___________________________________
:
IN THE MATTER OF :
:
ALLEGHENY ENERGY, INC. et. al. :
: CERTIFICATE
File No. 70-8411 : PURSUANT TO RULE 24
: FOR THE QUARTER ENDED
(Public Utility Holding : SEPTEMBER 30, 1997
Company Act of 1935) :
_________________________________ :
As of September 30, 1997, Allegheny Energy, Inc.
(Allegheny) has made capital contributions to AYP Capital, Inc.
("AYP Capital") and its subsidiaries totaling $39,368,573. See
attached consolidated financial statements for the quarter ended
September 30, 1997. During the third quarter of 1997, AYP
Capital performed studies and completed preliminary development
activities in connection with the ownership of companies in the
areas of emerging technologies closely related to Allegheny's core
business. Other specific activities performed by AYP Capital
during the third quarter of 1997 are shown below.
I. Description of Activities
A. Consulting and Engineering Services
AYP Capital provided engineering, consulting,
procurement and construction services to nonaffiliated
entities and completed development and marketing
activities associated with the provision of such
services to nonaffiliated entities.
B. Energy Management Services - APS Cogenex
As previously reported, AYP Capital and EUA-Cogenex
agreed to cease joint marketing activities for energy
management services under the terms of their joint
venture agreement for APS Cogenex. Pending resolution
of outstanding jobs, the APS Cogenex joint venture
continues to exist.
AYP Capital developed energy management products and
services to be offered to customers in and around the
service territory of its affiliates.
<PAGE>
C. EWGs and FUCOs
AYP Capital, through the Latin American Energy and
Electricity Fund I, L.P. ("FondElec"), a limited
partnership formed to invest in and develop electric
energy opportunities in Latin America, continued to
investigate FUCO investments. One new investment was
made in the third quarter. AYP Capital purchased an
interest in a Brazilian electric company through its
participation in the Latin American Energy and
Electricity Fund. As of the end of the third quarter
of 1997, AYP Capital has invested $4,915,339 in
FondElec.
AYP Energy continues as an exempt wholesale generator
("EWG") and power marketer.
D. Real Estate Activities
No new activities.
E. Insider Heat Pump Distributorship
During the third quarter, AYP Capital, Inc. (AYP
Capital) continued its activities in product
development.
F. HVAC and Appliance Warranties/Power Quality Devices
On April 24, 1997, AYP Capital received SEC approval
to engage in the sale and marketing of HVAC (Heating,
Ventilation and Air Conditioning) appliance warranties
and power quality devices.
II. Guarantees or assumption of liabilities by Allegheny on behalf
of AYP Capital or its subsidiaries
Allegheny continues to provide a Support Agreement to AYP
Energy in connection with a $15 million discretionary
line of credit for AYP Energy for the issuance of
standby letters of credit for the benefit of AYP
Energy's activities.
<PAGE>
III. Services Provided by AYP Capital to Associate Companies
AYP Capital did not provide any services to associate
companies during the third quarter of 1997.
IV. Factoring Activities
AYP Capital did not perform any activities associated
with the factoring of accounts receivable in the third
quarter of 1997.
ALLEGHENY ENERGY, INC.
By /s/ Thomas K. Henderson
Thomas K. Henderson
Vice President
AYP CAPITAL, INC.
By /s/ Thomas K. Henderson
Thomas K. Henderson
Counsel
Dated: November 26, 1997
<PAGE>
AYP Capital, Inc.
CONSOLIDATED BALANCE SHEET
As of September 30, 1997
Assets
Property, plant, and equipment:
At original cost 175,038,454
Accumulated depreciation (4,983,875)
170,054,579
Investments and other assets:
Nonutility investments 6,403,149
6,403,149
Current assets:
Cash and temporary cash investments 8,175,611
Accounts receivable:
Electric service 7,253,615
Other 1,642
Accts. Receivable - Affiliates 352,564
Materials and supplies--at average cost:
Operating and construction 2,491,782
Fuel 2,446,476
Other 3,531,655
24,253,346
Deferred charges:
Other 492,775
492,775
Total Assets 201,203,848
Capitalization and Liabilities
Capitalization:
Common stock 1,000
Other paid-in capital 39,368,573
Retained earnings (14,228,887)
25,140,686
Preferred stock:
Long-term debt of subsidiaries 160,000,000
Long-term debt of subsidiaries 0
185,140,686
Current liabilities:
Accounts payable - Affil. 4,848,975
Accounts payable - Other 3,521,620
Taxes accrued:
Federal and state income 632,459
Other 1,969,884
Interest accrued 1,838,133
Payrolls Accrued 0
Other 390,566
13,201,638
Deferred credits and other liabilities:
Deferred income taxes 2,557,570
Other 303,954
2,861,524
Total Capitalization and Liabilities 201,203,848
Unaudited
<PAGE>
AYP CAPITAL
CONSOLIDATED STATEMENT OF INCOME
FOR TWELVE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
QTR YTD 12MOS
<S> <C> <C> <C>
ELECTRIC OPERATING REVENUES 28,334,752 52,872,630 54,954,359
OPERATING EXPENSES:
Operation:
Fuel 5,915,550 17,796,907 18,524,406
Purchased Power & Exchange 17,129,328 22,739,647 24,074,231
Other 1,867,252 3,678,912 4,805,522
Transmission & Distribution 1,082,251 2,868,850 3,127,170
Cust. Accts & Services 1,581,474 1,750,813 1,837,988
Administrative & General 1,780,473 4,611,159 5,470,634
Total Operation & Maintenance 29,356,328 53,446,288 57,839,951
Depreciation 2,305,433 4,948,966 4,960,239
Taxes other than income taxes 1,290,542 3,741,772 4,507,334
Federal and state income taxes (2,834,992) (6,826,539) (8,754,118)
Total Operating Expenses 30,117,310 55,310,488 58,553,406
Operating Income (1,782,558) (2,437,858) (3,599,047)
OTHER INCOME AND DEDUCTIONS:
Other income, net 144,031 335,128 511,358
Total Other Income and Deductio 144,031 335,128 511,358
Income Before Interest Charges and
Preferred Dividends (1,638,527) (2,102,730) (3,087,689)
INTEREST CHARGES AND PREFERRED DIVIDENDS:
Interest on other long-term obligations 2,772,267 8,226,400 10,064,533
Other interest (2,737) 19,130 19,145
Total Interest Charges and
Preferred Dividends 2,769,530 8,245,530 10,083,679
Consolidated Net Income (4,408,056) (10,348,260) (13,171,368)
</TABLE>
Unaudited
