<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, 1999
Company Act of 1935) :
___________________________________ :
Through March 31, 1999, Allegheny Energy, Inc.
(Allegheny) has made capital contributions to AYP Capital,
Inc. ("AYP Capital") and its subsidiaries totaling
$62,835,970. See attached consolidated financial statements
for the quarter ended March 31, 1999. During the first
quarter of 1999, 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 1999 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 first quarter. As of the end of
the first quarter of 1999, AYP Capital has invested
$4,642,600 in LAEEF.
D. Real Estate Activities
In March, AYP Capital entered into an agreement, subject
to SEC approval, to purchase property adjacent to
property on whcih AE, Inc's. and Potomac Edison's Corporate
Centers are located. During the quarter, AYP Capital
made a down payment into an escrow account.
E. Insider Heat Pump Distributorship
No new activities.
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 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 March 31,
1999, in connection with AYP Energy's trading
activities, Allegheny had guarantees of support
outstanding in the amount of $49,610,000.
III. Services Provided by AYP Capital to Associate
Companies
AYP Capital did not provide any services to
associate companies during the first quarter of
1999.
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IV. Factoring Activities
AYP Capital did not perform any activities
associated with the factoring of accounts
receivable in the first quarter of 1999.
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 27, 1999
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AYP CAPITAL
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
Quarter Ended Year-to-Date Ended Twelve Months Ended
March 31, 1999 March 31, 1999 March 31, 1999
ELECTRIC OPERATING REVENUES 31,673,829 31,673,829 229,563,939
<S> <C> <C> <C>
OPERATING EXPENSES:
Operation:
Fuel 5,399,347 5,399,347 21,512,172
Purchased Power & Exchange 22,725,737 22,725,737 193,061,280
Other 1,238,327 1,238,327 6,563,821
Transmission & Distribution 525,039 525,039 2,401,936
Cust. Accts & Services 232,620 232,619 2,214,000
Administrative & General 1,616,868 1,616,868 11,000,329
Total Operation & Maintenance 31,737,937 31,737,937 236,753,537
Depreciation 1,444,385 1,444,385 5,816,869
Taxes other than income taxes 1,429,756 1,429,756 6,621,892
Federal and state income taxes (1,829,448) (1,829,448) (10,003,564)
Total Operating Expenses 32,782,630 32,782,630 239,188,735
Operating Income (1,108,801) (1,108,801) (9,624,796)
OTHER INCOME AND DEDUCTIONS:
Other income (loss), net 1,421,065 1,421,065 1,152,779
Total Other Income and Deductions 1,421,065 1,421,065 1,152,779
Income Before Interest Charges and
Preferred Dividends 312,263 312,264 (8,472,017)
INTEREST CHARGES AND PREFERRED DIVIDENDS:
Interest on other long-term obligations 2,381,643 2,381,643 9,934,976
Other interest 25,732 25,732 73,182
Total Interest Charges and
Preferred Dividends 2,407,375 2,407,375 10,008,158
Consolidated Net Income (Loss) (2,095,111) (2,095,111) (18,480,175)
</TABLE>
Unaudited
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AYP Capital, Inc.
CONSOLIDATED BALANCE SHEET
As of March 31, 1999
Assets
Property, plant, and equipment:
At original cost 176,212,663
Accumulated depreciation (12,766,346)
163,446,317
Investments and other assets 10,360,107
Current assets:
Cash and temporary cash investments 5,432,017
Accounts receivable:
Electric service 11,631,076
Other 2,576,141
Allowance for Uncollectible Accounts (44,612)
Affiliates 5,619,325
Materials and supplies--at average cost:
Operating and construction 2,345,771
Fuel 2,397,807
Other 3,261,215
33,218,740
Deferred charges 11,912,683
Total Assets 218,937,847
Capitalization and Liabilities
Capitalization:
Common stock 1,000
Other paid-in capital 62,834,970
Retained earnings (40,206,533)
22,629,437
Long-term debt of subsidiaries 160,000,000
Note & advances payable - affil 12,500
182,641,937
Current liabilities:
Short-term debt 2,100,000
Accounts payable 13,200,599
Accounts payable - Affiliates 5,008,542
Taxes accrued:
Federal and state income 766,934
Other 1,853,618
Interest accrued 1,585,109
Other 455,079
24,969,882
Deferred credits and other liabilities:
Deferred income taxes 6,279,877
Other 5,046,151
11,326,028
Total Capitalization and Liabilities 218,937,847
Unaudited
