners (Duquesne, MPC
and PEC) by MPC, which will continue to operate the transformers after the
sale to AYP Energy Inc. of Duquesne's interest. The operating agreement was
accepted for filing by the Commission and made effective in Allegheny Power
Service Corporation, Docket No. ER94-390-000, by letter order dated December
19, 1994.
4. Upon completion of the transactions contemplated by the Asset
Purchase Agreement, there will be no lease arrangements involving the eligible
facility (including the interest in the common facilities or the main
transformers included in the eligible facility), or any other portion of Ft.
Martin Unit 1, or involving its main transformers or associated common
facilities.
5. Applicant is an associate company, as defined by PUHCA subsection
2(a)(10), of MPC, PEC and West Penn Power Company ("WPPC"), the latter being
the third electric utility company wholly owned by APS. The retail rates of
MPC, PEC and WPPC are regulated by the states of Ohio, West Virginia and
Maryland, and by the Commonwealths of Virginia and Pennsylvania.
COMPLIANCE WITH SECTION 365.3(b)
1. Duquesne's 50% undivided interest in Ft. Martin Unit 1 is included,
and was included on October 24, 1992, in Duquesne's retail rate base.
Accordingly, with respect to the portion of Ft. Martin Unit 1 that is the
eligible facility,1 there was in effect as of October 24, 1992 under the laws
of Pennsylvania "a [retail] rate or charge for . . . electric energy produced
by" the eligible facility. Therefore, Section 365.3(b) requires (although the
applicable retail rate is for a non-affiliated[1] public utility) AYP Energy
Inc. to provide the Commission with "a specific determination" from the
Commonwealth of Pennsylvania "that allowing the facility to be an eligible
facility: (1) Will benefit consumers, (2) Is in the public interest, and (3)
Does not violate State law." This required approval was obtained from the
Pennsylvania Public Utility Commission on June 6, 1996. A copy of this order
is attached hereto as Exhibit B.
WHEREFORE, for the reasons stated above and upon the grounds and
representations set forth, Applicant requests the Commission to determine that
Applicant is an EWG under section 32 of PUHCA.
Respectfully submitted,
AYP ENERGY INC.
By: THERESA J. COLECCHIA
Theresa J. Colecchia, Esq.
800 Cabin Hill Drive
Greensburg, Pennsylvania 15601
(412) 838-6677
Dated: June 6, 1996
[1] PUHCA subsection 32(a)(2) provides that for purposes of defining an
eligible facility, the term "shall not include any facility for which consent
is required under subsection (c) if such consent has not been obtained" and
further that "the term 'facility' may include a portion of a facility subject
to the limitations of subsection (d) . . . ."
SWORN STATEMENT
Pursuant to 18 C.F.R. Section 365.3(1), Kenneth J. Blasko, duly sworn,
states that he is legally authorized to bind AYP Energy, Inc. and attests that
he has read the foregoing Application, that he knows the contents thereof,
that the same, including all facts and representations presented therein, are
true to the best of his knowledge, belief and understanding.
KENNETH J. BLASKO
Kenneth J. Blasko
Assistant Vice-President
SUBSCRIBED AND SWORN to before me on this 6th day of June, 1996.
GLORIA J. CAVADA
[Name of Notary]
My Commission expires
October 16, 1997
NOTICE OF FILING
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
AYP Energy, Inc. ) Docket No. EG96- -000
NOTICE OF APPLICATION FOR COMMISSION DETERMINATION
OF EXEMPT WHOLESALE GENERATOR STATUS
(June , 1996)
On June , 1996, AYP Energy, Inc. ("Applicant") filed with the Federal
Energy Regulatory Commission an application for determination of exempt
wholesale generator status pursuant to Part 365 of the Commission's
regulations.
Applicant is a corporation organized under the laws of the state of
Delaware. Applicant is a wholly owned subsidiary of AYP Capital, Inc.
("AYP"), which itself is a wholly owned subsidiary of Allegheny Power System,
Inc. ("APS"), a registered electric utility holding company. Applicant's
business address is c/o Allegheny Power Service Corporation, 800 Cabin Hill
Drive, Greensburg, PA 15601 (Attn: Theresa Colecchia).
The eligible facility consists primarily of a 50 percent undivided
interest in Unit No. 1 of the Fort Martin Power Station, an operating steam-
electric generating unit, and associated portion of Ft. Martin Unit 1's main
transformers. Ft. Martin Unit 1 is located in West Virginia on the
Monongahela River between Morgantown, West Virginia and Point Marion,
Pennsylvania. The portion of Ft. Martin Unit 1 that is the eligible facility
is currently owned by Duquesne Light Company ("Duquesne"), a Pennsylvania
public utility not affiliated with APS; however, Duquesne has entered into an
Asset Purchase Agreement (dated November 28, 1995) with AYP, pursuant to which
Duquesne will sell on or before December 31, 1996 it undivided ownership
interest in Ft. Martin Unit 1 (including its interest in the transformers) to
AYP, which will assign the Asset Purchase Agreement to AYP Energy, Inc. The
remainder of the facility of which the eligible facility is a portion is owned
by Monongahela Power Company ("MPC") and The Potomac Edison Company ("PEC"),
two of the three wholly owned electric operating subsidiaries of APS.
Any person desiring to be heard concerning the application for exempt
wholesale generator status should file a motion to intervene or comments with
the Federal Energy Regulatory Commission, 888 First Street, N.E., Washington,
D.C. 20426, in accordance with Sections 385.211 and 385.214 of the
Commission's Rules of Practice and Procedure. The Commission will limit its
consideration of comments to those that concern the adequacy or accuracy of
the
application. All such motions or comments should be filed on or before ,
1996, and must be served on the applicant. Any person wishing to become a
party must file a motion to intervene. Copies of this filing are on file with
the Commission and are available for public inspection.
Lois D. Cashell
Secretary
