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File No. 70-8411
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
POST-EFFECTIVE AMENDMENT NO. 16
TO
APPLICATION OR DECLARATION
ON
FORM U-1
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
ALLEGHENY POWER SERVICE CORPORATION
800 CABIN HILL DRIVE
GREENSBURG, PA 15601
ALLEGHENY ENERGY, INC.
10435 DOWNSVILLE PIKE
HAGERSTOWN, MD 21740
AYP CAPITAL, INC.
10435 DOWNSVILLE PIKE
HAGERSTOWN, MD 21740
(Name of company or companies filing this statement and addresses
of principal executive offices)
Allegheny Energy, Inc.
(Name of top registered holding company parent of each applicant
or declarant)
Thomas K. Henderson, Esq.
Allegheny Power Service Corporation
10435 Downsville Pike
Hagerstown, MD 21740
(Name and address of agent for service)
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1. Applicants hereby amend ITEM 1. Description of Proposed
Transaction by adding the following language at the end
of ITEM 1:
Allegheny Energy, Inc. ("AE") and AYP Capital, Inc. ("AYP
Capital") now request the Commission to authorize AYP Capital or
a special purpose subsidiary of AYP Capital ("NEWCO") to acquire,
manage and sell real estate in Maryland, Ohio, Pennsylvania,
Virginia and West Virginia. Involvement in these activities
would be for utility purposes, including but not limited to,
leasing the property to one or more of AE's public utility
subsidiaries; for purposes of economic development and growth in
the service territories served by AE's public utility
subsidiaries; and/or for Commission-approved nonutility purposes.
In addition, AYP Capital intends to limit real estate purchases
to the service territories in the above-referenced states served
by AE's public utility subsidiaries: The Potomac Edison Company,
Monongahela Power Company and West Penn Power Company
(hereinafter, the "Utility Subsidiaries").
In addition to the purposes listed above, AYP Capital's
acquisition of real estate located adjacent to or near real
estate currently owned by AYP Capital's associate companies may
enhance and facilitate AYP Capital's management of the real
estate portfolio of its associate companies. Management of the
real estate portfolio of AE and its associate companies by AYP
Capital was previously approved by this Commission in HCAR No.
26590 (October 9, 1996). For example, acquiring real estate
adjacent to or near real estate currently owned by a Utility
Subsidiary could serve as a "buffer zone" or increase access to
public roads, both of which could make the Utility Subsidiary's
property or both parcels more valuable and marketable.
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This Commission has previously approved investment in real
estate related activities by nonutility subsidiaries of
registered holding companies. For example, in HCAR No. 26969
(January 27, 1999), the Commission authorized New England
Electric System to form one or more special purpose subsidiaries
to acquire interests in office and warehouse space for lease to
associate companies. In addition, the Commission has allowed
registered holding companies to retain investments in nonutility
subsidiaries for the purposes noted above. See WPL Holdings,
Inc., HCAR No. 26856 (April 14, 1998) (nonutility subsidiary
which, mainly for economic development purposes, acquires,
manages, and sells real estate in the utility subsidiaries'
service territories); Conectiv, Inc., HCAR No.26832 (February 25,
1998) (nonutility subsidiary which engages in the management and
sale of real estate acquired by utility subsidiary but no longer
useful for utility purposes); Ameren Corporation, HCAR No. 26809
(December 30, 1997)(nonutility subsidiaries which invest in
leveraged leases, including department store properties, and
farmland to be developed into an industrial park); and UNITIL
Corporation, et al., HCAR No. 25524 (April 24, 1992) (nonutility
subsidiary which acquires real estate to support utility
operations).
AE and AYP Capital request this authorization through
December 31, 2004. The authority to spend up to $50 million for
real estate purchases and/or investment in a Real Estate NEWCO
would raise the aggregate financing limit on loans and guarantees
from $300 million to $350 million for all approved activities in
File No. 70-8411.
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2. Applicants hereby amend ITEM 3. Applicable Statutory
Provisions by striking the language previously filed
and substituting therefor:
Applicants are informed by counsel that the proposed
transactions may be subject to Sections 9(a), 10, and 13(b) of
the Public Utility Holding Company Act of 1935 and Rules 87, 90
and 91 thereunder. Issuance of notes in connection with this
transaction are exempt under Rule 52.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly caused this
statement to be signed on its behalf by the undersigned thereunto
duly authorized.
ALLEGHENY ENERGY, INC.
By: /s/
Kathy L. Mitchell
Counsel
AYP CAPITAL, INC.
By: /s/
Kathy L. Mitchell
Counsel
ALLEGHENY POWER SERVICE CORPORATION
By: /s/
Kathy L. Mitchell
Counsel
Dated: April 16, 1999
