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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 29, 1998
ALLEGHENY ENERGY, INC.
(Exact name of registrant as specified in its charter)
Maryland 1-267 13-5531602
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
10435 Downsville Pike
Hagerstown, MD 21740
(Address of principal executive offices)
Registrant's telephone number,
including area code: (301) 790-3400
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Item 5. Other Events.
As a result of the Pennsylvania Public Utility Commission ("PUC")
Order, on the Company's Pennsylvania subsidiary's, West Penn Power
Company's, ("West Penn") stand-alone restructuring plan which denied in
part and accepted in part West Penn's claim with respect to stranded
cost recovery under the Electric Generation Customer Choice and
Competition Act ("Competition Act"), West Penn has determined that it
is required to discontinue the application of Statement of Financial
Accounting Standards (SFAS) No. 71 for electric generation operations
and to adopt SFAS No. 101, Accounting for the Discontinuation of
Application of SFAS No. 71. In doing so, West Penn has also determined
that under the provisions of SFAS No. 101 an extraordinary charge of
$451 million is required to reflect a write-off of disallowances in the
PUC's Order. The write-off, recorded in the second quarter, reflects
purchase commitments and deferred costs that are not be recoverable
from customers under the PUC's Order as follows:
AES Beaver Valley non-utility generation contract $202 million
Allegheny Generating Company (Bath County) $177 million
PURPA buyouts, mothballed plants, and regulatory assets $ 72 million
Total $451 million
West Penn has filed legal actions in the United States District
Court for the Western District of Pennsylvania and in the Commonwealth
Court of Pennsylvania challenging the PUC's interpretation of the
Competition Act and alleging numerous errors of law and PUC abuse of
discretion. There can be no assurance that the disallowances in the
PUC's Orders will be modified or rejected in these legal proceedings.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned thereunto duly authorized.
Allegheny Energy, Inc.
Dated: July 27, 1998 By: /s/ Carol G. Russ
Name: Carol G. Russ
Title: Counsel
