<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 : DECEMBER 31, 1996
Company Act of 1935) :
___________________________________ :
As of December 31, 1996, Allegheny Power System, Inc.
("APS") has made capital contributions to AYP Capital, Inc.
("AYP Capital") and its subsidiaries totaling $31,204,677. See
attached consolidated financial statements for the year ended
December 31, 1996. During the fourth quarter of 1996, 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 fourth quarter of 1996 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 fourth quarter. As of the end of the
fourth quarter of 1996, AYP Capital has invested
$1,667,477 in Fondelec.
AYP Energy, AYP Capital's wholly owned subsidiary,
received all necessary approvals to acquire Duquesne
Light Company's 50% interest in Unit No. 1 of the Ft.
Martin Power Station in West Virginia. AYP Energy has
been certified as an exempt wholesale generator by the
Federal Energy Regulatory Commission and has been
granted authority to sell power at market based rates.
AYP Energy closed on the acquisition of Duquesne
Light's interest in Ft. Martin on October 31, 1996.
AYP Energy has commenced power marketing activity.
D. Real Estate Activities
No new activities.
E. Insider Heat Pump Distributorship
AYP Capital filed a U-1 requesting authority to sell
and market heat pumps. It performed preliminary
development activities to investigate the feasibility
of becoming a distributor.
F. Appliance Warranties/Power Quality Devices
AYP Capital filed a U-1 requesting authority to engage
in the sale and marketing of 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 with AYP Energy in the
amount of in connection with AYP Energy's acquisition of
2
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an EWG as described above. This Support Agreement was
given in connection with the financing of that
acquisition.
III. Services Provided by AYP Capital to Associate Companies
AYP Capital did not provide any services to associate
companies during the fourth quarter of 1996.
IV. Factoring Activities
AYP Capital did not perform any activities associated with
the factoring of accounts receivables.
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: February 28, 1997
3
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AYP Capital, Inc.
CONSOLIDATED BALANCE SHEET
As of December 31, 1996
Property and Equipment
Nonutility Property 176,802,339.88
Accum Deprec, Nonutility Property 1,744,032.35
---------------
Total Property and Equipment 178,546,372.23
---------------
Investments and Other Assets
Inv in EnviroTech, net 913,713.46
Inv in LAEEFI, net 1,634,181.62
Inv in APS Cogenex, net 209,314.41
Inv in FondElec GP, net 33,295.29
Other Deferred Charges 17,419.89
--------------
Total Other Assets 2,807,924.67
--------------
Current Assets
Cash, FNB of Maryland 4,650,915.42
Account Recv, Other 9,485,203.33
Account Recv, Affiliates 5,302,413.68
Materials and Supplies - at average cost:
Operating and Construction 2,394,708.52
Fuel 2,795,292.18
Other 1,737,736.00
-------------
Total Current Assets 26,366,269.13
--------------
Total Assets 207,720,566.03
--------------
Capitalization
Common Stock Issued * 1,000.00
Other Paid-In Capital 31,283,676.53
Retained Egs, Unappropriated (3,439,523.00)
-------------
27,845,153.53
Long-term Debt 160,000,000.00
Notes and Advance Payable 12,500.00
--------------
Total Capitalization 187,857,653.53
--------------
Current Liabilities
Accounts Payable, Other 12,303,900.85
Accounts Payable, Affiliates 2,822,334.16
Taxes Payable 394,471.17
Other Current Liabilities 3,099,159.29
-------------
Total Current Liabilities 18,619,865.47
-------------
Deferred Credits and Other Liabilities
Deferred Income Taxes 648,809.00
Other 594,238.03
------------
Total 1,243,047.03
------------
Total Capitalization and Liabilities 207,720,566.03
--------------
Unaudited
* 10 par, shares authorized, 100 shares outstanding.
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<TABLE>
AYP Capital, Inc.
CONSOLIDATED STATEMENT OF INCOME
For 12 Months Ended December 31, 1996
<CAPTION>
Description QTR YTD 12MOS
<S> <C> <C> <C> <C>
Operating Revenues
Svcs Rendered to Nonaffiliates 747,145.00 747,145.00 747,145.00
----------- ------------ -------------
Total Operating Revenues 747,145.00 747,145.00 747,145.00
------------ ------------ -------------
Operating Expenses
Fuel 727,499.42 727,499.42 727,499.42
Other Operations 1,126,609.63 1,126,609.63 1,126,609.63
Transmission & Distribution 11,493.55 11,493.55 11,493.55
Customer Acctg & Services 87,174.98 87,174.98 87,174.98
Administrative & General 859,475.46 859,475.46 859,475.46
Depreciation Expenses 11,272.20 13,857.00 13,857.00
Taxes Other Than Income 30,450.14 32,492.14 32,492.14
Income Taxes (1,622,945.00) (1,884,527.00) (1,884,527.00)
------------- -------------- ------------
Total Operating Expenses 1,231,030.38 974,075.18 974,075.18
------------- -------------- ------------
Operating Income (483,885.38) (226,930.18) (226,930.18)
------------- -------------- ------------
Other Income & Deductions
Other Income, net 176,230.53 (566,206.24) (566,206.24)
------------- -------------- ------------
Total Other Income & Deductions 176,230.53 (566,206.24) (566,206.24)
Interest Charges
Interest on Other L-T Obligations
2,074,333.34 2,074,333.34 2,074,333.34
Other Interest 15.67 15.67 15.67
------------- -------------- -------------
Total Nonoperating Activity 2,074,349.01 2,074,349.01 2,074,349.01
------------- -------------- -------------
Net Income (2,382,003.86) (2,867,485.43) (2,867,485.43)
------------- -------------- -------------
</TABLE>
Unaudited
