<PAGE>
___________________________________
:
IN THE MATTER OF :
:
ALLEGHENY POWER SYSTEM, INC. et. al. :
: CERTIFICATE
File No. 70-8411 : PURSUANT TO RULE 24
: FOR THE QUARTER ENDED
(Public Utility Holding : MARCH 31, 1997
Company Act of 1935) :
___________________________________ :
As of March 31, 1997, Allegheny Power System, Inc. ("APS") has
made capital contributions to AYP Capital, Inc. ("AYP Capital") and its
subsidiaries totaling $34,308,324. See attached consolidated financial
statements for the quarter ended March 31, 1997. During the first 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 APS's core business. Other specific
activities performed by AYP Capital during the first 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.
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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. No new investments were made in
the first quarter. As of the end of the first quarter of 1997,
AYP Capital has invested $1,787,566 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
AYP Capital received SEC approval to sell and market heat pumps.
It performed preliminary development activities and began selling
and marketing heat pumps.
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 APS on behalf of AYP
Capital or its subsidiaries
APS provided 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.
III. Services Provided by AYP Capital to Associate Companies
AYP Capital did not provide any services to associate companies
during the first quarter of 1997.
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IV. Factoring Activities
AYP Capital did not perform any activities associated with the
factoring of accounts receivable.
ALLEGHENY POWER SYSTEM, INC.
By /s/ Thomas K. Henderson
Thomas K. Henderson
Vice President
AYP CAPITAL, INC.
By /s/ Thomas K. Henderson
Thomas K. Henderson
Counsel
Dated: May 29, 1997
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AYP Capital, Inc.
CONSOLIDATED BALANCE SHEET
As of March 31, 1997
Assets
Property, plant, and equipment:
At original cost 175,738,516
Accumulated depreciation (1,332,000)
174,406,517
Investments and other assets:
Nonutility investments 2,871,429
2,871,429
Current assets:
Cash and temporary cash investments 6,634,565
Accounts receivable:
Electric service 4,635,269
Other 190,316
Accts. Receivable - Affiliates 20,148
Materials and supplies--at average cost:
Operating and construction 2,386,941
Fuel 2,671,156
Other 4,661,105
21,199,501
Deferred charges:
Other 339,368
339,368
Total Assets 198,816,814
Capitalization and Liabilities
Capitalization:
Common stock 1,000
Other paid-in capital 34,307,324
Retained earnings (6,703,840)
27,604,484
Preferred stock:
Long-term debt of subsidiaries 160,000,000
Long-term debt of subsidiaries 0
187,604,484
Current liabilities:
Accounts payable - Affil. 2,704,553
Accounts payable - Other 3,101,166
Taxes accrued:
Federal and state income 49,022
Other 1,085,050
Interest accrued 1,777,867
Payrolls Accrued 0
Other 522,227
9,239,884
Deferred credits and other liabilities:
Deferred income taxes 1,705,694
Other 266,752
1,972,446
Total Capitalization and Liabilities 198,816,814
Unaudited
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AYP CAPITAL
CONSOLIDATED STATEMENT OF INCOME
FOR TWELVE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
QTR YTD 12MOS
<S> <C> <C> <C>
ELECTRIC OPERATING REVENUES 12,287,673 12,287,673 14,369,402
OPERATING EXPENSES:
Operation:
Fuel 5,791,352 5,791,352 6,518,851
Purchased Power & Exchange 3,252,549 3,252,549 4,587,133
Other 889,847 889,847 2,016,456
Transmission & Distribution 801,830 801,830 1,060,149
Cust. Accts & Services 63,495 63,495 150,670
Administrative & General 1,086,530 1,086,530 1,946,006
Total Operation & Maintenance 11,885,602 11,885,602 16,279,265
Depreciation 1,316,853 1,316,853 1,329,848
Taxes other than income taxes 1,095,319 1,095,319 1,861,764
Federal and state income taxes (1,899,003) (1,899,003) (4,079,164)
Total Operating Expenses 12,398,771 12,398,771 15,391,714
Operating Income (111,099) (111,099) (1,022,312)
OTHER INCOME AND DEDUCTIONS:
Other income, net 13,237 13,237 (145,899)
Total Other Income and Deductio 13,237 13,237 (145,899)
Income Before Interest Charges and
Preferred Dividends (97,862) (97,862) (1,168,212)
INTEREST CHARGES AND PREFERRED DIVIDENDS:
Interest on other long-term obligations 2,712,000 2,712,000 4,550,133
Other interest 13,350 13,350 13,366
Total Interest Charges and
Preferred Dividends 2,725,350 2,725,350 4,563,499
Consolidated Net Income (2,823,212) (2,823,212) (5,731,711)
</TABLE>
Unaudited
