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File No. 70-9187
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2
TO
APPLICATION OR DECLARATION
ON FORM U-1
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Allegheny Energy, Inc.
10435 Downsville Pike
Hagerstown, MD 21740
(Name of company or companies filing this statement and
addresses of principal executive offices)
Allegheny Energy, Inc.
(Name of top registered holding company parent of each
applicant or declarant)
Thomas K. Henderson, Esq.
Vice President
Allegheny Energy, Inc.
10435 Downsville Pike
Hagerstown, MD 21740
(Name and address of agent for service)
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1. Applicant hereby amends Item No. 1. Description of
Proposed Transaction by adding the following to the end
thereof:
Compliance with Rule 54
Rule 54 provides that in determining whether to approve
certain transactions other than those involving exempt
wholesale generators ("EWGs") or foreign utility companies
("FUCOs"), as defined in the 1935 Act, the Commission will
not consider the effect of the capitalization of earnings of
any subsidiary which is an EWG or FUCO if Rule 53(a), (b)
and (c) are satisfied. The requirements of Rule 53(a), (b)
and (c) are satisfied.
Rule 53(a)(1): Allegheny Energy, Inc. has an indirect
subsidiary (AYP Energy, Inc.) that is an EWG. As of March
31, 1998, Allegheny Energy, Inc. through its subsidiary, AYP
Capital, Inc. had invested $12,243,891 in AYP Energy, Inc.
This investment represents less than 2% of the average of
the consolidated retained earnings of Allegheny Energy, Inc.
reported on Form 10-K or Form 10-Q, as applicable, for the
four consecutive quarters ended March 31, 1998.
Rule 53(a)(2): AYP Energy, Inc. will maintain books
and records and make available the books and records
required by Rule 53(a)(2).
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Rule 53(a)(3): No more than 2% of the employees of the
public utility subsidiaries of Allegheny Energy, Inc. will,
at any one time, directly or indirectly, render services to
AYP Energy, Inc.
Rule 53(a)(4): Allegheny Energy, Inc. will submit a
copy of Item 9 and Exhibits G and H of Form U5S to each of
the public service commissions having jurisdiction over the
retail rates of its public utility subsidiaries.
Rule 53(b)(1) : Neither Allegheny Energy, Inc nor any
subsidiary of Allegheny Energy, Inc is the subject of any
pending bankruptcy or similar proceeding.
Rule 53(b)(2): Allegheny Energy, Inc's average
consolidated retained earnings for the four most recent
quarterly periods ($1,048,342,000) represented an increase
of approximately $52,869,000 (or 5%) in the average
consolidated retained earnings from the previous four
quarterly periods ($995,473,000).
Rule 53(b)(3): For the twelve months ended March 31,
1998, there were losses attributable to direct or indirect
investments in EWGs or FUCOs in the amount of $12,368,271
(AYP Energy).
Rule 53(c): Rule 53(c) is inapplicable because the
requirements of Rule 53(a) and (b) have been satisfied.
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SIGNATURE
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned company has
duly caused this statement to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: May 20, 1998 ALLEGHENY ENERGY, INC.
/s/ Carol G. Russ
By: Carol G. Russ
Counsel
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