<PAGE>
File No. 70-7888
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
POST-EFFECTIVE AMENDMENT NO. 14
TO
FORM U-1
APPLICATION OR DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Allegheny Energy, Inc. Monongahela Power Company
10435 Downsville Pike 1310 Fairmont Avenue
Hagerstown, MD 21740 Fairmont, WV 26554
Allegheny Power Service Corporation The Potomac Edison Company
800 Cabin Hill Drive 10435 Downsville Pike
Greensburg, PA 15601 Hagerstown, MD 21740
Allegheny Generating Company West Penn Power Company
10435 Downsville Pike 800 Cabin Hill Drive
Hagerstown, MD 21740 Greensburg, PA 15601
(Name of company or companies filing this statement
and addresses of principal executive offices)
Allegheny Energy, Inc.
10435 Downsville Pike
Hagerstown, MD 21740
(Name of top registered holding company parent of
each applicant or declarant)
Thomas K. Henderson, Esquire
Vice President
Allegheny Energy, Inc.
10435 Downsville Pike
Hagerstown, MD 21740
(Name and address of agent for service)
<PAGE>
Applicants hereby amend their Application or Declaration on
Form U-1 as follows:
1. Applicants hereby amend Item 6. Exhibits and Financial
Statements by filing herewith the following:
(a) Exhibits
D-1(c) Application to the Pennsylvania Public Utility
Commission.
D-2(c) Application to the Virginia State Corporation
Commission.
D-3(c) Application to the West Virginia Public Service
Commission.
D-5(c) Order of the Virginia State Corporation Commission.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned Applicants have duly caused this
statement to be signed on their behalf by the undersigned thereunto duly
authorized.
ALLEGHENY ENERGY, INC.
BY /s/ Carol G. Russ
CAROL G. RUSS
COUNSEL
ALLEGHENY POWER SERVICE CORPORATION
BY /s/ Carol G. Russ
CAROL G. RUSS
COUNSEL
ALLEGHENY GENERATING COMPANY
BY /s/ Carol G. Russ
CAROL G. RUSS
COUNSEL
3
<PAGE>
MONONGAHELA POWER COMPANY
BY /s/ Carol G. Russ
CAROL G. RUSS
COUNSEL
THE POTOMAC EDISON COMPANY
BY /s/ Carol G. Russ
CAROL G. RUSS
COUNSEL
WEST PENN POWER COMPANY
BY /s/ Carol G. Russ
CAROL G. RUSS
COUNSEL
Dated: December 18, 1997
<PAGE>
BEFORE THE
PENNSYLVANIA PUBLIC UTILITY COMMISSION
In Re: Application of West Penn Power )
Company Pursuant to 66 Pa. C.S. 2102 )
for Prior Written Approval of the ) Docket No.: G-00970583
Allegheny Power System Money Pool as a )
Contract Among West Penn Power Company )
and its Affiliated Interests )
NOW COMES West Penn Power Company ("West Penn") and
requests approval pursuant to Section 2102 of the Public Utility
Code (66 Pa. C.S. 2102) of changes in an affiliated interest
agreement, known as the Allegheny Power System Money Pool.
1. The name and address of Applicant is West Penn
Power Company ("West Penn"), 800 Cabin Hill Drive, Greensburg,
Pennsylvania 15601.
2. The names and address of West Penn's attorneys are
John L. Munsch, Michael D. McDowell, and David L. Williams, 800
Cabin Hill Drive, Greensburg, Pennsylvania.
3. West Penn is a public utility and electric
distribution company, duly incorporated in Pennsylvania on March
1, 1916, which serves all or portions of 23 counties in
southwestern and central Pennsylvania.
<PAGE>
4. The Potomac Edison Company ("Potomac Edison"),
Monongahela Power Company ("Mon Power"), and Allegheny Generating
Company ("AGC") are affiliates of West Penn.
5. Potomac Edison, Mon Power, West Penn and AGC are
wholly owned subsidiaries of Allegheny Power System, Inc.,<1> a
registered public utility holding company.
6. The Allegheny Power System Money Pool (the Money
Pool) is an internal financing arrangement in which the excess
funds of some participants are used to satisfy the short-term
borrowing needs of other participants. Participants in the Money
Pool are Allegheny Power System, Inc., Mon Power, Potomac Edison,
West Penn, and AGC. AGC may only borrow from the Money Pool, and
Allegheny Power System, Inc., may only lend to the Money Pool.
Daily balancing of each Money Pool participant and the overall
administration of the Money Pool is performed by Allegheny Power
Service Corporation, the agent for the participants. The
operation of the Money Pool is designed to match, on a daily
basis, the available cash and short-term borrowing requirements
of the participants, thereby minimizing the need to borrow funds
in external short-term capital markets. Any excess funds from
the Money Pool are invested according to guidelines outlined in
the Money Pool Agreement. Unregulated affiliates may not
participate in the Money Pool.
<1> Allegheny Power System, Inc., changed its name to Allegheny Energy, Inc.,
through by-law change in September of 1997.
2
<PAGE>
A copy of the revised Allegheny Power System Money Pool
Agreement is attached hereto as Exhibit No. 1
7. West Penn has previously received Commission
approval to participate in the Money Pool by Commission Order at
Docket No. G-910274 entered November 7, 1991. A copy of said
Order is attached as Exhibit No. 2.
8. West Penn and its affiliates have changed certain
provisions of the Money Pool Agreement. Under the prior
agreement, interest income and expense were calculated "using the
previous day's Fed Funds Effective Interest Rate as quoted by the
Federal Reserve Bank of New York." A revision has been made
which adds to the end of that sentence: "as long as this rate is
at least four basis points lower than the previous day's seven-
day commercial paper rate as quoted by the same source. Whenever
the Fed Funds rate is not at least four basis points lower than
the seven-day commercial paper rate, then the seven-day
commercial paper rate minus four basis points should be used."
The second change to the Money Pool Agreement is that
interest income resulting from external investments will be
accrued daily instead of booked upon receipt. In addition,
interest income will be allocated to members of the Money Pool on
a basis equal to their pro rata share of net contributions in the
Pool throughout the month, instead of on the net contributions on
the day the investment was placed. Also added to the agreement
was a sentence that the allocation of interest income will be
settled on a cash basis on the last business day of each month.
3
<PAGE>
9. West Penn submits that the cost of the proposed
borrowings through the Money Pool will generally be more
favorable to the borrowing participants than the comparable costs
of external short-term borrowings and that the yield to the
participants contributing available funds to the Money Pool will
generally be higher than the typical yield on short-term
investments.
WHEREFORE West Penn Power Company requests that the
Pennsylvania Public Utility Commission enter an order granting
its approval under Section 2102 of the Public Utility Code for
West Penn's continued participation with its affiliates in the
Money Pool Agreement as amended and attached hereto as Exhibit
No. 1.
Respectfully submitted,
Date: October 16, 1997 By: /s/ John L. Munsch
John L. Munsch
Attorney for
WEST PENN POWER COMPANY
800 Cabin Hill Drive
Greensburg, PA 15601
(412) 838-6210
4
<PAGE>
BEFORE THE
PENNSYLVANIA PUBLIC UTILITY COMMISSION
In Re: Application of West Penn Power )
Company Pursuant to 66 Pa. C.S. 2102 )
for Prior Written Approval of the ) Docket No.: G-00970583
Allegheny Power System Money Pool as a )
Contract Among West Penn Power Company )
and its Affiliated Interests )
CERTIFICATE OF SERVICE
I hereby certify that on the 16th day of October 1997,
a copy of the foregoing was served via first-class mail, postage
prepaid, upon the following
Office of Consumer Advocate
1425 Strawberry Square
Harrisburg, PA 17120
Office of Small Business Advocate
Suite 1102, Commerce Building
300 North Second Street
Harrisburg, PA 17101
/s/ John L. Munsch
John L. Munsch
<PAGE>
EXHIBIT NO. 1
Exhibit No. 1 was previously filed as "Exhibit B" to Post-
Effective Amendment No. 12 on September 17, 1997.
<PAGE>
EXHIBIT NO. 2
PENNSYLVANIA
PUBLIC UTILITY COMMISSION
Harrisburg, PA 17120
Public Meeting held November 7, 1991
Commissioners Present:
William H. Smith, Chairman
Joseph Rhodes, Jr., Vice-Chairman
Wendell F. Holland
David W. Rolka
G-910274
Affiliated Interest Agreement among West Penn
Power Company, Allegheny Power System, Inc.,
Allegheny Power Service Corporation, Allegheny
Generating Company, Monongahela Power Company
and the Potomac Edison Company setting forth
the terms and conditions relative to participation
in a System Money Pool.
O R D E R
BY THE COMMISSION:
On September 23, 1991, West Penn Power Company (West Penn)
filed for approval pursuant to Chapter 21 of the Pennsylvania
Public Utility Code, 66 Pa. C.S.
2101 et seq., an agreement among West Penn, its parent,
Allegheny Power Systems, Inc. (Allegheny Power) , and four non-
jurisdictional subsidiaries of Allegheny Power. West Penn
extended the statutory consideration period to November 8, 1991.
The proposed agreement is designed to govern the operation
of a System Money Pool to be administered by Allegheny Power
Service Corporation (APSC). The Pool will allow surplus funds
for one or more of the participants to be loaned on a short-term
basis to one or more participants having a temporary need for
additional funds, thus reducing the participants' external short-
term borrowing requirements. The interest rate will vary daily
and will be equal to the Federal Funds Effective Rate. That rate
is generally lower than West Penn's external short-term borrowing
costs, and higher than the rate on the Treasury Bills the utility
employs for the investment of excess cash. Cross-subsidization
of interest costs through differences in credit quality is not an
issue since all the participants have the same commercial-paper
credit rating.
<PAGE>
The Commission has determined that the proposed agreement
concerning a System Money Pool appears to be reasonable and
consistent with the public interest and that the agreement should
be approved; THEREFORE,
IT IS ORDERED:
That the agreement among West Penn Power Company and its
affiliates concerning a System Money Pool be, and hereby is,
approved.
BY THE COMMISSION
/s/ Jerry Rich
Jerry Rich
Secretary
(SEAL)
ORDER ADOPTED: November 7, 1991
ORDER ENTERED: November 7, 1991
2
<PAGE>
COMMONWEALTH OF PENNSYLVANIA )
) ss:
COUNTY OF WESTMORELAND )
C. S. AULT, being duly sworn according to law, deposes and
says that he is Vice President, West Penn Power Company, that he
makes this affidavit on its behalf being authorized to do so; and
that the facts set forth in the foregoing Application are true
and correct to the best of his knowledge, information and belief.
/s/ C. S. Ault
C. S. Ault
Sworn to and subscribed before me
this 16th day of October 1997.
/s/ Deborah A. Zawelensky
Notary Public
Exhibit D-2(c)
STATE CORPORATION COMMISSION
OF VIRGINIA
Application of The Potomac Edison Company, *
dba Allegheny Power for Continuing * Case No. PUF97___
Approval of a Money Pool Agreement Among *
Affiliated Interests
APPLICATION FOR CONTINUING APPROVAL OF MONEY POOL AGREEMENT
Pursuant to Chapter 4 of Title 56 of the Code of
Virginia, The Potomac Edison Company, dba Allegheny Power
("AP") applies for continuing Commission approval of a Money
Pool Agreement among AP and its affiliates in the Allegheny
Power System. In support for said request, AP respectfully
states as follows:
1. AP is a public service company incorporated under
the laws of Virginia and Maryland and is qualified to
transact business as a foreign corporation in West Virginia
and Pennsylvania. It provides electric service in fourteen
northwestern Virginia counties as well as in adjoining areas
of West Virginia and Maryland.
2. AP's principal office and place of business is
located at 10435 Downsville Pike, Hagerstown, Maryland 21740-
1766.
3. The Allegheny Power System Money Pool (the Money
Pool) is a contract among affiliated Allegheny Power System
companies. It is an internal financing facility in which the
excess funds of some participants are used to satisfy the
short term borrowing needs of other participants.
Participants in the Money Pool are AP, West Penn Power
Company, Monongahela Power Company, Allegheny Generating
Company ("AGC") and Allegheny Power System, Inc. ("APS,
Inc."). AGC may only borrow from the Money Pool, and APS,
Inc. may only lend to the Money Pool. Daily balancing of
each Money Pool participant and the overall administration
of the Money Pool is performed by
<PAGE>
Allegheny Power Service
Corporation, the agent for the participants. The operation
of the Money Pool is designed to match, on a daily basis,
the available cash and short-term borrowing requirements of
the participants, thereby minimizing the need to borrow
funds in the external short-term capital markets. Any excess
funds from the Money Pool are to be invested according to
guidelines outlined in the Money Pool Agreement. No
unregulated affiliates can participate in the Money Pool.
4. Applicant has previously received Commission
approval to participate in the Money Pool in Case Nos.
PUF910006 and PUF960004. The Commission's April 29, 1996
order in Case No. PUF960004 provides that the Applicant is
to seek subsequent approval from the Commission whenever the
terms and conditions of the Money Pool Agreement change.
5. Applicant and its affiliates have changed certain
terms and provisions of the Money Pool Agreement. The
following changes have been made:
Under the prior agreement, interest income and expense
were calculated "using the previous day's Fed Funds
Effective Interest Rate as quoted by the Federal Reserve
Bank of New York." A revision has been made which adds to
the end of that sentence: "as long as this rate is at least
four basis points lower than the previous day's seven-day
commercial paper rate as quoted by the same source. Whenever
the Fed Funds rate is not at least four basis points lower
than the seven-day commercial paper rate, then the seven-day
commercial paper rate minus four basis points should be
used."
The second change to the Money Pool Agreement is that
interest income resulting from external investments will be
accrued daily instead of booked upon receipt. In addition,
interest income will be allocated to members of the Money
Pool on a basis equal to their pro rata share of net
contributions in the Pool throughout the month,
<PAGE>
instead of on the net contributions on the day the investment was
placed. Also added to the agreement was a sentence that the
allocation of interest income will be settled on a cash
basis on the last business day of each month.
A copy of the revised Allegheny Power System Money Pool
Agreement is attached hereto as Exhibit No. 1.
6. AP believes that the cost of the proposed
borrowings through the Money Pool will generally be more
favorable to the borrowing participants than the comparable
costs of external short-term borrowings and that the yield
to the participants contributing available funds to the
Money Pool will generally be higher than the typical yield
on short-term investments.
Wherefore, for the reasons set forth herein, AP
requests that the Commission pass an order granting its
approval under Chapter 4 of Title 56 of the Virginia Code to
AP's continued participation with its affiliates in the
Money Pool Agreement as amended and attached hereto as
Exhibit No. 1.
Dated this 7th day of October, 1997
The Potomac Edison Company
dba Allegheny Power
By: /s/ T. K. Henderson
T. K. Henderson, Vice President
<PAGE>
Attest:
/s/ Eileen M. Beck
Eileen M. Beck, Assistant Secretary
/s/ Philip J. Bray
Philip J. Bray, Esq.
The Potomac Edison Company Building
10435 Downsville Pike
Hagerstown, Maryland 21740-1766
(301) 790-6283
<PAGE>
EXHIBIT NO. 1
Exhibit No. 1 was previously filed as "Exhibit B" to
Post-Effective Amendment No. 12 on September 17, 1997.
<PAGE>
Transaction Summary
Application for Continuing Approval
of Allegheny Power System
Money Pool Agreement
1. Describe, in detail, the affiliate relationship among
the parties involved.
See Paragraphs 1-6 of PE's October 10, 1991 application
in Case No. PUF910006 attached.
2. Describe the conditions and terms of the agreement,
including rights of parties to cancel and renewability.
The Money Pool document is Exhibit No. 1 to the
application in this case. It has no specified term. It
is subject to cancellation upon the mutual agreement of
the parties.
3. Why is the utility company providing the
services/goods? What are the current or prior
arrangements? Provide specific details.
The Money Pool is an internal financing facility in
which excess funds of some participants are used to
satisfy the short term borrowing needs of others. Using
the Money Pool in place of settling intercompany
billings is more efficient and has resulted in higher
returns for investing members and lower costs for
borrowing members. The Money Pool has been in effect
and has worked successfully since the Commission's
approval dated January 24, 1992 in Case No. PUF910006.
The Commission further approved the Money Pool by Order
dated April 29, 1996 in Case No. PUF960004.
4. Show that the cost of the services/good(s) is at least
comparable to the cost if obtained from a non-
affiliated entity and/or provided internally both
currently and in the future.
Both interest income and interest expense are
calculated using the previous day's fed funds effective
interest rate as quoted by the Fed Reserve Bank of New
York as long as this rate is at least four basis points
lower than the previous day's seven-day commercial
paper rate as quoted by the same source. Whenever the
Fed Funds rate is not at least four basis points lower
than the seven-day commercial paper rate, then the
seven-day commercial paper rate minus four basis points
is used. Members of the Pool with excess funds earn
this interest rate. Members of the Pool borrowing funds
pay this interest rate. Excess funds are invested in
accordance with Board approved guidelines. Depending
upon market conditions this method enables the Company
to save up to 30 basis points, including the commercial
paper dealers' commission, typically around four basis
points. (see Attachment B to the Money Pool).
<PAGE>
5. How are the associated costs to be charged or
allocated? Detailed descriptions must be provided.
Accounting and reporting for the Pool is being done on
a daily basis. Each day, the transactions of the Pool
members are recorded. Money Pool spreadsheet
(Attachment A to the agreement) is being prepared on a
daily basis for each month calculating ending balances,
interest income and interest expense. It also includes
the external investments and income for each member of
the Pool.
6. Provide assurance through safeguards in place that no
unregulated affiliate will be subsidized by the
regulated company as a result of the proposed
transaction.
No unregulated affiliates participate in the Money
Pool.
7. Provide assurances that the utility is not exposing
itself to greater business risks as a result of the
proposed arrangement. If the utility is being exposed
to a greater degree of business risk, show how the
arrangement would be in the public interest in spite of
the additional risk exposure.
There is no additional risk to Pool participants. The
Pool simply represents a more efficient method of
managing funds and results in higher returns for
investing members and lower costs for borrowing
members. All transactions occur at the previous day's
fed funds effective interest rate subject to the four
basis point provision mentioned previously. Any excess
funds will be invested in accordance with Board
approved guidelines to protect asset value.
8. Show that the agreement or arrangement is not
detrimental to the Virginia ratepayers. How is the
transaction in the public interest? Be specific.
The Money Pool Agreement is in the public interest
because it produces lower borrowing costs and higher
investment income to AP as a member of the Money Pool
and also reduces associated transaction costs.
9. Provide additional support for the
agreement/arrangement. Will the service/contract result
in lower operating costs, more efficiencies, economics
of scale or better quality of service for the utility?
Be specific.
The Money Pool is a more efficient method of managing
funds and has resulted in higher returns for investing
members and lower costs for borrowing members.
10. Show the arrangement will not cause the utility to
become involved in a long term captive relationship.
The Money Pool can be dissolved upon the mutual
agreement of all parties.
11. Costs should be directly assigned where possible.
Direct charge allocation should be emphasized for labor
and other costs that can be identified with the
specific activity. Allocations based on a general
allocator should be limited to 5% of total
<PAGE>
charges if at all possible. If such assignments deviate
from the above guidelines, provide justification for such
deviation.
Not applicable.
12. Section 56-233.1 of the Code of Virginia states that
every public utility shall use competitive bidding to
the extent possible in its purchasing practices. Show
that competitive bidding has been used in connection
with the proposed arrangement. Provide names of vendors
contacted and prices quoted as well as copies of bid
requests.
The Money Pool is an internal financing facility which
replaces to an extent investments in and borrowing from
banks and other credit facilities. The efficiencies
created by the internal financing facility as opposed
to outside lenders make the Money Pool cost efficient.
The availability of this internal financing is unique
and no competitive bidding was used to acquire this
service.
13. Relative to leases with affiliates, the utility must
justify leasing versus buying as well as leasing from an
affiliate versus leasing from a third party. Provide an
analysis to support the Company's proposal.
Not applicable.
<PAGE>
STATE CORPORATION COMMISSION
OF VIRGINIA
RICHMOND, VIRGINIA
Petition of The Potomac Edison Company
and Its Affiliated Companies,
Monongahela Power Company,
West Penn Power Company
Allegheny Generating Company, and
Allegheny Power System, Inc.
for Consent and Approval under
Chapters 3 and 4 of the
Code of Virginia
PETITION FOR CONSENT AND APPROVAL
Now comes The Potomac Edison Company ("PE") and its
affiliated companies, Monongahela Power Company ("Mon
Power"), West Penn Power Company ("West Penn"), Allegheny
Generating Company ("AGC"), and Allegheny Power System, Inc.
("APS"), collectively known as the Petitioners herein, and
respectfully represent to the Virginia State Corporation
Commission ("SCC" or "Commission") as follows:
The Parties
1. PE is a public utility corporation organized,
existing, and doing business under the laws of Virginia and
Maryland and is qualified to transact business in West
Virginia and Pennsylvania; PE's principal office and place
of business is at 10435 Downsville Pike, Hagerstown,
Maryland 21740.
2. Mon Power is an Ohio corporation providing
electric service to customers in the states of West Virginia
and Ohio; Mon Power's principal office and place of business
is at 1310 Fairmont Avenue, Fairmont, West Virginia 26554.
3. West Penn is a public utility corporation
organized, existing, and doing business under the laws of
Pennsylvania; West Penn's principal office and place of
business is at 800 Cabin Hill Drive, Greensburg,
Pennsylvania 15601.
<PAGE>
4. AGC is a Virginia corporation having its principal
office and place of business at 12 E. 49th Street, New York,
New York 10017.
5. APS is a Maryland corporation having its principal
office and place of business at 12 E. 49th Street, New York,
New York 10017.
6. PE, Mon Power, and West Penn are sister operating
companies and wholly-owned subsidiaries of APS. All 1,000
outstanding shares of AGC's common stock are owned as
follows: Potomac Edison 28%, Mon Power 27%, and West Penn
45%. PE, Mon Power, West Penn, and AGC are "affiliated
interests" of each other under 56-76(e) of Virginia's
"Affiliate's Act" set out in Chapter 4 of the Code of
Virginia ("Virginia Code"). Under 56-76(e), PE, Mon Power,
West Penn, and APS likewise are "affiliated interests" of
each other. Note, however, that AGC and APS are not
affiliates of each other because neither is a public utility
company, and application of Virginia's "Affiliate's Act"
depends on at least one party to a regulated transaction
being a public utility.
The Money Pool
7. Petitioners herein seek the Commission's consent
and approval under Chapters 3 and 4 of The Virginia Code to
enter into a Money Pool Agreement and to participate in the
Money Pool (the "Pool") with each other in accord with the
Money Pool Agreement. A copy of the Money Pool Agreement and
a copy of PE's Financing Summary are attached hereto as
parts hereof as Exhibits A and B, respectively.
8. The Pool is an internal financing facility in
which surplus funds of some participants are used to assist
or satisfy the short-term borrowing needs (one day up to one
year) of other participants. Using the Pool in place of
settling intercompany billings or borrowing from unrelated
third parties is generally a more efficient method of
<PAGE>
managing the funds among affiliated companies and should
result in higher returns for investing members, as well as
lower costs and more favorable terms for borrowing members.
9. Participants/Members of the Pool are the
Petitioners herein - PE, Mon Power, West Penn, AGC, and APS.
APS will be allowed to invest its excess funds in the Pool
but will not be permitted to borrow funds therefrom. AGC
will be allowed to borrow funds from the Pool but may not
invest in the Pool. Allegheny Power Service Corporation
("APSC"), a Maryland corporation and a wholly-owned
subsidiary of APS, will act as the Agent for Pool
participants and will administer the Pool but will not
borrow from or lend to it. APSC, therefore, is not a
Petitioner herein.
10. The operation of the Pool will be designed to
match, on a daily basis, the available cash and short-term
borrowing requirements of participants, thereby minimizing
the need for short-term borrowing to be made by participants
from external sources. To this end, it is anticipated that
the short-term borrowing requirements of participants will
be met, in the first instance, with the proceeds of
borrowings available through the Pool; and thereafter, to
the extent necessary, with proceeds of external short-term
borrowings.
11. The excess funds of Pool members will be
determined by the individual performing the cash position
function of each member each day. The determination of
excess funds will be based on the daily cash forecast and
will include allocations for compensating balance
requirements and the current day's known changes. Allocation
of funds to borrowing members and investing of funds not
needed by Pool members will be made by Agent APSC. No
participant will effect external borrowings for the purpose
of providing funds to the Pool or of making loans to other
participants in the Pool.
<PAGE>
12. Interest income and expense will be calculated
using the previous day's Federal Funds Effective Interest
Rate as quoted by the Federal Reserve Bank of New York. All
loans will be payable on demand and may be prepaid by any
borrowing participant at any time without premium or
penalty. Also, any participant contributing funds to the
Pool may withdraw them at any time without notice to satisfy
said participant's daily need for funds. Interest income and
expense will be calculated daily and settled on a cash basis
on the last business day of each month. For any given month,
a Pool member should have both interest income and interest
expense. The monthly booking will include entries that
reflect both income and expense. Entries will not be made on
a net basis for the interest accrual. For internally
invested and borrowed funds, the total interest income and
interest expense will be exactly the same.
13. When contributions to the Pool are in excess of
the borrowing needs of participants, Agent APSC will invest
the funds according to the investment schedule consistent
with the Board of Directors' guidelines established, first,
to provide a high degree of security to principal and,
second, to provide maximum return on the investment. The
interest income resulting from the external investments will
be booked upon receipt and will be allocated to the members
of the Pool on a basis equal to their pro rata share of net
contributions to the Pool on the day the investment was
placed.
14. If there are insufficient funds in the Pool to
satisfy all the members' borrowing needs, Agent APSC will
allocate funds to members of the following priority:
A. Members that do not have access to any other
funds;
B. Members that do not have access to commercial
paper markets;
<PAGE>
C. Members that will incur higher interest
charges due to their risk rating criteria; and
D. Grouping of members that results in the
lowest administrative costs.
15. Pool members whose needs are not fully satisfied
by available Pool funds will issue commercial paper to
borrow from banks through the System lines of credit. Such
short-term financings will continue to be made in the names
of the members having the financing needs. Sales of
commercial paper will be arranged by Agent APSC. Bank loans
will be arranged by individual Pool members.
16. The terms and conditions of the Money Pool
Agreement are and the operation of the Pool will be fair and
reasonable.
17. PE has a total capitalization of more than $5
million. Because the notes or other evidence of indebtedness
issued under the terms of the Money Pool Agreement together
with all other outstanding notes and drafts of a maturity of
less than twelve months on which PE is primarily or
secondarily liable may aggregate more than five percent of
PE's total capitalization, approval for the issuance of this
short-term indebtedness is required by 56-58 of Chapter 3
of the Virginia Code.
18. Petitioners herein are "affiliated interests" as
said term is defined in Chapter 4, 56-76 of the Virginia
Code. As a contract among affiliated interests, the Money
Pool Agreement is subject to Commission approval under 56-
77 and 56-82 of the Virginia Code.
19. In accord with Chapter 3, 56-65.1 of the Virginia
Code, PE hereby individually seeks the Commission's consent
and approval to change the Company's existing short-term
debt authority by requesting this Commission to amend its Order
<PAGE>
dated February 8, 1991, in Case No. PUF910006 to
change PE's existing short-term debt authority of $93
million with an expiration date of March 31, 1993, to a new
short-term debt authority of $94 million with an expiration
date of December 31, 1993. PE correspondingly requests that
this Commission further amend said Order to make PE's short-
term debt authority also applicable to Pool transactions. PE
shall use the proceeds of its increased level of short-term
borrowing for the purposes enumerated in Chapter 3, 56-58
of the Virginia Code.
Approvals Requested
20. Petitioners believe that the operation of the pool
will not grant an undue advantage to any other utility in
Virginia and will not adversely affect the pubic in Virginia
or in any other jurisdiction(s) in which one or more of
Petitioners operate.
21. Because the Pool is expected to reduce costs and
increase yields on short-term investments by Petitioners,
they maintain that the Pool not only will serve each
Petitioner's best interests, but the Pool also will operate
in the best interest of the public which each Petitioner
serves.
WHEREFORE, Petitioners pray that the Commission consent
to and approve the Petitioners' entering into the Money Pool
Agreement and participating in the Pool with each other in
accord with said Agreement as herein above set forth and
that such consent and approval be granted without formal
notice and hearing. PE additionally and individually prays
that this Commission consent to and approve a change in PE's
existing short-term debt authority and the extended
application of that authority by amending Commission Order
dated February 9, 1991, in Case No. PUF910006 to change PE's
existing short-term debt authority of $93 million with an
expiration date of March 31, 1993, to a new short-term debt
authority of $94 million with an expiration date of
<PAGE>
December 31, 1993, and by amending said Order to make that
short-term debt authority also applicable to Pool transactions,
and that such amendments to said Order be done without formal
notice and hearing.
Dated this 10th day of October 1991.
The Potomac Edison Company
By: /s/ J. D. Latimer
J. D. Latimer
Vice President
Attest:
/s/ E. W. McCauley, Jr.
E. W. McCauley, Jr.
Assistant Secretary
<PAGE>
Exhibit D-3(c)
BEFORE THE PUBLIC SERVICE COMMISSION
OF WEST VIRGINIA
CHARLESTON
PETITION OF MONONGAHELA POWER
COMPANY AND THE POTOMAC EDISON
COMPANY, DBA ALLEGHENY POWER,
FOR CONSENT AND APPROVAL OF
AMENDMENT TO MONEY POOL AGREEMENT
PETITION FOR CONSENT AND APPROVAL
NOW COMES Monongahela Power Company and The Potomac Edison
Company, doing business as Allegheny Power, the Petitioners
herein, and respectfully request the Public Service Commission of
West Virginia (Commission) grant its consent and approval, to the
extent required by law, under Section 24-2-12 of the West
Virginia Code or any other applicable law or rule, for
Petitioners to amend its Money Pool Agreement entered into among
its affiliated companies. The Companies represent as follows:
1. Monongahela Power Company, doing business as Allegheny
Power, hereinafter referred to as Monongahela or Petitioner(s),
is a public utility corporation organized and existing under the
laws of the State of Ohio, provides retail electric service to
customers in portions of West Virginia, and has its principal
place of business at 1310 Fairmont Avenue, Fairmont, West
Virginia 26555-1392. The financial condition of the Petitioner
is set forth on Attachment A hereto.
<PAGE>
2. The Potomac Edison Company, doing business as Allegheny
Power, hereinafter referred to as Potomac Edison or
Petitioner(s), is a public utility corporation organized and
existing under the laws of the Commonwealth of Virginia and the
State of Maryland, provides retail electric service to customers
in portions of West Virginia, and has its principal place of
business at 10435 Downsville Pike, Hagerstown, Maryland 21740-
1766. The financial condition of the Petitioner is set forth on
Attachment B hereto.
3. The Allegheny Power System Money Pool (the Money Pool)
is a contract among affiliated Allegheny Power System companies.
It is an internal financing facility in which the excess funds of
some participants are used to satisfy the short-term borrowing
needs of other participants. Participants in the Money Pool are
Monongahela Power Company, The Potomac Edison Company, West Penn
Power Company, Allegheny Generating Company ("AGC") and Allegheny
Power System, Inc. ("APS, Inc.")<FN1>. AGC may only borrow from the
Money Pool, and APS, Inc. may only lend to the Money Pool. Daily
balancing of each Money Pool participant and the overall
administration of the Money Pool is performed by Allegheny Power
Service Corporation, the agent for the participants. The
operation of the Money Pool is designed to match, on a daily
basis, the available cash and short-term borrowing requirements
of the participants, thereby minimizing the need to borrow funds
in the external short-term capital markets. Any excess funds
from the Money Pool are to be invested according to guidelines
outlined in the Money Pool Agreement. No unregulated affiliates
can participate in the Money Pool.
<FN1> On October 1, 1997, APS, Inc. changed its name to Allegheny Energy,
Inc.
- 2 -
<PAGE>
4. In September 1991, the Petitioners herein applied to
this honorable Commission for approval to enter into the Money
Pool Agreement and to participate in the same. By Commission
Order finalized on February 13, 1992, Monongahela and Potomac
Edison were authorized by the Commission to enter into the
described Money Pool arrangement among the Allegheny Power System
companies.
5. In the last base rate case proceeding, both Monongahela
and Potomac Edison requested recovery of the Money Pool expenses
for ratemaking purposes (Case Nos.
94-0035-E-42T and 94-0027-E-42T). Such rate recovery was granted
by the Orders of the Commission in those base rate proceedings
dated September 30, 1994 (ALJ Decision) and
March 17, 1995 (Commission Decision).
6. The Petitioners herein desire to amend the Money Pool
Agreement in minor respects. The following changes have been
made:
a. Under the prior Agreement, interest income and
expense used to be calculated "using the previous days' federal
funds effective interest rate as quoted by the Federal Reserve
Bank of New York." A revision has been made which adds to the
end of that sentence the following: "as long as this rate is at
least four basis points lower than the previous day's seven-day
commercial paper rate as quoted by the same source. Whenever the
federal funds rate is not at least four basis points lower than
the seven-day commercial paper rate, then the seven-day
commercial paper rate minus four basis points should be used."
b. The second change to the Money Pool Agreement is
that interest income resulting from the external investments will
be accrued daily instead of booked upon receipt.
- 3 -
<PAGE>
Interest income will be allocated to members of the Pool on a basis equal to
their pro-rata share of net contributions in the Pool throughout
the month, instead of on the net contributions on the day the
investment was placed. Also added to the Agreement was a
sentence that the allocation of interest income will be settled
on a cash basis on the last business day of each month.
In all other respects the Money Pool Agreement remains
the same. A copy of the revised Money Pool Agreement is attached
hereto as Attachment C.
7. Using the Money Pool is a more efficient method of
managing funds of the subsidiaries. Allegheny Power believes
that the cost of the proposed borrowings through the Money Pool
will generally be more favorable to the borrowing participants
than the comparable costs of external short-term borrowings and
that the yield to the participants contributing available funds
to the Money Pool will generally be higher than the typical yield
on short-term investments.
8. Petitioners believe that the terms and conditions of
the Amendment to the Money Pool Agreement are fair and
reasonable, will not grant an undue advantage to any party to the
transactions and that approval of this agreement as set forth
herein is in the best interests of Petitioners' West Virginia
customers. No other electric utility subject to the jurisdiction
of this Commission will be affected by the Money Pool Agreement.
9. Petitioners further represent that no purpose will be
served by the giving of formal notice or the conducting of a
hearing concerning the approval sought herein and that customers
served by Petitioners would be convenienced by the waiving of
formal notice and hearing in regard thereto.
- 4 -
<PAGE>
WHEREFORE, pursuant to Section 24-2-12 of the West Virginia
Code and to the extent required by law, Petitioners pray that the
Commission approve the subject Amendment to Money Pool Agreement
among the APS affiliates as being in the public interest and
grant the consent and approval for Petitioners to enter into said
modifications and perform such other acts as are necessary in
furtherance thereof.
Dated: October 17, 1997. MONONGAHELA POWER COMPANY and
THE POTOMAC EDISON COMPANY,
doing business as Allegheny Power
By: /s/ Thomas C. Sheppard, Jr.
Thomas C. Sheppard, Jr.
Assistant Secretary
/s/ Gary A. Jack
Gary A. Jack
Attorney
1310 Fairmont Avenue
Fairmont, WV 26554
(304) 367-3423
- 5 -
<PAGE>
VERIFICATION
STATE OF WEST VIRGINIA,
COUNTY OF MARION, TO WIT
Thomas C. Sheppard, Jr., Assistant Secretary,
Allegheny Power, being duly sworn, says that the facts and
allegations therein contained are true, except so far as
they are therein stated to be on information, and that, so
far as they are therein stated to be on information, he
believes them to be true.
/s/ Thomas C. Sheppard, Jr.
Thomas C. Sheppard, Jr.
Taken, sworn to and subscribed before me this 17th day
of October, 1997.
/s/ Barbara D. Ryan
Notary Public in and for said
County
My commission expires October 26, 2004.
- 6 -
<PAGE>
ATTACHMENT A
MONONGAHELA POWER COMPANY
STATEMENT OF FINANCIAL CONDITION
June 30, 1997
(a) Amount and classes of stock authorized:
(1) 8,000,000 shares Common Stock - par value $50
(2) 1,500,000 shares Cumulative Preferred Stock - par value
$100
(b) Amount and classes of stock issued and outstanding as of June
30, 1997:
(1) 5,891,000 shares Common Stock
740,000 shares Cumulative Preferred Stock, as
follows:
4.40% Series - 90,000 shares
4.80% Series B - 40,000 shares
4.50% Series C - 60,000 shares
$6.28 Series D - 50,000 shares
$7.73 Series L - 500,000 shares
(c) Terms of preference of all preferred stock:
All shares of equal rank.
(d) Brief description of each mortgage upon any property of the
corporation, giving date of execution, name of trustee, amount
of indebtedness authorized to be secured thereby, amount of
indebtedness actually secured and brief description of the
mortgaged property or collateral:
There is presently in effect a mortgage indenture dated
August 1, 1945, and indentures supplemental thereto,
executed by the applicant upon all its property under
which Citibank N.A., 111 Wall Street, New York, New
York, is the trustee. Said mortgage indenture secures
bonds issued thereunder by the applicant for the
purpose of borrowing money for its corporate purposes
and authorizes the issuance of an initial series of
bonds for the aggregate principal amount of
$22,000,000. Thereafter from time to time, upon a
showing that the consolidated net earnings of the
applicant and its subsidiaries available for interest
for 12 out of the 15 preceding months, after provision
for depreciation, have been in the aggregate equal to
not less than twice the amount of annual interest
charges on the principal amount of all bonds and prior
lien bonds then outstanding or applied for, additional
bonds of any series may be issued in an aggregate
principal amount equal to 60% of the net bondable value
of property additions plus the amount of any cash
deposited with the Trustee, and also in substitution
for any refundable bonds. The amount of indebtedness
accrued and principal outstanding is $355,000,000.
There is no interest due and unpaid.
<PAGE>
- 2 -
(e) Number and amount of bonds authorized and issued under each
mortgage; describing each class separately, giving date of
issue, par value, rate of interest, date of maturity and how
secured:
Monongahela Power Company has bonds issued and outstanding
under the above-mentioned Indenture consisting of series, all
of which are First Mortgage Bonds, as follows:
<TABLE>
<CAPTION>
Amount
Issued Par Value Series Outstanding
<S> <C> <C> <C> <C> <C>
1967 $1,000 6-1/2% Due 1997 $ 15,000,000
1991 1,000 8-5/8% Due 2021 50,000,000
1992 1,000 8-1/2% Due 2022 65,000,000
1992 1,000 7-3/8% Due 2002 25,000,000
1992 1,000 8-3/8% Due 2022 40,000,000
1992 1,000 7-1/4% Due 2007 25,000,000
1993 1,000 5-5/8% Due 2000 65,000,000
1995 1,000 7-5/8% Due 2025 70,000,000
$355,000,000
</TABLE>
(f) Other indebtedness of all kinds, giving same by classes and
describing security, if any:
<TABLE>
<CAPTION>
Amount
Indebtedness Outstanding
<S> <C> <C>
(1) Quarterly income debt securities $ 40,000,000
(2) Secured notes for pollution control facilities
and solid waste disposal notes 74,050,000
(3) Unsecured notes for pollution control facilities 6,560,000
(4) Instalment purchase obligations for pollution
control facilities 19,100,000
$139,710,000
</TABLE>
<PAGE>
- 3 -
(g) Amount of interest paid during previous fiscal year upon each
species of indebtedness and rate thereof and, if different rates
were paid, amount paid at each rate:
<TABLE>
<CAPTION>
12 Months
Ended
12-31-96
<S> <C> <C>
(1) First Mortgage Bonds
5-1/2% Series Due 1996 $ 495,000
6-1/2% Series Due 1997 975,000
8-5/8% Series Due 2021 4,312,500
8-1/2% Series Due 2022 5,525,000
7-3/8% Series Due 2002 1,843,750
8-3/8% Series Due 2022 3,350,000
7-1/4% Series Due 2007 1,812,500
5-5/8% Series Due 2000 3,656,250
7-5/8% Series Due 2025 5,337,500
27,307,500
(2) Quarterly Income Debt Securities
$40,000,000 @ 8% 3,200,000
3,200,000
(3) Secured Notes
$17,500,000 @ 6.375% 1,115,625
$ 5,000,000 @ 6.875% 343,750
$ 7,050,000 @ 5.95% 419,475
$10,675,000 @ 6.25% 667,188
$ 8,825,000 @ 6.75% 595,688
$25,000,000 @ 6.15% 1,537,500
4,679,226
(4) Unsecured Notes
$3,060,000 @ 6.30% 192,780
$4,000,000 @ 6.40% 256,000
448,780
(5) Installment Purchase Obligations
$19,100,000 @ 6.875% 1,313,125
Total interest on long-term debt $36,948,631
(6) See Schedule A for interest on short-term debt $ 370,804
</TABLE>
- 4 -
(h) Amount of dividends paid upon each class of stock during
previous five years:
<TABLE>
<CAPTION>
12 Months 12 Months 12 Months 12 Months 12 Months
Ended Ended Ended Ended Ended
Class of Stock 12-31-96 12-31-95 12-31-94 12-31-93 12-31-92
Cumulative Preferred:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
4.40% Series $ 396,000 $ 396,000 $ 396,000 $ 396,000 $ 396,000
4.80% Series B 192,000 192,000 192,000 192,000 192,000
4.50% Series C 270,000 270,000 270,000 270,000 270,000
$6.28 Series D 314,000 314,000 314,000 314,000 314,000
$7.36 Series E - 232,000 368,000 368,000 368,000
$9.64 Series F - - - - 387,500
$8.80 Series G - 277,000 440,000 440,000 440,000
$7.92 Series H - 250,000 396,000 396,000 396,000
$7.92 Series I - 499,000 792,000 792,000 792,000
$8.60 Series J - 813,000 1,290,000 1,290,000 1,290,000
$7.73 Series L 3,865,000 3,865,000 1,835,875 - -
$ 5,037,000 $ 7,108,000 $ 6,293,875 $ 4,458,000 $ 4,845,500
Common Stock:
Dividends $49,955,680 $48,660,810 $47,481,460 $49,837,860 $46,532,410
</TABLE>
(i) A statement of income for the twelve months ended June 30,
1997 and balance sheet as of June 30, 1997 are attached as
Schedules B and C, respectively.
Schedule A-1
REPORT:RAOI ALLEGHENY POWER SYSTEM, INC. DATE: 10/01/97
AVERAGE PRINCIPAL AND RATE ANALYSIS PAGE: 1
01/01/96 - 01/01/97
<TABLE>
<CAPTION>
PORTFOLIOS: MP
SECURITIES: CP
AVERAGE # DAYS AVG ANNUAL INTEREST AVERAGE
TYPE DATE AMOUNT PER DAY OUTSTANDING PRINCIPAL FOR PERIOD INTEREST RATE
---- -------- ---------------- ------------- ----------- -------------- ---------- -------------
Monongahela Power Company
<S> <C> <C> <C> <C> <C> <C> <C>
CP 12/28/95 $10,000,000.00 $27,777.78 10 $277,777.78 $16,805.56 6.0500
CP 12/29/95 $12,400,000.00 $34,444.44 1 $34,444.44 $2,101.11 6.1000
CP 01/02/96 $15,000,000.00 $41,666.67 1 $41,666.67 $2,425.00 5.8200
CP 01/03/96 $10,000,000.00 $27,777.78 13 $361,111.11 $20,763.89 5.7500
CP 01/04/96 $12,200,000.00 $33,888.89 1 $33,888.89 $1,982.50 5.8500
CP 01/05/96 $11,500,000.00 $31,944.44 3 $95,833.33 $5,433.75 5.6700
CP 01/08/96 $7,800,000.00 $21,666.67 1 $21,666.67 $1,256.67 5.8000
CP 01/09/96 $8,100,000.00 $22,500.00 1 $22,500.00 $1,282.50 5.7000
CP 01/11/96 $7,300,000.00 $20,277.78 1 $20,277.78 $1,125.42 5.5500
CP 01/11/96 $10,000,000.00 $27,777.78 7 $194,444.44 $10,791.67 5.5500
CP 01/16/96 $10,850,000.00 $30,138.89 1 $30,138.89 $1,726.96 5.7300
CP 01/18/96 $13,900,000.00 $38,611.11 1 $38,611.11 $2,171.88 5.6250
CP 01/19/96 $12,300,000.00 $34,166.67 3 $102,500.00 $5,688.75 5.5500
CP 01/22/96 $11,400,000.00 $31,666.67 1 $31,666.67 $1,767.00 5.5800
CP 01/23/96 $11,000,000.00 $30,555.56 1 $30,555.56 $1,701.94 5.5700
CP 01/24/96 $8,500,000.00 $23,611.11 1 $23,611.11 $1,310.42 5.5500
CP 01/25/96 $10,000,000.00 $27,777.78 15 $416,666.67 $23,125.00 5.5500
CP 01/25/96 $2,900,000.00 $8,055.56 1 $8,055.56 $451.11 5.6000
CP 01/29/96 $8,550,000.00 $23,750.00 1 $23,750.00 $1,365.63 5.7500
CP 01/31/96 $4,900,000.00 $13,611.11 1 $13,611.11 $816.67 6.0000
CP 02/01/96 $7,700,000.00 $21,388.89 1 $21,388.89 $1,155.00 5.4000
CP 02/05/96 $7,800,000.00 $21,666.67 1 $21,666.67 $1,153.75 5.3250
CP 03/01/96 $7,000,000.00 $19,444.44 10 $194,444.44 $10,441.67 5.3700
CP 03/05/96 $10,300,000.00 $28,611.11 1 $28,611.11 $1,530.69 5.3500
CP 03/18/96 $2,150,000.00 $5,972.22 1 $5,972.22 $328.47 5.5000
CP 03/28/96 $3,100,000.00 $8,611.11 1 $8,611.11 $482.22 5.6000
CP 03/29/96 $12,400,000.00 $34,444.44 3 $103,333.33 $5,890.00 5.7000
CP 04/01/96 $15,600,000.00 $43,333.33 1 $43,333.33 $2,383.33 5.5000
CP 04/02/96 $5,000,000.00 $13,888.89 6 $83,333.33 $4,583.33 5.5000
CP 04/02/96 $5,000,000.00 $13,888.89 13 $180,555.56 $9,894.44 5.4800
CP 04/04/96 $5,900,000.00 $16,388.89 4 $65,555.56 $3,540.00 5.4000
CP 04/15/96 $8,050,000.00 $22,361.11 1 $22,361.11 $1,225.39 5.4800
CP 04/26/96 $800,000.00 $2,222.22 3 $6,666.67 $346.67 5.2001
</TABLE>
<PAGE>
Schedule A-2
REPORT:RAOI ALLEGHENY POWER SYSTEM, INC. DATE: 10/01/97
AVERAGE PRINCIPAL AND RATE ANALYSIS PAGE: 2
01/01/96 - 01/01/97
<TABLE>
<CAPTION>
PORTFOLIOS: MP
SECURITIES: CP
AVERAGE # DAYS AVG ANNUAL INTEREST AVERAGE
TYPE DATE AMOUNT PER DAY OUTSTANDING PRINCIPAL FOR PERIOD INTEREST RATE
---- -------- ---------------- ------------- ----------- -------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
CP 05/01/96 $7,000,000.00 $19,444.44 12 $233,333.33 $12,553.33 5.3800
CP 05/03/96 $9,400,000.00 $26,111.11 3 $78,333.33 $4,167.33 5.3200
CP 06/04/96 $4,000,000.00 $11,111.11 1 $11,111.11 $602.22 5.4200
CP 06/28/96 $7,700,000.00 $21,388.89 3 $64,166.67 $3,625.42 5.6500
CP 07/30/96 $2,650,000.00 $7,361.11 1 $7,361.11 $398.97 5.4200
CP 08/02/96 $3,650,000.00 $10,138.89 3 $30,416.67 $1,703.33 5.6000
CP 08/07/96 $4,900,000.00 $13,611.11 1 $13,611.11 $714.58 5.2500
CP 08/08/96 $3,500,000.00 $9,722.22 1 $9,722.22 $503.61 5.1800
CP 08/14/96 $2,550,000.00 $7,083.33 1 $7,083.33 $380.38 5.3701
CP 09/30/96 $7,700,000.00 $21,388.89 1 $21,388.89 $1,276.92 5.9700
CP 10/01/96 $11,050,000.00 $30,694.44 1 $30,694.44 $1,672.85 5.4500
CP 10/02/96 $10,000,000.00 $27,777.78 1 $27,777.78 $1,486.11 5.3500
CP 10/16/96 $500,000.00 $1,388.89 1 $1,388.89 $73.33 5.2798
CP 10/17/96 $300,000.00 $833.33 1 $833.33 $44.17 5.3004
CP 11/08/96 $800,000.00 $2,222.22 4 $8,888.89 $471.11 5.3000
CP 12/31/96 $28,250,000.00 $78,472.22 2 $156,944.44 $10,986.11 7.0000
TOTAL $3,311,666.66 $187,708.16 5.6681
=============== ============ =======
GRAND TOTAL $3,311,666.66 $187,708.16 5.6681
=============== ============ =======
</TABLE>
Schedule A-3
REPORT:RAOI ALLEGHENY POWER SYSTEM, INC. DATE: 10/01/97
AVERAGE PRINCIPAL AND RATE ANALYSIS PAGE: 1
01/01/96 - 01/01/97
<TABLE>
<CAPTION>
PORTFOLIOS: MP
SECURITIES: BL
AVERAGE # DAYS AVG ANNUAL INTEREST AVERAGE
TYPE DATE AMOUNT PER DAY OUTSTANDING PRINCIPAL FOR PERIOD INTEREST RATE
---- -------- ---------------- ------------- ----------- -------------- ---------- -------------
Monongahela Power Company
<S> <C> <C> <C> <C> <C> <C> <C>
BL 12/29/95 $7,500,000.00 $20,833.33 1 $20,833.33 $1,250.00 6.0000
BL 01/02/96 $7,500,000.00 $20,833.33 1 $20,833.33 $1,208.33 5.8000
BL 01/03/96 $13,000,000.00 $36,111.11 1 $36,111.11 $2,211.81 6.1250
BL 01/10/96 $7,400,000.00 $20,555.56 1 $20,555.56 $1,130.56 5.5000
BL 01/12/96 $7,200,000.00 $20,000.00 4 $80,000.00 $4,480.00 5.6000
BL 01/17/96 $7,600,000.00 $21,111.11 1 $21,111.11 $1,292.00 6.1200
BL 01/26/96 $2,900,000.00 $8,055.56 3 $24,166.67 $1,370.25 5.6700
BL 01/30/96 $5,000,000.00 $13,888.89 1 $13,888.89 $787.50 5.6700
BL 02/02/96 $8,600,000.00 $23,888.89 3 $71,666.67 $3,834.17 5.3500
BL 02/06/96 $5,100,000.00 $14,166.67 1 $14,166.67 $757.92 5.3500
BL 02/07/96 $3,400,000.00 $9,444.44 1 $9,444.44 $500.56 5.3000
BL 02/08/96 $2,200,000.00 $6,111.11 1 $6,111.11 $323.89 5.3000
BL 02/09/96 $9,900,000.00 $27,500.00 3 $82,500.00 $4,372.50 5.3000
BL 02/12/96 $8,600,000.00 $23,888.89 1 $23,888.89 $1,278.06 5.3500
BL 02/13/96 $9,250,000.00 $25,694.44 1 $25,694.44 $1,361.81 5.3000
BL 02/14/96 $7,600,000.00 $21,111.11 1 $21,111.11 $1,161.11 5.5000
BL 03/01/96 $8,800,000.00 $24,444.44 3 $73,333.33 $4,033.33 5.5000
BL 03/04/96 $2,700,000.00 $7,500.00 1 $7,500.00 $411.00 5.4800
BL 03/06/96 $7,350,000.00 $20,416.67 1 $20,416.67 $1,078.00 5.2800
BL 03/07/96 $3,400,000.00 $9,444.44 1 $9,444.44 $495.83 5.2500
BL 03/08/96 $1,850,000.00 $5,138.89 3 $15,416.67 $814.00 5.2800
BL 03/11/96 $7,800,000.00 $21,666.67 1 $21,666.67 $1,159.17 5.3500
BL 03/15/96 $2,100,000.00 $5,833.33 3 $17,500.00 $997.50 5.7000
BL 04/02/96 $6,700,000.00 $18,611.11 1 $18,611.11 $1,023.61 5.5000
BL 04/03/96 $5,850,000.00 $16,250.00 1 $16,250.00 $885.63 5.4500
BL 04/08/96 $9,100,000.00 $25,277.78 1 $25,277.78 $1,352.36 5.3500
BL 04/09/96 $7,200,000.00 $20,000.00 1 $20,000.00 $1,070.00 5.3500
BL 04/10/96 $5,250,000.00 $14,583.33 1 $14,583.33 $802.08 5.5000
BL 04/11/96 $3,200,000.00 $8,888.89 1 $8,888.89 $475.56 5.3500
BL 04/12/96 $1,400,000.00 $3,888.89 3 $11,666.67 $630.00 5.4000
BL 04/16/96 $5,250,000.00 $14,583.33 1 $14,583.33 $780.21 5.3500
BL 04/17/96 $1,900,000.00 $5,277.78 1 $5,277.78 $279.72 5.3000
BL 04/24/96 $3,800,000.00 $10,555.56 1 $10,555.56 $591.11 5.6000
</TABLE>
<PAGE>
Schedule A-4
REPORT:RAOI ALLEGHENY POWER SYSTEM, INC. DATE: 10/01/97
AVERAGE PRINCIPAL AND RATE ANALYSIS PAGE: 2
01/01/96 - 01/01/97
<TABLE>
<CAPTION>
PORTFOLIOS: MP
SECURITIES: BL
AVERAGE # DAYS AVG ANNUAL INTEREST AVERAGE
TYPE DATE AMOUNT PER DAY OUTSTANDING PRINCIPAL FOR PERIOD INTEREST RATE
---- -------- ---------------- ------------- ----------- -------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BL 04/25/96 $2,600,000.00 $7,222.22 1 $7,222.22 $386.39 5.3500
BL 04/29/96 $8,800,000.00 $24,444.44 1 $24,444.44 $1,307.78 5.3500
BL 04/30/96 $8,300,000.00 $23,055.56 1 $23,055.56 $1,268.06 5.5000
BL 05/01/96 $7,800,000.00 $21,666.67 1 $21,666.67 $1,174.33 5.4200
BL 05/02/96 $8,800,000.00 $24,444.44 1 $24,444.44 $1,324.89 5.4200
BL 05/06/96 $8,000,000.00 $22,222.22 1 $22,222.22 $1,188.89 5.3500
BL 05/07/96 $8,200,000.00 $22,777.78 1 $22,777.78 $1,218.61 5.3500
BL 05/08/96 $6,200,000.00 $17,222.22 1 $17,222.22 $955.83 5.5500
BL 05/09/96 $4,500,000.00 $12,500.00 1 $12,500.00 $668.75 5.3500
BL 05/10/96 $2,250,000.00 $6,250.00 3 $18,750.00 $993.75 5.3000
BL 05/13/96 $7,600,000.00 $21,111.11 1 $21,111.11 $1,140.00 5.4000
BL 05/14/96 $6,650,000.00 $18,472.22 1 $18,472.22 $988.26 5.3500
BL 05/28/96 $2,300,000.00 $6,388.89 1 $6,388.89 $341.81 5.3501
BL 05/29/96 $1,100,000.00 $3,055.56 1 $3,055.56 $163.47 5.3499
BL 06/03/96 $1,950,000.00 $5,416.67 1 $5,416.67 $299.54 5.5300
BL 06/05/96 $2,600,000.00 $7,222.22 1 $7,222.22 $399.39 5.5300
BL 07/01/96 $11,600,000.00 $32,222.22 1 $32,222.22 $1,788.33 5.5500
BL 07/02/96 $10,650,000.00 $29,583.33 1 $29,583.33 $1,641.88 5.5500
BL 07/03/96 $11,350,000.00 $31,527.78 2 $63,055.56 $3,594.17 5.7000
BL 07/05/96 $10,950,000.00 $30,416.67 3 $91,250.00 $4,973.13 5.4500
BL 07/08/96 $10,450,000.00 $29,027.78 1 $29,027.78 $1,532.67 5.2800
BL 07/09/96 $8,900,000.00 $24,722.22 1 $24,722.22 $1,322.64 5.3500
BL 07/10/96 $7,100,000.00 $19,722.22 1 $19,722.22 $1,045.28 5.3000
BL 07/11/96 $6,450,000.00 $17,916.67 1 $17,916.67 $949.58 5.3000
BL 07/12/96 $5,050,000.00 $14,027.78 3 $42,083.33 $2,209.38 5.2500
BL 07/29/96 $1,000,000.00 $2,777.78 1 $2,777.78 $152.78 5.5001
BL 07/31/96 $950,000.00 $2,638.89 1 $2,638.89 $151.74 5.7501
BL 08/01/96 $3,500,000.00 $9,722.22 1 $9,722.22 $544.44 5.6000
BL 08/05/96 $3,750,000.00 $10,416.67 1 $10,416.67 $572.92 5.5000
BL 08/06/96 $4,450,000.00 $12,361.11 1 $12,361.11 $661.32 5.3500
BL 08/09/96 $3,550,000.00 $9,861.11 3 $29,583.33 $1,553.13 5.2500
BL 08/12/96 $3,050,000.00 $8,472.22 1 $8,472.22 $453.26 5.3500
BL 08/13/96 $2,900,000.00 $8,055.56 1 $8,055.56 $426.94 5.2999
BL 09/30/96 $1,000,000.00 $2,777.78 1 $2,777.78 $169.44 6.0998
BL 10/03/96 $10,050,000.00 $27,916.67 1 $27,916.67 $1,479.58 5.3000
</TABLE>
<PAGE>
Schedule A-5
REPORT:RAOI ALLEGHENY POWER SYSTEM, INC. DATE: 10/01/97
AVERAGE PRINCIPAL AND RATE ANALYSIS PAGE: 3
01/01/96 - 01/01/97
<TABLE>
<CAPTION>
PORTFOLIOS: MP
SECURITIES: BL
AVERAGE # DAYS AVG ANNUAL INTEREST AVERAGE
TYPE DATE AMOUNT PER DAY OUTSTANDING PRINCIPAL FOR PERIOD INTEREST RATE
---- -------- ---------------- ------------- ----------- -------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BL 10/04/96 $10,150,000.00 $28,194.44 3 $84,583.33 $4,440.63 5.2500
BL 10/07/96 $10,250,000.00 $28,472.22 1 $28,472.22 $1,509.03 5.3000
BL 10/08/96 $9,600,000.00 $26,666.67 1 $26,666.67 $1,413.33 5.3000
BL 10/09/96 $9,350,000.00 $25,972.22 1 $25,972.22 $1,428.47 5.5000
BL 10/10/96 $8,700,000.00 $24,166.67 1 $24,166.67 $1,292.92 5.3500
BL 10/11/96 $7,100,000.00 $19,722.22 4 $78,888.89 $4,181.11 5.3000
BL 10/15/96 $3,500,000.00 $9,722.22 1 $9,722.22 $539.58 5.5500
BL 10/28/96 $4,000,000.00 $11,111.11 1 $11,111.11 $605.56 5.4500
BL 10/29/96 $2,300,000.00 $6,388.89 1 $6,388.89 $341.81 5.3501
BL 10/30/96 $2,400,000.00 $6,666.67 1 $6,666.67 $360.00 5.4000
BL 11/01/96 $7,100,000.00 $19,722.22 3 $59,166.67 $3,402.08 5.7500
BL 11/04/96 $8,900,000.00 $24,722.22 1 $24,722.22 $1,359.72 5.5000
BL 11/05/96 $11,850,000.00 $32,916.67 1 $32,916.67 $1,744.58 5.3000
BL 11/06/96 $7,300,000.00 $20,277.78 1 $20,277.78 $1,155.83 5.7000
BL 11/07/96 $5,100,000.00 $14,166.67 1 $14,166.67 $765.00 5.4000
BL 12/03/96 $1,050,000.00 $2,916.67 1 $2,916.67 $161.88 5.5502
BL 12/16/96 $10,000,000.00 $27,777.78 1 $27,777.78 $1,486.11 5.3500
BL 12/16/96 $2,200,000.00 $6,111.11 1 $6,111.11 $349.56 5.7201
BL 12/17/96 $8,500,000.00 $23,611.11 1 $23,611.11 $1,286.81 5.4500
BL 12/18/96 $6,900,000.00 $19,166.67 1 $19,166.67 $1,102.08 5.7500
BL 12/19/96 $2,300,000.00 $6,388.89 1 $6,388.89 $346.92 5.4301
BL 12/20/96 $4,050,000.00 $11,250.00 3 $33,750.00 $1,788.75 5.3000
BL 12/23/96 $1,350,000.00 $3,750.00 1 $3,750.00 $200.62 5.3499
BL 12/27/96 $18,050,000.00 $50,138.89 3 $150,416.67 $8,272.92 5.5000
BL 12/30/96 $18,900,000.00 $52,500.00 1 $52,500.00 $2,940.00 5.6000
TOTAL $2,303,611.14 $125,717.24 5.4574
=============== ============ =======
GRAND TOTAL $2,303,611.14 $125,717.24 5.4574
=============== ============ =======
</TABLE>
Schedule A-6
REPORT:RAOI ALLEGHENY POWER SYSTEM, INC. DATE: 10/01/97
AVERAGE PRINCIPAL AND RATE ANALYSIS PAGE: 1
01/01/96 - 01/01/97
<TABLE>
<CAPTION>
PORTFOLIOS: MP
SECURITIES: MP
AVERAGE # DAYS AVG ANNUAL INTEREST AVERAGE
TYPE DATE AMOUNT PER DAY OUTSTANDING PRINCIPAL FOR PERIOD INTEREST RATE
---- -------- ---------------- ------------- ----------- -------------- ---------- -------------
Monongahela Power Company
<S> <C> <C> <C> <C> <C> <C>
MP 03/04/96 $9,300,000.00 $25,833.33 1 $25,833.33 $1,379.50 5.3400
MP 03/05/96 $1,700,000.00 $4,722.22 1 $4,722.22 $249.81 5.2901
MP 03/06/96 $3,250,000.00 $9,027.78 1 $9,027.78 $463.13 5.1301
MP 03/07/96 $5,400,000.00 $15,000.00 1 $15,000.00 $762.00 5.0800
MP 03/08/96 $6,850,000.00 $19,027.78 3 $57,083.33 $2,974.04 5.2100
MP 03/11/96 $7,500,000.00 $20,833.33 1 $20,833.33 $1,075.00 5.1600
MP 03/12/96 $11,800,000.00 $32,777.78 1 $32,777.78 $1,720.83 5.2500
MP 03/13/96 $9,900,000.00 $27,500.00 1 $27,500.00 $1,443.75 5.2500
MP 03/14/96 $7,950,000.00 $22,083.33 1 $22,083.33 $1,185.88 5.3700
MP 04/18/96 $500,000.00 $1,388.89 1 $1,388.89 $71.81 5.1703
MP 04/19/96 $650,000.00 $1,805.56 3 $5,416.67 $281.13 5.1901
MP 04/26/96 $400,000.00 $1,111.11 3 $3,333.33 $176.33 5.2899
MP 05/31/96 $300,000.00 $833.33 3 $2,500.00 $133.50 5.3400
MP 06/06/96 $950,000.00 $2,638.89 1 $2,638.89 $140.92 5.3401
MP 10/09/96 $9,350,000.00 $25,972.22 1 $25,972.22 $1,428.47 5.5000
MP 10/24/96 $200,000.00 $555.56 1 $555.56 $29.44 5.2992
MP 11/06/96 $4,100,000.00 $11,388.89 1 $11,388.89 $608.17 5.3400
MP 11/07/96 $4,000,000.00 $11,111.11 1 $11,111.11 $592.22 5.3300
MP 11/08/96 $6,650,000.00 $18,472.22 4 $73,888.89 $3,901.33 5.2800
MP 11/12/96 $7,750,000.00 $21,527.78 1 $21,527.78 $1,112.99 5.1700
MP 11/13/96 $7,000,000.00 $19,444.44 1 $19,444.44 $1,030.56 5.3000
MP 11/14/96 $6,950,000.00 $19,305.56 1 $19,305.56 $1,005.82 5.2100
MP 11/15/96 $3,900,000.00 $10,833.33 3 $32,500.00 $1,735.50 5.3400
MP 11/18/96 $3,200,000.00 $8,888.89 1 $8,888.89 $479.11 5.3900
MP 11/20/96 $2,400,000.00 $6,666.67 1 $6,666.67 $352.67 5.2901
MP 11/21/96 $1,500,000.00 $4,166.67 1 $4,166.67 $222.08 5.3299
MP 11/22/96 $1,400,000.00 $3,888.89 3 $11,666.67 $616.00 5.2800
MP 11/25/96 $650,000.00 $1,805.56 1 $1,805.56 $94.61 5.2399
MP 11/26/96 $5,300,000.00 $14,722.22 1 $14,722.22 $787.64 5.3500
MP 11/27/96 $4,600,000.00 $12,777.78 2 $25,555.56 $1,349.33 5.2800
MP 11/29/96 $10,750,000.00 $29,861.11 3 $89,583.33 $4,855.42 5.4200
MP 12/02/96 $11,850,000.00 $32,916.67 1 $32,916.67 $1,790.67 5.4400
MP 12/03/96 $11,350,000.00 $31,527.78 1 $31,527.78 $1,727.72 5.4800
</TABLE>
<PAGE>
Schedule A-7
REPORT:RAOI ALLEGHENY POWER SYSTEM, INC. DATE: 10/01/97
AVERAGE PRINCIPAL AND RATE ANALYSIS PAGE: 2
01/01/96 - 01/01/97
<TABLE>
<CAPTION>
PORTFOLIOS: MP
SECURITIES: MP
AVERAGE # DAYS AVG ANNUAL INTEREST AVERAGE
TYPE DATE AMOUNT PER DAY OUTSTANDING PRINCIPAL FOR PERIOD INTEREST RATE
---- -------- ---------------- ------------- ----------- -------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
MP 12/04/96 $11,800,000.00 $32,777.78 1 $32,777.78 $1,668.39 5.0900
MP 12/05/96 $12,000,000.00 $33,333.33 1 $33,333.33 $1,786.67 5.3600
MP 12/06/96 $12,300,000.00 $34,166.67 3 $102,500.00 $5,453.00 5.3200
MP 12/09/96 $11,100,000.00 $30,833.33 1 $30,833.33 $1,606.42 5.2100
MP 12/10/96 $9,250,000.00 $25,694.44 1 $25,694.44 $1,333.54 5.1900
MP 12/11/96 $8,300,000.00 $23,055.56 1 $23,055.56 $1,191.97 5.1700
MP 12/12/96 $8,700,000.00 $24,166.67 1 $24,166.67 $1,254.25 5.1900
MP 12/13/96 $2,600,000.00 $7,222.22 3 $21,666.67 $1,137.50 5.2500
MP 12/19/96 $3,450,000.00 $9,583.33 1 $9,583.33 $518.46 5.4100
MP 12/20/96 $3,650,000.00 $10,138.89 3 $30,416.67 $1,609.04 5.2900
MP 12/23/96 $4,850,000.00 $13,472.22 1 $13,472.22 $693.82 5.1500
MP 12/24/96 $5,600,000.00 $15,555.56 2 $31,111.11 $1,636.44 5.2600
MP 12/26/96 $5,750,000.00 $15,972.22 1 $15,972.22 $820.97 5.1400
MP 12/31/96 $2,900,000.00 $8,055.56 2 $16,111.11 $890.94 5.5300
TOTAL $1,084,027.79 $57,378.79 5.2931
=============== ============ =======
GRAND TOTAL $1,084,027.79 $57,378.79 5.2931
=============== ============ =======
</TABLE>
Schedule B
Monongahela Power Company
Statement of Income
For Period Ended June 30, 1997 ($000)
Description 12 Months
Electric Operating Revenues:
Residential 198,383
Commercial 119,283
Industrial 192,130
Wholesale and other, excluding affiliates 11,481
Bulk power transactions, net 16,135
Affiliated companies 74,197
Total Operating Revenues 611,609
Operating Expenses:
Power Cost:
Fuel 131,298
Purchased power & exchanges 100,714
Deferred power costs, net (15,771)
Other 54,360
Transmission & distribution 40,766
Customers accounting & services 15,118
Administrative & general 46,940
Total Operation & Maintenance 373,425
Depreciation 56,445
Taxes other than income 40,235
Federal & state income taxes 40,405
Total Operating Expenses 510,510
Operating Income 101,099
Other Income and Deductions:
AOFDC 514
Other income, net 6,874
Total Other Income & Deductions 7,388
Income Bef Interest Charges 108,487
Interest Charges:
Interest on first mortgage bonds 26,808
Interest on other long-term obligations 9,676
Other Interest 2,123
ABFDC (601)
Total Interest Charges 38,006
Net Income 70,481
<PAGE>
Schedule C
Monongahela Power Company
Balance Sheet ($000's)
June 30,
1997
ASSETS:
Property, Plant, and Equipment:
At original cost, including $35,850,000
and $33,366,000 under construction $ 1,905,794
Accumulated depreciation (818,172)
1,087,622
Investments:
Allegheny Generating Company - common stock at equ 53,441
Other 313
53,754
Current Assets:
Cash 149
Accounts receivable:
Electric service, net of $1,767,000 and $1,949,000
uncollectible allowance 66,414
Affiliated and other 10,114
Materials and supplies - at average cost:
Operating and construction 18,857
Fuel 21,681
Prepaid taxes 11,993
Other 6,249
135,457
Deferred Charges:
Regulatory assets 165,761
Unamortized loss on reacquired debt 14,797
Other 13,565
194,123
Total Assets $ 1,470,956
CAPITALIZATION AND LIABILITIES:
Capitalization:
Common stock $ 294,550
Other paid-in capital 2,441
Retained earnings 245,777
542,768
Preferred stock 74,000
Long-term debt and QUIDS 455,415
1,072,183
Current Liabilities:
Short-term debt 17,347
Long-term debt due within one year 34,600
Accounts payable 3,851
Accounts payable to affiliates 16,042
Taxes accrued:
Federal and state income 901
Other 16,873
Deferred power costs 4,074
Interest accrued 8,268
Restructuring liability 6,771
Other 8,334
117,061
Deferred Credits and Other Liabilities:
Unamortized investment credit 19,371
Deferred income taxes 226,184
Regulatory liabilities 17,831
Other 18,326
281,712
Total Capitalization and Liabilities $ 1,470,956
<PAGE>
ATTACHMENT B
THE POTOMAC EDISON COMPANY
STATEMENT OF FINANCIAL CONDITION
June 30, 1997
(a) Amount and classes of stock authorized:
(1) 23,000,000 shares Common Stock - no par value
(2) 5,378,611 shares Cumulative Preferred Stock - par
value $100
(b) Amount and classes of stock issued and outstanding as of June
30, 1997:
(1) 22,385,000 shares Common Stock
163,784 shares Cumulative Preferred Stock, as
follows:
3.60% Series - 63,784 shares
$5.88 Series C - 100,000 shares
(c) Terms of preference of all preferred stock:
All shares of equal rank.
(d) Brief description of each mortgage upon any property of the
corporation, giving date of execution, name of trustee, amount
of indebtedness authorized to be secured thereby, amount of
indebtedness actually secured and brief description of the
mortgaged property or collateral:
There is presently in effect a mortgage indenture dated
October 1, 1944, and indentures supplemental thereto,
executed by the applicant upon all its property under
which Chemical Bank is Trustee and Thomas J. Foley is
Individual Trustee. Said mortgage indenture secures
bonds issued thereunder by the applicant for the
purpose of borrowing money for its corporate purposes
and authorizes the issuance of an initial series of
bonds for the aggregate principal amount of
$16,981,000. Thereafter from time to time, upon a
showing that the consolidated net earnings of the
applicant and its subsidiaries available for interest
for 12 out of the 15 preceding months, after provision
for depreciation, have been in the aggregate equal to
not less than twice the amount of annual interest
charges on the principal amount of all bonds and prior
lien bonds then outstanding or applied for, additional
bonds of any series may be issued in an aggregate
principal amount equal to 60% of the net bondable value
of property additions plus the amount of any cash
deposited with the Trustee, and also in substitution
for any refundable bonds. The amount of indebtedness
accrued and principal outstanding is $495,000,000.
There is no interest due and unpaid.
<PAGE>
- 2 -
(e) Number and amount of bonds authorized and issued under each
mortgage; describing each class separately, giving date of
issue, par value, rate of interest, date of maturity and how
secured:
Potomac has bonds issued and outstanding under the above-
mentioned Indenture consisting of series, all of which are
First Mortgage Bonds, as follows:
<TABLE>
<CAPTION>
Amount
Issued Par Value Series Outstanding
<S> <C> <C> <C> <C> <C>
1991 $1,000 8-7/8% Due 2021 $ 50,000,000
1991 1,000 8% Due 2006 50,000,000
1992 1,000 8% Due 2022 55,000,000
1993 1,000 7-3/4% Due 2023 45,000,000
1993 1,000 5-7/8% Due 2000 75,000,000
1994 1,000 8% Due 2024 75,000,000
1995 1,000 7-3/4% Due 2025 65,000,000
1995 1,000 7-5/8% Due 2025 80,000,000
$495,000,000
</TABLE>
(f) Other indebtedness of all kinds, giving same by classes and
describing security, if any:
<TABLE>
<CAPTION>
Amount
Indebtedness Outstanding
<S> <C> <C>
(1) Quarterly income debt securities $ 45,456,500
(2) Secured notes for pollution control facilities
and solid waste disposal notes 91,700,000
(3) Unsecured notes for pollution control facilities 4,000,000
$141,156,500
</TABLE>
<PAGE>
- 3 -
(g) Amount of interest paid during previous fiscal year upon each
species of indebtedness and rate thereof and, if different rates
were paid, amount paid at each rate:
<TABLE>
<CAPTION>
12 Months
Ended
12-31-96
<S> <C> <C> <C>
(1) First Mortgage Bonds
5-7/8% Series Due 1996 $ 528,750
5-7/8% Series Due 2000 4,406,250
8% Series Due 2006 4,000,000
8-7/8% Series Due 2021 4,437,500
8% Series Due 2022 4,400,000
7-3/4% Series Due 2023 3,487,500
8% Series Due 2024 6,000,000
7-5/8% Series Due 2025 6,100,000
7-3/4% Series Due 2025 5,037,500
38,397,500
(2) Quarterly Income Debt Securities
$45,456,500 @ 8% 3,636,520
3,636,520
(3) Secured Notes
$30,000,000 @ 6.30% 1,890,000
$21,000,000 @ 6.15% 1,291,500
$ 8,600,000 @ 5.95% 511,700
$ 6,550,000 @ 6.875 450,313
$13,990,000 @ 6.25% 874,375
$11,560,000 @ 6.75% 780,300
5,798,188
(4) Unsecured Notes
$5,500,000 @ 6.30% 173,250
$4,800,000 @ 6.30% 151,200
324,450
Total interest on long-term debt $48,156,658
(5) See Schedule A for interest on short-term debt $ 110,911
</TABLE>
<PAGE>
- 4 -
(h) Amount of dividends paid upon each class of stock during
previous five years:
<TABLE>
<CAPTION>
12 Months 12 Months 12 Months 12 Months 12 Months
Ended Ended Ended Ended Ended
Class of Stock 12-31-96 12-31-95 12-31-94 12-31-93 12-31-92
Cumulative Preferred:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3.60% Series $ 229,623 $ 229,623 $ 229,623 $ 229,623 $ 229,623
4.70% Series B - - - 14,262 22,999
$5.88 Series C 588,000 588,000 588,000 588,000 588,000
$7.00 Series D - 259,500 350,000 350,000 350,000
$9.40 Series E - - - - 495,500
$8.32 Series F - 308,500 416,000 416,000 416,000
$8.00 Series G - 593,000 800,000 800,000 800,000
$9.64 Series H - - - - 1,524,000
$7.16 Series J - 1,351,739 1,954,680 2,040,600 2,133,991
Common Stock:
Dividends $66,483,450 $64,692,650 $62,454,150 $60,385,750 $53,731,550
</TABLE>
(i) A statement of income for the twelve months ended June 30,
1997 and balance sheet as of June 30, 1997 are attached as
Schedules B and C, respectively.
REPORT:RAOI ALLEGHENY POWER SYSTEM, INC. DATE: 12/11/97
AVERAGE PRINCIPAL AND RATE ANALYSIS PAGE: 1
01/01/96 - 01/01/97
PORTFOLIOS: pe
SECURITIES: cp
<TABLE>
<CAPTION>
AVERAGE # DAYS AVG ANNUAL INTEREST AVERAGE
TYPE DATE AMOUNT PER DAY OUTSTANDING PRINCIPAL FOR PERIOD INTEREST RATE
The Potomac Edison Company
<S> <C> <C> <C> <C> <C> <C> <C>
CP 12/29/95 $21,650,000.00 $60,138.89 1 $60,138.89 $3,668.47 6.1000
CP 01/02/96 $23,200,000.00 $64,444.44 1 $64,444.44 $3,750.67 5.8200
CP 01/03/96 $20,850,000.00 $57,916.67 1 $57,916.67 $3,561.88 6.1500
CP 01/04/96 $20,950,000.00 $58,194.44 1 $58,194.44 $3,404.38 5.8500
CP 01/09/96 $13,650,000.00 $37,916.67 1 $37,916.67 $2,161.25 5.7000
CP 01/09/96 $5,000,000.00 $13,888.89 7 $97,222.22 $5,493.06 5.6500
CP 01/10/96 $13,650,000.00 $37,916.67 1 $37,916.67 $2,104.38 5.5500
CP 01/11/96 $11,800,000.00 $32,777.78 1 $32,777.78 $1,819.17 5.5500
CP 01/16/96 $7,000,000.00 $19,444.44 7 $136,111.11 $7,622.22 5.6000
CP 01/18/96 $14,000,000.00 $38,888.89 1 $38,888.89 $2,187.50 5.6250
CP 01/19/96 $11,900,000.00 $33,055.56 3 $99,166.67 $5,503.75 5.5500
CP 01/23/96 $17,850,000.00 $49,583.33 1 $49,583.33 $2,761.79 5.5700
CP 01/24/96 $6,200,000.00 $17,222.22 8 $137,777.78 $7,619.11 5.5300
CP 01/26/96 $7,250,000.00 $20,138.89 3 $60,416.67 $3,413.54 5.6500
CP 02/01/96 $14,550,000.00 $40,416.67 1 $40,416.67 $2,182.50 5.4000
CP 02/02/96 $4,050,000.00 $11,250.00 3 $33,750.00 $1,797.19 5.3250
CP 02/06/96 $10,650,000.00 $29,583.33 1 $29,583.33 $1,576.79 5.3300
CP 02/12/96 $900,000.00 $2,500.00 1 $2,500.00 $135.00 5.4000
CP 02/12/96 $450,000.00 $1,250.00 1 $1,250.00 $67.50 5.4000
CP 02/15/96 $3,100,000.00 $8,611.11 1 $8,611.11 $473.61 5.5000
CP 02/16/96 $2,200,000.00 $6,111.11 4 $24,444.44 $1,276.00 5.2200
CP 05/06/96 $450,000.00 $1,250.00 1 $1,250.00 $67.25 5.3800
CP 12/17/96 $1,500,000.00 $4,166.67 1 $4,166.67 $227.92 5.4701
CP 12/31/96 $7,500,000.00 $20,833.33 2 $41,666.67 $2,916.67 7.0000
TOTAL $1,156,111.12 $65,791.60 5.6908
GRAND TOTAL $1,156,111.12 $65,791.60 5.6908
</TABLE>
<PAGE>
REPORT:RAOI ALLEGHENY POWER SYSTEM, INC. DATE: 12/11/97
AVERAGE PRINCIPAL AND RATE ANALYSIS PAGE: 1
01/01/96 - 01/01/97
PORTFOLIOS: pe
SECURITIES: bl
<TABLE>
<CAPTION>
AVERAGE # DAYS AVG ANNUAL INTEREST AVERAGE
TYPE DATE AMOUNT PER DAY OUTSTANDING PRINCIPAL FOR PERIOD INTEREST RATE
The Potomac Edison Company
<S> <C> <C> <C> <C> <C> <C> <C>
BL 01/05/96 $13,500,000.00 $37,500.00 3 $112,500.00 $6,356.25 5.6500
BL 01/05/96 $6,500,000.00 $18,055.56 3 $54,166.67 $3,033.33 5.6000
BL 01/08/96 $6,500,000.00 $18,055.56 1 $18,055.56 $1,056.25 5.8500
BL 01/08/96 $13,500,000.00 $37,500.00 1 $37,500.00 $2,175.00 5.8000
BL 01/12/96 $9,100,000.00 $25,277.78 4 $101,111.11 $5,662.22 5.6000
BL 01/16/96 $19,700,000.00 $54,722.22 1 $54,722.22 $3,146.53 5.7500
BL 01/17/96 $14,500,000.00 $40,277.78 1 $40,277.78 $2,456.94 6.1000
BL 01/22/96 $12,300,000.00 $34,166.67 1 $34,166.67 $1,906.50 5.5800
BL 01/24/96 $10,000,000.00 $27,777.78 1 $27,777.78 $1,536.11 5.5300
BL 01/25/96 $8,250,000.00 $22,916.67 1 $22,916.67 $1,283.33 5.6000
BL 01/29/96 $5,000,000.00 $13,888.89 1 $13,888.89 $ 791.67 5.7000
BL 01/29/96 $7,650,000.00 $21,250.00 1 $21,250.00 $1,215.50 5.7200
BL 01/30/96 $10,400,000.00 $28,888.89 1 $28,888.89 $1,652.44 5.7200
BL 01/31/96 $3,750,000.00 $10,416.67 1 $10,416.67 $ 627.08 6.0200
BL 02/02/96 $9,400,000.00 $26,111.11 3 $78,333.33 $4,190.83 5.3500
BL 02/05/96 $13,850,000.00 $38,472.22 1 $38,472.22 $2,058.26 5.3500
BL 02/07/96 $7,500,000.00 $20,833.33 1 $20,833.33 $1,104.17 5.3000
BL 02/08/96 $6,450,000.00 $17,916.67 1 $17,916.67 $ 946.00 5.2800
BL 02/09/96 $3,500,000.00 $9,722.22 3 $29,166.67 $1,545.83 5.3000
BL 02/20/96 $2,100,000.00 $5,833.33 1 $5,833.33 $ 306.25 5.2500
BL 05/01/96 $4,050,000.00 $11,250.00 1 $11,250.00 $ 608.63 5.4100
BL 05/02/96 $2,000,000.00 $5,555.56 1 $ 5,555.56 $ 303.89 5.4700
BL 05/03/96 $1,450,000.00 $4,027.78 3 $12,083.33 $ 640.42 5.3000
BL 12/16/96 $3,250,000.00 $9,027.78 1 $ 9,027.78 $ 516.39 5.7200
TOTAL $806,111.13 $45,119.82 5.5972
GRAND TOTAL $806,111.13 $45,119.82 5.5972
</TABLE>
Schedule B
The Potomac Edison Company
Statement of Income
For Period Ended June 30, 1997 ($000)
Description 12 Months
Electric Operating Revenues:
Residential 305,653
Commercial 145,636
Industrial 197,554
Wholesale and other, excluding affiliates 30,586
Bulk power transactions, net 22,028
Affiliated companies 5,479
Total Operating Revenues 706,936
Operating Expenses:
Power Cost:
Fuel 135,421
Purchased power & exchanges 139,584
Deferred power costs, net (2,634)
Other 56,841
Transmission & distribution 36,929
Customers accounting & services 18,912
Administrative & general 50,295
Total Operation & Maintenance 435,348
Depreciation 72,594
Taxes other than income 47,727
Federal & state income taxes 35,120
Total Operating Expenses 590,789
Operating Income 116,147
Other Income and Deductions:
AOFDC 1,622
Other income, net 11,865
Total Other Income & Deductions 13,487
Income Bef Interest Charges 129,634
Interest Charges:
Interest on first mortgage bonds 37,872
Interest on other long-term obligations 9,772
Other Interest 2,242
ABFDC (1,292)
Total Interest Charges 48,594
Net Income 81,040
<PAGE>
Schedule C
The Potomac Edison Company
Balance Sheet ($000's)
June 30,
1997
ASSETS:
Property, Plant, and Equipment:
At original cost, including $49,771,000
and $60,082,000 under construction $ 2,150,580
Accumulated depreciation (828,079)
1,322,501
Investments:
Allegheny Generating Company - common stock at equity 55,384
Other 588
55,972
Current Assets:
Cash 137
Accounts receivable:
Electric service, net of $1,114,000 and $1,580,000
uncollectible allowance 84,989
Affiliated and other 7,081
Notes receivable from affiliates 34,650
Materials and supplies - at average cost:
Operating and construction 23,719
Fuel 20,336
Prepaid taxes 14,465
Other 7,224
192,601
Deferred Charges:
Regulatory assets 88,606
Unamortized loss on reacquired debt 17,552
Other 10,031
116,189
Total Assets $ 1,687,263
CAPITALIZATION AND LIABILITIES:
Capitalization:
Common stock $ 447,700
Other paid-in capital 2,690
Retained earnings 263,119
713,509
Preferred stock 16,378
Long-term debt and QUIDS 627,821
1,357,708
Current Liabilities:
Short-term debt -
Long-term debt due within one year 800
Accounts payable 22,008
Accounts payable to affiliates 15,914
Taxes accrued:
Federal and state income -
Other 16,641
Interest accrued 9,433
Customer deposits 5,058
Restructuring liability 7,959
Other 8,630
Deferred Credits and Other Liabilities:
Unamortized investment credit 22,546
Deferred income taxes 180,886
Regulatory liabilities 13,190
Other 26,490
243,112
Total Capitalization and Liabilities $ 1,687,263
<PAGE>
ATTACHMENT C
Attachment C was previously filed as "Exhbiit B" to
Post-Effective Amendment No. 12 on September 17, 1997.
<PAGE>
EXHIBIT D-5(c)
COMMONWEALTH OF VIRGINIA
STATE CORPORATION COMMISSION
AT RICHMOND, NOVEMBER 18, 1997
APPLICATION OF
THE POTOMAC EDISON COMPANY CASE NO. PUF970032
For continuing approval of money pool
agreement with affiliates
ORDER GRANTING AUTHORITY
On October 8, 1997, the Potomac Edison company d/b/a
Allegheny Power ("the Company" or "Applicant") filed an
application with the Commission under Chapter 4 of Title 56
of the Code of Virginia. In its application, the Company
requests continuing approval to borrow and lend funds to
companies with affiliated interests ("the Money Pool")
through a revised Money Pool Agreement ("the Agreement").
Applicant most recently received Commission approval to
participate in the Money Pool in Case No. PUF960004, by order
dated April 29, 1996. The application states that two terms
and conditions of the Agreement have recently changed. These
changes relate to the way the interest rate is calculated in
the Money Pool and how external investment income of the
Money Pool is allocated. According to ordering paragraph 2
of the April 29 order, the Company is required to seek
subsequent approval from the Commission if terms and
conditions of the Agreement should change.
<PAGE>
The Commission, upon consideration of the application
and having been advised by its Staff, is of the opinion and
finds that approval of the application will not be
detrimental to the public interest. Accordingly,
IT IS ORDERED THAT:
1) Applicant is hereby granted approval to participate as a
borrower and lender of funds through the Money Pool under the
Agreement, all in a manner, under the terms and conditions
and for the purposes as set forth in the application.
2) Applicant shall seek subsequent approval from the
Commission if the terms and conditions of the Money Pool
Agreement approved herein should change.
3) The approval granted herein shall not preclude the
Commission from exercising the provisions of 56-78 and 56-
80 of the Code of Virginia hereafter.
4) The Commission reserves the right to examine the books
and records of any affiliate in connection with the authority
granted herein, whether or not such affiliate is regulated by
this Commission, pursuant to 57-79 of the Code of Virginia.
5) The approval of this application shall have no
implications for ratemaking.
6) There appearing nothing further to be done in this
matter, it is hereby dismissed.
AN ATTESTED COPY hereof shall be sent to the Applicant,
2
<PAGE>
attention Philip J. Bray, Esquire, 10435 Downsville Pike,
Hagerstown, Maryland 21740-1766; and to the Division of
Economics & Finance of the Commission.
A True Copy
Taste:
/s/ William J. Bridge
Clerk of the
State Corporation Commission
3
