<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 : DECEMBER 31, 1997
Company Act of 1935) :
___________________________________ :
Through December 31, 1997, Allegheny Energy, Inc.
(Allegheny) has made capital contributions to AYP Capital, Inc.
("AYP Capital") and its subsidiaries totaling $43,870,066. See
attached consolidated financial statements for the quarter ended
December 31, 1997. During the fourth quarter of 1997, AYP
Capital performed studies and completed preliminary development
activities in connection with the ownership of companies in the
areas of emerging technologies closely related to Allegheny's
core business. Other specific activities performed by AYP
Capital during the fourth quarter of 1997 are shown below.
I. Description of Activities
A. Consulting and Engineering Services
AYP Capital provided engineering, consulting,
procurement and construction services to nonaffiliated
entities and completed development and marketing
activities associated with the provision of such
services to nonaffiliated entities. AYP Capital also
purchased $9,407 of equipment from Monongahela Power
Company to perform one project.
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
<PAGE>
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.
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. One new investment was
made in the fourth quarter. AYP Capital purchased an
interest in a Brazilian electric company through its
participation in the Latin American Energy and
Electricity Fund. As of the end of the fourth quarter
of 1997, AYP Capital has invested $3,546,002 in
FondElec.
AYP Energy continues as an exempt wholesale generator
("EWG") and power marketer.
D. Real Estate Activities
No new activities.
E. Insider Heat Pump Distributorship
During the fourth quarter, AYP Capital continued its
activities in product development.
F. HVAC and Appliance Warranties/Power Quality Devices
During the fourth quarter, AYP Capital continued its
activities in produce development.
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
2
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issuance of standby letters of credit for the benefit of
AYP Energy's activities.
III. Services Provided by AYP Capital to Associate Companies
AYP Capital did not provide any services to associate
companies during the fourth quarter of 1997.
IV. Factoring Activities
AYP Capital did not perform any activities associated
with the factoring of accounts receivable in the fourth
quarter of 1997.
ALLEGHENY ENERGY, INC.
By /s/ Thomas K. Henderson
Thomas K. Henderson
Vice President
AYP CAPITAL, INC.
By /s/ Thomas K. Henderson
Counsel
Thomas K. Henderson
Counsel
Dated: March 2, 1998
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AYP CAPITAL
CONSOLIDATED STATEMENT OF INCOME
FOR TWELVE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
QTR YTD 12MOS
<S> <C> <C> <C>
ELECTRIC OPERATING REVENUES 32,923,176 85,795,805 85,795,805
OPERATING EXPENSES:
Operation:
Fuel 6,386,255 24,183,161 24,183,161
Purchased Power & Exchange 20,923,581 43,663,228 43,663,228
Other 1,405,092 5,084,005 5,084,005
Transmission & Distribution 886,972 3,755,822 3,755,822
Cust. Accts & Services 1,375,937 3,126,750 3,126,750
Administrative & General 3,415,261 8,026,420 8,026,420
Total Operation & Maintenance 34,393,098 87,839,386 87,839,386
Depreciation 1,656,853 6,605,819 6,605,819
Taxes other than income taxes 1,165,412 4,907,185 4,907,185
Federal and state income taxes (2,377,692) (9,204,231) (9,204,231)
Total Operating Expenses 34,837,671 90,148,159 90,148,159
Operating Income (1,914,495) (4,352,353) (4,352,353)
OTHER INCOME AND DEDUCTIONS:
Other income, net 1,123,762 1,458,889 1,458,889
Total Other Income and Deductio 1,123,762 1,458,889 1,458,889
Income Before Interest Charges and
Preferred Dividends (790,733) (2,893,464) (2,893,464)
INTEREST CHARGES AND PREFERRED DIVIDENDS:
Interest on other long-term obligations 2,772,267 10,998,667 10,998,667
Other interest 4,989 24,118 24,118
Total Interest Charges and
Preferred Dividends 2,777,255 11,022,785 11,022,785
Consolidated Net Income (3,567,989) (13,916,249) (13,916,249)
</TABLE>
Unaudited
AYP CAPITAL
CONSOLIDATED STATEMENT OF INCOME
FOR TWELVE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
QTR YTD 12MOS
<S> <C> <C> <C>
ELECTRIC OPERATING REVENUES 32,923,176 85,795,805 85,795,805
OPERATING EXPENSES:
Operation:
Fuel 6,386,255 24,183,161 24,183,161
Purchased Power & Exchange 20,923,581 43,663,228 43,663,228
Other 1,405,092 5,084,005 5,084,005
Transmission & Distribution 886,972 3,755,822 3,755,822
Cust. Accts & Services 1,375,937 3,126,750 3,126,750
Administrative & General 3,415,261 8,026,420 8,026,420
Total Operation & Maintenance 34,393,098 87,839,386 87,839,386
Depreciation 1,656,853 6,605,819 6,605,819
Taxes other than income taxes 1,165,412 4,907,185 4,907,185
Federal and state income taxes (2,377,692) (9,204,231) (9,204,231)
Total Operating Expenses 34,837,671 90,148,159 90,148,159
Operating Income (1,914,495) (4,352,353) (4,352,353)
OTHER INCOME AND DEDUCTIONS:
Other income, net 1,123,762 1,458,889 1,458,889
Total Other Income and Deductio 1,123,762 1,458,889 1,458,889
Income Before Interest Charges and
Preferred Dividends (790,733) (2,893,464) (2,893,464)
INTEREST CHARGES AND PREFERRED DIVIDENDS:
Interest on other long-term obligations 2,772,267 10,998,667 10,998,667
Other interest 4,989 24,118 24,118
Total Interest Charges and
Preferred Dividends 2,777,255 11,022,785 11,022,785
Consolidated Net Income (3,567,989) (13,916,249) (13,916,249)
</TABLE>
Unaudited
<PAGE>
AYP Capital, Inc.
CONSOLIDATED BALANCE SHEET
As of December 31, 1997
Assets
Property, plant, and equipment:
At original cost 175,404,888
Accumulated depreciation (6,621,112)
168,783,776
Investments and other assets:
Nonutility investments 4,992,433
4,992,433
Current assets:
Cash and temporary cash investments 12,299,437
Accounts receivable:
Electric service 16,165,512
Other 1,060,715
Allowance for Uncollectible Accounts (6,080)
Accts. Receivable - Affiliates 139,657
Materials and supplies--at average cost:
Operating and construction 2,361,347
Fuel 2,166,526
Other 3,337,138
37,524,252
Deferred charges:
Other 278,139
278,139
Total Assets 211,578,599
Capitalization and Liabilities
Capitalization:
Common stock 1,000
Other paid-in capital 43,869,066
Retained earnings (17,796,876)
26,073,190
Preferred stock:
Long-term debt of subsidiaries 160,000,000
Long-term debt of subsidiaries 0
186,073,190
Current liabilities:
Accounts payable - Affil. 4,010,613
Accounts payable - Other 12,598,101
Taxes accrued:
Federal and state income 1,610,362
Other 1,637,935
Interest accrued 1,838,133
Payrolls Accrued 0
Other 456,176
22,151,321
Deferred credits and other liabilities:
Deferred income taxes 3,095,250
Other 258,837
3,354,087
Total Capitalization and Liabilities 211,578,599
Unaudited
