<PAGE>
___________________________________
:
IN THE MATTER OF :
:
ALLEGHENY ENERGY, INC. et. al. :
: CERTIFICATE
File No. 70-841 : PURSUANT TO RULE 24
: FOR THE QUARTER ENDED
(Public Utility Holding : DECEMBER 31, 1998
Company Act of 1935) :
___________________________________:
Through December 31, 1998, Allegheny Energy, Inc.
(Allegheny) has made capital contributions to AYP Capital,
Inc. ("AYP Capital") and its subsidiaries totaling
$57,824,244. See attached consolidated financial statements
for the quarter ended December 31, 1998. During the fourth
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 fourth 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.
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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 fourth quarter. As of the end of
the fourth quarter of 1998, AYP Capital has
invested $4,642,600 in LAEEF.
AYP Energy, Inc. gave up its status as an exempt
wholesale generator ("EWG").
D. Real Estate Activities
No new activities.
E. No activity.
F. HVAC and Appliance Warranties/Power Quality Devices
No activity.
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 continues to provide support to AYP
Capital in connection with a $5 million discretionary line
of credit for AYP Capital to be utilized by AYP Capital's
subsidiary, Allegheny Energy Solutions, as working capital.
Allegheny also continues to provide support to AYP Energy
trading activities by providing parent guarantees to AYP
Energy counterparties. As of December 31, 1998, in
connection with AYP Energy's trading activities, Allegheny
had guarantees of support outstanding in the amount of
$49,610,000.
2
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AYP Capital did not perform any activities
associated with the factoring of accounts receivable in the
fourth 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: March 1, 1999
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AYP CAPITAL
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
Quarter Ended Year-to-Date Ended Twelve Months Ended
December 31, 1998 December 31, 1998 December 31, 1998
<S> <C> <C> <C>
ELECTRIC OPERATING REVENUES 27,893,458 246,983,410 246,983,410
OPERATING EXPENSES:
Operation:
Fuel 5,980,311 21,136,727 21,136,727
Purchased Power & Exchange 15,143,708 210,558,867 210,558,867
Other 1,508,893 6,826,387 6,826,387
Transmission & Distribution 416,097 2,373,764 2,373,764
Cust. Accts & Services 590,661 2,814,919 2,814,919
Administrative & General 3,099,089 11,409,460 11,409,460
Total Operation & Maintenance 26,738,759 255,120,124 255,120,124
Depreciation 1,532,532 5,770,210 5,770,210
Taxes other than income taxes 1,651,918 6,881,568 6,881,568
Federal and state income taxes (1,612,474) (10,533,229) (10,533,229)
Total Operating Expenses 28,310,735 257,238,673 257,238,673
Operating Income (417,277) (10,255,263) (10,255,263)
OTHER INCOME AND DEDUCTIONS:
Other income (loss), net 25,678 99,240 99,240
Total Other Income and Deductions 25,678 99,240 99,240
Income Before Interest Charges and
Preferred Dividends (391,599) (10,156,023) (10,156,023)
INTEREST CHARGES AND PREFERRED DIVIDENDS:
Interest on other long-term obligations 2,526,933 10,105,333 10,105,333
Other interest 11,487 53,190 53,190
Total Interest Charges and
Preferred Dividends 2,538,420 10,158,524 10,158,524
Consolidated Net Income (Loss) (2,930,019) (20,314,546) (20,314,546)
Unaudited
</TABLE>
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AYP Capital, Inc.
CONSOLIDATED BALANCE SHEET
As of December 31, 1998
Assets
Property, plant, and equipment:
At original cost 170,797,904
Accumulated depreciation (11,321,961)
159,475,944
Investments and other assets 9,360,538
Current assets:
Cash and temporary cash investments 9,108,046
Accounts receivable:
Electric service 12,309,022
Other 2,397,551
Allowance for Uncollectible Accounts (81,748)
Affiliates 357,452
Materials and supplies--at average cost:
Operating and construction 2,316,277
Fuel 2,560,368
Other 3,221,829
32,188,796
Deferred charges 12,392,456
Total Assets 213,417,734
Capitalization and Liabilities
Capitalization:
Common stock 1,000
Other paid-in capital 53,672,747
Retained earnings (35,181,403)
18,492,344
Long-term debt of subsidiaries 160,000,000
178,492,344
Current liabilities:
Accounts payable 15,009,363
Accounts payable - Affiliates 2,502,490
Taxes accrued:
Federal and state income 6,866,031
Other 3,097,902
Interest accrued 1,675,467
Other 822,730
29,973,982
Deferred credits and other liabilities:
Deferred income taxes 4,150,289
Other 2,287,649
6,437,938
Total Capitalization and Liabilities 214,904,264
Unaudited
