ALLEGHENY ENERGY INC
35-CERT, 1998-05-28
ELECTRIC SERVICES
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<PAGE>
___________________________________
						                             	:
         IN THE MATTER OF			        :
                             							:
ALLEGHENY ENERGY, INC. et. al.    		:
                             							:	CERTIFICATE
         File No. 70-8411			       	:  	PURSUANT TO RULE 24
                             							: 	FOR THE QUARTER ENDED
     (Public Utility Holding	    			:  	MARCH 31, 1998
      Company Act of 1935)				      :
___________________________________	:




		Through March 31, 1998, Allegheny Energy, Inc. (Allegheny) has made 
capital contributions to AYP Capital, Inc. ("AYP Capital") and its subsidiaries
totaling $44,710,786.  See attached consolidated financial statements for the
quarter ended March 31, 1998.  During the first quarter of 1998, AYP Capital
performed studies and completed preliminary development activities in connection
with the ownership of companies in the areas of emerging technologies closely
related to Allegheny's core business.  Other specific activities performed by
AYP Capital during the first quarter of 1998 are shown below.

I.	Description of Activities

	A.	Consulting and Engineering Services

		AYP Capital provided engineering, consulting, procurement and construction 
services to nonaffiliated entities and completed development and marketing 
activities associated with the provision of such services to nonaffiliated 
entities. 
		
	B.	Energy Management Services - APS Cogenex

		As previously reported, AYP Capital and EUA-Cogenex agreed to cease joint 
marketing activities for energy management services under the terms of their 
joint venture agreement for APS Cogenex.  Pending resolution of outstanding 
jobs, the APS Cogenex joint venture continues to exist.

		AYP Capital developed energy management products and services to be 
offered to customers in and around the service territory of its affiliates.

<PAGE>

	C.	EWGs and FUCOs

		AYP Capital, through the Latin American Energy and Electricity Fund I, 
L.P., 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 1998, AYP Capital has invested $3,579,227 in 
LAEEF. 

		AYP Energy continues as an exempt wholesale generator ("EWG") and 
power marketer. 

	D.	Real Estate Activities

		No new activities.

	E.  	Insider Heat Pump Distributorship

		During the first quarter, AYP Capital, Inc., has continued its activities in 
marketing and selling Insider heat pumps.

	F.	HVAC and Appliance Warranties/Power Quality Devices

		No new activities.  

II.	Guarantees or assumption of liabilities by Allegheny on behalf of AYP
Capital or its subsidiaries.

		Allegheny continues to provide a Support Agreement to AYP Energy in 
connection with a $15 million discretionary line of credit for AYP Energy 
for the issuance of standby letters of credit for the benefit of AYP Energy's 
activities.

		Allegheny Energy is providing support to AYP Capital in connection with 
a $15 million discretionary line of credit for AYP Capital to be utilized by 
AYP Capital's subsidiary Allegheny Energy Solutions as working capital.  
Allegheny Energy is providing support to AYP Energy trading activities by 
providing parent guarantees to AYP Energy counterparties.  Through the 
first quarter of 1998, Allegheny Energy has provided guarantees of support 
in the amount of $10,000,000.

                                     2

<PAGE>

III.	Services Provided by AYP Capital to Associate Companies

		AYP Capital did not provide any services to associate companies during 
the first quarter of 1998.




IV.	Factoring Activities

		AYP Capital did not perform any activities associated with the factoring of 
accounts receivable in the first quarter of 1998. 

                   								ALLEGHENY ENERGY, INC.


                   								By  /s/ Thomas K. Henderson
                                   Thomas K. Henderson
 				     				  	                  Vice President


                   								AYP CAPITAL, INC.


                   								By  /s/ Thomas K. Henderson
                        								  	Thomas K. Henderson
                          									Vice President


Dated: May 28, 1998

                                      3


<PAGE>




                                         AYP CAPITAL
                                         CONSOLIDATED STATEMENT OF INCOME
                                         FOR THREE MONTHS ENDED MARCH 31, 1998

<TABLE>
<CAPTION>

                                                                QTR          YTD        12MOS

            <S>                                          <C>          <C>         <C>
            ELECTRIC OPERATING REVENUES                  49,093,300   49,093,300  122,601,433

            OPERATING EXPENSES:
               Operation:
                 Fuel                                     5,023,902    5,023,902   23,415,711
                Purchased Power & Exchange               40,223,324   40,223,324   80,634,003
                 Other                                    1,500,893    1,500,893    5,695,050
               Transmission & Distribution                  496,867      496,867    3,450,859
               Cust. Accts & Services                       833,539      833,539    3,896,795
               Administrative & General                   2,025,999    2,025,999    8,965,889
            Total Operation & Maintenance                50,104,524   50,104,524  126,058,307

               Depreciation                               1,397,725    1,397,725    6,686,692
               Taxes other than income taxes              1,689,432    1,689,432    5,883,832
               Federal and state income taxes            (2,359,113)  (2,359,113)  (9,820,607)
                          Total Operating Expenses       50,832,568   50,832,569  128,808,223
                          Operating Income               (1,739,268)  (1,739,269)  (6,206,790)

            OTHER INCOME AND DEDUCTIONS:
               Other income, net                            367,526      367,526    1,813,179
                         Total Other Income and Deductio    367,526      367,526    1,813,179
                         Income Before Interest Charges and
                           Preferred Dividends           (1,371,742)  (1,371,743)  (4,393,611)

            INTEREST CHARGES AND PREFERRED DIVIDENDS:
               Interest on other long-term obligations    2,552,000    2,552,000   10,838,667
               Other interest                                 5,741        5,741       16,509
                        Total Interest Charges and
                            Preferred Dividends           2,557,741    2,557,741   10,855,176


            Consolidated Net Income                      (3,929,483)  (3,929,483) (15,248,787)

</TABLE>

                                       Unaudited




<PAGE>


                                                AYP Capital, Inc.
                                                CONSOLIDATED BALANCE SHEET
                                                As of March 31, 1998

          Assets
          Property, plant, and equipment:
             At original cost                                       171,050,344
             Accumulated depreciation                                (6,974,479)
                                                                    164,075,865
          Investments and other assets:
             Nonutility investments                                   5,132,293
                                                                      5,132,293
          Current assets:
             Cash and temporary cash investments                      8,734,556
             Accounts receivable:
                Electric service                                     15,726,552
                Other                                                 1,353,898
                Allowance for Uncollectible Accounts                    (33,785)
              Accts. Receivable - Affiliates                            257,691
             Materials and supplies--at average cost:
                Operating and construction                            2,422,602
                Fuel                                                  2,706,999
             Other                                                    7,090,794
                                                                     38,259,307
          Deferred charges:
             Other                                                    5,740,678
                                                                      5,740,678

                    Total Assets                                    213,208,143

          Capitalization and Liabilities
          Capitalization:
             Common stock                                                 1,000
             Other paid-in capital                                   44,709,786
             Retained earnings                                      (21,726,359)
                                                                     22,984,427
             Preferred stock:
             Long-term debt of subsidiaries                         160,000,000
             Long-term debt of subsidiaries                                   0
                                                                    182,984,427
          Current liabilities:
             Short-term debt                                            600,000
             Accounts payable - Affil.                                6,132,976
             Accounts payable - Other                                12,267,635
             Taxes accrued:
                Federal and state income                              2,156,183
                Other                                                 2,042,974
             Interest accrued                                         1,648,000
             Payrolls Accrued                                                 0
             Other                                                    1,541,879
                                                                     26,389,647
          Deferred credits and other liabilities:
             Deferred income taxes                                    3,692,333
             Other                                                      141,736
                                                                      3,834,069

                          Total Capitalization and Liabilities      213,208,143

                                                Unaudited






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