Page 1 of 15
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter ended September 30, 1994
Commission File Number 1-5164
MONONGAHELA POWER COMPANY
(Exact name of registrant as specified in its charter)
Ohio 13-5229392
(State of Incorporation) (I.R.S. Employer Identification No.)
1310 Fairmont Avenue, Fairmont, West Virginia 26554
Telephone number 304-366-3000
The registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months and (2) has been subject to such filing requirements
for the past 90 days.
At November 9, 1994, 5,891,000 shares of the common stock ($50 par
value) of the registrant were outstanding, all of which is held by
Allegheny Power System, Inc., the Company's parent.
<PAGE>
- 2 -
MONONGAHELA POWER COMPANY
Form 10-Q for Quarter Ended September 30, 1994
______________________________________________
Index
_____
Page
No.
____
PART I - FINANCIAL INFORMATION:
______________________________
Statement of income -
Three and nine months ended September 30, 1994 and 1993 3
Balance sheet -
September 30, 1994 and December 31, 1993 4
Statement of cash flows -
Nine months ended September 30, 1994 and 1993 5
Notes to financial statements 6 - 7
Management's discussion and analysis of financial condition
and results of operations 8 - 13
PART II - OTHER INFORMATION 14 - 15
___________________________
<PAGE>
- 3 -
<TABLE>
<CAPTION>
MONONGAHELA POWER COMPANY
Statement of Income
_________________________
Three Months Ended Nine Months Ended
September 30 September 30
__________________ _________________
1994 1993 1994 1993
____ ____ ____ ____
(Thousands of Dollars)
ELECTRIC OPERATING REVENUES:
<S> <C> <C> <C> <C>
Residential $ 45,800 $ 47,565 $143,954 $137,520
Commercial 30,395 30,392 86,827 82,401
Industrial 49,441 46,562 148,861 139,375
Nonaffiliated utilities 18,164 19,289 63,182 65,358
Other, including affiliates 22,132 21,681 68,957 51,618
________ ________ ________ ________
Total Operating Revenues 165,932 165,489 511,781 476,272
________ ________ ________ ________
OPERATING EXPENSES:
Operation:
Fuel 37,265 36,047 116,151 109,701
Purchased power and exchanges, net 38,650 41,793 122,564 111,605
Deferred power costs, net 1,121 (694) 5,569 (2,139)
Other 18,214 16,591 53,196 49,897
Maintenance 17,915 16,673 52,271 50,078
Depreciation 14,709 14,126 44,176 42,273
Taxes other than income taxes 10,098 8,686 30,883 25,089
Federal and state income taxes 7,347 10,229 25,209 26,267
________ ________ ________ ________
Total Operating Expenses 145,319 143,451 450,019 412,771
________ ________ ________ ________
Operating Income 20,613 22,038 61,762 63,501
________ ________ ________ ________
OTHER INCOME AND DEDUCTIONS:
Allowance for other than borrowed funds
used during construction 348 463 1,431 2,344
Other income, net 1,859 1,943 5,476 5,878
________ ________ ________ ________
Total Other Income and Deductions 2,207 2,406 6,907 8,222
________ ________ ________ ________
Income Before Interest Charges 22,820 24,444 68,669 71,723
________ ________ ________ ________
INTEREST CHARGES:
Interest on long-term debt 8,821 8,739 26,298 26,817
Other interest 780 570 2,261 1,335
Allowance for borrowed funds used during
construction (304) (652) (1,215) (2,039)
________ ________ ________ ________
Total Interest Charges 9,297 8,657 27,344 26,113
________ ________ ________ ________
NET INCOME $ 13,523 $ 15,787 $ 41,325 $ 45,610
________ ________ ________ ________
________ ________ ________ ________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
- 4 -
<TABLE>
<CAPTION>
MONONGAHELA POWER COMPANY
BALANCE SHEET
September 30 December 31
1994 1993
____________ ___________
ASSETS: (Thousands of Dollars)
Property, Plant, and Equipment:
At original cost, including $165,744,000 and
<S> <C> <C>
$144,621,000 under construction $1,742,925 $1,684,322
Accumulated depreciation (695,357) (664,947)
__________ __________
1,047,568 1,019,375
__________ __________
Investments:
Allegheny Generating Company - common stock at equity 60,164 61,698
Other 534 595
__________ __________
60,698 62,293
__________ __________
Current Assets:
Cash 162 135
Accounts receivable:
Electric service, net of $962,000 and $1,084,000
uncollectible allowance 43,689 48,995
Affiliated and Other 7,905 14,596
Materials and supplies - at average cost:
Operating and construction 23,316 22,393
Fuel 22,930 19,904
Property taxes 16,847 15,443
Deferred power costs 5,154 10,823
Other 3,863 8,117
__________ __________
123,866 140,406
__________ __________
Deferred Charges:
Regulatory assets 166,928 162,842
Unamortized loss on reacquired debt 11,682 12,229
Other 18,877 10,308
__________ __________
197,487 185,379
__________ __________
Total Assets $1,429,619 $1,407,453
__________ __________
__________ __________
CAPITALIZATION AND LIABILITIES:
Capitalization:
Common stock $ 294,550 $ 294,550
Other paid-in capital 2,629 2,994
Retained earnings 184,342 185,486
__________ __________
481,521 483,030
Preferred stock - not subject to mandatory redemption 114,000 64,000
Long-term debt 470,060 460,129
__________ __________
1,065,581 1,007,159
__________ __________
Current Liabilities:
Short-term debt 27,798 63,100
Accounts payable 27,209 31,752
Accounts payable to affiliates 7,357 8,184
Taxes accrued:
Federal and state income 1,299 -
Other 18,061 21,261
Interest accrued 10,656 10,641
Other 20,880 18,994
__________ __________
113,260 153,932
__________ __________
Deferred Credits and Other Liabilities:
Unamortized investment credit 25,272 26,883
Deferred income taxes 194,973 192,466
Regulatory liabilities 18,365 19,179
Other 12,168 7,834
__________ __________
250,778 246,362
__________ __________
Total Capitalization and Liabilities $1,429,619 $1,407,453
__________ __________
__________ __________
See the accompanying notes to financial statements.
</TABLE>
<PAGE>
- 5 -
<TABLE>
<CAPTION>
MONONGAHELA POWER COMPANY
Statement of Cash Flows
_________________________
Nine Months Ended
September 30
_______________________
1994 1993
____ ____
(Thousands of Dollars)
CASH FLOWS FROM OPERATIONS:
<S> <C> <C>
Net income $ 41,325 $ 45,610
Depreciation 44,176 42,273
Deferred investment credit and income taxes, net (2,369) 4,525
Deferred power costs, net 5,569 (2,139)
Unconsolidated subsidiaries' dividends in excess of earnings 1,595 2,562
Allowance for other than borrowed funds used during construction (1,431) (2,344)
Changes in certain current assets and liabilities:
Accounts receivable, net 11,997 550
Materials and supplies (3,949) 9,045
Accounts payable (5,370) (5,155)
Taxes accrued (1,901) (6,706)
Interest accrued 15 199
Other, net 2,094 6,786
________ ________
91,751 95,206
________ ________
CASH FLOWS FROM INVESTING:
Construction expenditures (74,737) (98,699)
Allowance for other than borrowed funds used
during construction 1,431 2,344
________ ________
(73,306) (96,355)
________ ________
CASH FLOWS FROM FINANCING:
Sale of preferred stock 49,635 -
Issuance of long-term debt 9,718 78,145
Retirement of long-term debt - (68,471)
Short-term debt, net (35,302) 32,043
Dividends on capital stock:
Preferred stock (5,179) (3,344)
Common stock (37,290) (37,172)
________ ________
(18,418) 1,201
________ ________
NET CHANGE IN CASH AND TEMPORARY CASH INVESTMENTS 27 52
Cash and Temporary Cash Investments at January 1 135 115
________ ________
Cash and Temporary Cash Investments at September 30 $ 162 $ 167
________ ________
________ ________
Supplemental cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $ 26,497 $ 25,550
Income taxes 23,367 21,910
See accompanying notes to financial statements.
</TABLE>
<PAGE>
- 6 -
MONONGAHELA POWER COMPANY
Notes to Financial Statements
_____________________________
1. The Company's Notes to Financial Statements in the Allegheny
Power System companies' combined Annual Report on Form 10-K for
the year ended December 31, 1993, should be read with the
accompanying financial statements and the following notes. With
the exception of the December 31, 1993 balance sheet in the
aforementioned annual report on Form 10-K, the accompanying
financial statements appearing on pages 3 through 5 and these
notes to financial statements are unaudited. In the opinion of
the Company, such financial statements together with these notes
thereto contain all adjustments (which consist only of normal
recurring adjustments) necessary to present fairly the Company's
financial position as of September 30, 1994, the results of
operations for the three and nine months ended September 30,
1994 and 1993, and cash flows for the nine months ended
September 30, 1994 and 1993.
2. The Statement of Income reflects the results of past operations and
is not intended as any representation as to future results. For
purposes of the Balance Sheet and Statement of Cash Flows, temporary
cash investments with original maturities of three months or less,
generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of
cash.
3. On August 10, 1994, the Company issued $8.825 million of 6.75%,
30-year solid waste disposal revenue notes, the proceeds of which are
being used on the Harrison Power Station scrubber project. On
May 11, 1994, the Company issued $50 million of $100 par value
cumulative preferred stock with a dividend of $7.73. Proceeds from
the sale were used to repay outstanding short-term debt and for other
corporate purposes.
4. The Company owns 27% of the common stock of Allegheny Generating
Company (AGC), and affiliates of the Company own the remainder. AGC
owns an undivided 40% interest, 840 MW, in the 2,100-MW
pumped-storage hydroelectric station in Bath County, Virginia
operated by the 60% owner, Virginia Power Company, an unaffiliated
utility. Following is a summary of income statement information for
AGC:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
__________________ _________________
1994 1993 1994 1993
____ ____ ____ ____
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Electric operating revenues $22,337 $23,391 $66,637 $70,544
_______ _______ _______ _______
Operation & maintenance
expense 1,653 1,312 4,930 4,953
Depreciation 4,236 4,225 12,708 12,677
Taxes other than income taxes 1,399 1,298 4,267 3,897
Federal income taxes 3,498 4,001 10,419 10,899
Interest charges 4,467 5,199 13,380 16,158
Other income, net (3) (9) (10) (102)
_______ _______ _______ _______
Net income $ 7,087 $ 7,365 $20,943 $22,062
_______ _______ _______ _______
_______ _______ _______ _______
</TABLE>
<PAGE>
- 7 -
The Company's share of the equity in earnings above was $1.9 million
and $2.0 million for the three months ended September 30, 1994 and
1993, respectively, and $5.7 million and $6.0 million for the nine
months ended September 30, 1994 and 1993, respectively. These
amounts were included in other income, net, on the Statement of
Income.
5. Common stock dividends per share declared and paid during the periods
for which income statements are included are as follows:
<TABLE>
<CAPTION>
1994 1993
___________________________ ___________________________
Number of Amount Number of Amount
Shares per Share Shares per Share
_________ _________ _________ _________
<S> <C> <C> <C> <C>
First quarter 5,891,000 $2.29 5,891,000 $2.11
Second quarter 5,891,000 $2.27 5,891,000 $2.09
Third quarter 5,891,000 $1.77 5,891,000 $2.11
</TABLE>
Earnings per share are not reported inasmuch as the common stock of
the Company is 100% owned by its parent, Allegheny Power System, Inc.
<PAGE>
- 8 -
MONONGAHELA POWER COMPANY
Management's Discussion and Analysis of Financial Condition
and Results of Operations
__________________________________________________________
COMPARISON OF THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1994
WITH THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1993
NET INCOME
Net income for the third quarter and first nine months of
1994 was $13.5 million and $41.3 million, respectively, compared with
$15.8 million and $45.6 million for the corresponding 1993 periods. The
decreases in net income for the third quarter and first nine months of
1994 reflect increased depreciation, power station costs, and other
expenses, and for the first nine months also include increased taxes,
offset in part by greater kilowatthour (kWh) sales to retail customers.
SALES AND REVENUES
Retail kWh sales to residential and commercial customers
decreased 5% and 2%, respectively, and to industrial customers increased
7% for the third quarter. Retail kWh sales to residential, commercial,
and industrial customers increased 2%, 2%, and 4%, respectively, for the
first nine months. The change in kWh sales to residential and commercial
customers was primarily due to variances in weather-related sales and
growth in the number of customers. Moderate temperatures this summer
resulted in cooling degree days in the third quarter 19% below normal and
35% lower than during the corresponding 1993 quarter. The increases in
kWh sales to industrial customers resulted primarily from increased sales
to coal mining, chemical, and primary metals customers. Sales to coal
customers increased due to reduced usage in the 1993 third quarter caused
by selective work stoppages by the United Mine Workers of America at that
time. Sales to one of two large industrial customers that suffered fire
damages in the second quarter of 1994 will have substantially returned to
normal levels by the end of the fourth quarter of 1994. The increases in
revenues from retail customers resulted from the following:
<PAGE>
- 9 -
<TABLE>
<CAPTION>
Increase from Prior Periods
___________________________
Quarter Nine Months
_______ ___________
(Millions of Dollars)
<S> <C> <C>
Increase (decrease) in kWh sales (1) $(1.5) $ 2.8
Fuel and energy cost adjustment clauses (2) .8 12.5
Rate increases (3) 1.7 4.4
Other .1 .6
_____ _____
$ 1.1 $20.3
_____ _____
_____ _____
(1) Revenues from sales to retail customers decreased despite an overall increase of 2% in kWh sales
due in part to reduced demand charges on industrial customer billings.
(2) Changes in revenues from fuel and energy cost adjustment clauses have little effect on net
income.
(3) Reflects a surcharge in West Virginia for recovery of carrying charges on expenditures to comply
with the Clean Air Act Amendments of 1990 (CAAA), designed to produce $3.1 million on an annual
basis effective July 1, 1992, which was increased to $8.7 million on an annual basis effective on
July 1, 1993 and further increased to $15.5 million effective July 1, 1994.
</TABLE>
KWh sales to and revenues from nonaffiliated utilities are comprised of
the following items:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
__________________ ________________
September 30 September 30
1994 1993 1994 1993
____ ____ ____ ____
KWh sales (in billions):
<S> <C> <C> <C> <C>
From Company generation .1 - .3 .3
From purchased power .4 .6 1.6 2.0
_____ _____ ______ ______
.5 .6 1.9 2.3
_____ _____ ______ ______
Revenues (in millions):
From Company generation $ 1.4 $ .2 $ 6.7 $ 7.9
From sales of purchased power 16.8 19.1 56.5 57.5
_____ _____ ______ ______
$18.2 $19.3 $63.2 $65.4
_____ _____ ______ ______
_____ _____ ______ ______
</TABLE>
Sales from Company generation increased in the third quarter
because of the decrease in weather-related kWh sales to retail customers
and the availability of Company's generating units. Sales from purchased
power varies depending on the availability of eastern utilities' generat-
ing equipment, demand for energy, and competition.
- 10 -
The increase in other revenues resulted primarily from an
increase in sales of capacity, energy, and spinning reserve to affiliated
companies because of additional capacity and energy available from a new
qualified facility under the Public Utility Regulatory Policies Act of
1978 (PURPA) commencing in July 1993. About 90% of the aggregate benefits
from sales to affiliated and nonaffiliated utilities is passed on to
retail customers and has little effect on net income.
OPERATING EXPENSES
Fuel expenses for the third quarter and the first nine months of
1994 increased 3% and 6%, respectively, due primarily to increases of 4%
and 5% in kWh's generated. Fuel expenses are primarily subject to
deferred power cost accounting procedures with the result that changes in
fuel expenses have little effect on net income.
"Purchased power and exchanges, net" represents power purchases
from and exchanges with nonaffiliated utilities, purchases from qualified
facilities under the Public Utility Regulatory Policies Act of 1978
(PURPA), capacity charges paid to Allegheny Generating Company (AGC), and
other transactions with affiliates made pursuant to a power supply agree-
ment whereby each company uses the most economical generation available in
the Allegheny Power System at any given time, and is comprised of the
following items:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
__________________ _________________
1994 1993 1994 1993
____ ____ ____ ____
(Millions of Dollars)
Nonaffiliated transactions:
Purchased power:
<S> <C> <C> <C> <C>
For resale to other utilities $14.9 $16.9 $ 50.0 $ 50.7
From PURPA generation 17.0 15.6 49.2 38.4
Other 2.0 4.1 7.4 5.6
Power exchanges, net (.7) (.7) (.5) (1.0)
Affiliated transactions:
AGC capacity charges 5.4 5.8 16.0 17.5
Energy and spinning reserve charges - .1 .5 .4
_____ _____ ______ ______
$38.6 $41.8 $122.6 $111.6
_____ _____ ______ ______
_____ _____ ______ ______
</TABLE>
The amount of power purchased from nonaffiliated utilities for
use by the Company and for resale to nonaffiliated utilities depends upon
the availability of the Company's generating equipment, transmission
capacity, and fuel, and its cost of generation and the cost of operations
of nonaffiliated utilities from which such purchases are made. The cost
of power purchased for use by the Company, including power from PURPA
generation and affiliated companies, is mostly recovered from customers
currently through the regular fuel and energy cost recovery procedures
followed by the Company's regulatory commissions and is primarily subject
to deferred power cost procedures with the result that changes in such
costs have little effect on net income. The increase in purchases from
PURPA generation reflects additional generation from a new PURPA project
commencing in July 1993. As described under SALES AND REVENUES above, the
decrease in
<PAGE>
- 11 -
weather-related sales to retail customers, combined with the availability
of the Company's generating units and the requirement to purchase
higher-priced PURPA generation, resulted in decreased purchases from
nonaffiliated utilities in the third quarter. The primary reason for the
fluctuation in purchases for resale to nonaffiliated utilities is also
described under SALES AND REVENUES above.
The increases in other operation expenses resulted primarily
from first quarter charges for previously reported asbestos suits and a
Superfund site cleanup, and an SEC-directed larger allocation of the
Parent's corporate expenses for shareholder-related activities.
Maintenance expenses represent costs incurred to maintain the
power stations, the transmission and distribution (T&D) system, and
general plant, and reflect routine maintenance of equipment and
rights-of-way as well as planned major repairs and unplanned expenditures,
primarily from forced outages at the power stations and periodic storm
damage on the T&D system. In early January 1994, the Company experienced
the worst storm in its history with nearly $7 million of damage to its
facilities. The expenses were deferred causing the increase in other
deferred charges in the first nine months of 1994, and will be amortized
over a five-year period beginning in November 1994, concurrent with
recovery from customers. The Company is experiencing, and expects to
continue to experience, increased expenditures due to the aging of its
power stations. Variations in maintenance expense result primarily from
unplanned events and planned major projects, which vary in timing and
magnitude depending upon the length of time equipment has been in service
without a major overhaul, the amount of work found necessary when equip-
ment is dismantled, and outage requirements to comply with the CAAA.
The increase in depreciation expense for the third quarter and
first nine months of 1994 resulted primarily from additions to electric
plant. As part of the ratemaking process, the Company filed a
"depreciation" rate case in 1994 to establish an appropriate ongoing level
of depreciation. The result of that case will be a reduction in deprecia-
tion rates in November 1994, concurrent with new revenues from the
January 18, 1994 general rate case described above and a further reduction
in January 1996. These reductions of about $7 million and $4 million,
respectively, will result in depreciation rates for the Company which are
comparable to those of other electric utilities, particularly those
providing service in West Virginia. Because of the increased levels of
capital expenditures as a result of the CAAA and the replacement of aging
equipment at the Company's power stations, depreciation expense is
expected to increase over the next few years regardless of the deprecia-
tion reductions described, including an increase in the fourth quarter of
1994 commensurate with the in-service date of the Harrison Power Station
scrubber project.
Taxes other than income taxes increased $1.4 million for the
quarter and $5.8 million for the first nine months of 1994 due primarily
to a prior period adjustment recorded in 1993 for West Virginia Business
and Occupation taxes. The net decreases of $2.9 and $1.1 million in
federal and state income taxes for the third quarter and first nine-month
periods, respectively, resulted from decreases in income before taxes.
<PAGE>
- 12 -
The combined decreases of $.5 million and $1.7 million in
allowance for funds used during construction (AFUDC) for the third quarter
and first nine-month periods, respectively, reflect increases in the
current recovery of carrying charges on CAAA expenditures in lieu of
recording AFUDC.
Interest on long-term debt decreased $.5 million for the first
nine months due primarily to interest savings from debt refinancings in
1993. Fluctuations in other interest expense as well as other income,
net, reflect changes in the levels of short-term debt and temporary
investments maintained by the companies.
LIQUIDITY AND CAPITAL RESOURCES
The Company's discussion on Liquidity and Capital Resources in
the Allegheny Power System companies' combined Annual Report on Form 10-K
for the year ended December 31, 1993, should be read with the following
information.
On November 9, 1994, the Public Service Commission of West Virginia
issued an order in the Company's base rate case, summarily affirming the
Administrative Law Judge's (ALJ) recommended decision of September 30, 1994.
The order authorized an increase in annual revenues of $23.5 million effective
November 16, 1994. Due to time constraints which precluded the Commission
from addressing the exceptions filed on the ALJ's recommendations, the
Commission invited the parties to file petitions for reconsideration of issues
raised in the exceptions. The Company plans to file a petition for
reconsideration and, in the meantime, will place the new rates in effect
subject to further revisions when the Commission completes its reconsideration.
This increase,along with a Settlement Agreement filed with the Federal Energy
Regulatory Commission for wholesale customers and an additional rate increase
request to be filed in Ohio, includes recovery of the remaining carrying
charges on investment, depreciation, and operating costs required to comply
with Phase I of the CAAA, and other increasing levels of expenses. New reve-
nues in Ohio will not take effect until late 1995, however the Public
Utilities Commission of Ohio has issued an accounting order allowing the
Company to accrue post-in-service carrying charges on the CAAA investment
and defer related depreciation and operating costs.
In the normal course of business, the Company is subject to
various contingencies and uncertainties relating to its operations and
construction programs, including cost recovery in the regulatory process,
laws, regulations and uncertainties related to environmental matters, and
legal actions.
As previously reported, the Company is currently named as a
defendant along with multiple other affiliated and nonaffiliated
defendants in 2,343 pending asbestos cases involving multiple plaintiffs,
including 91 new cases filed in the third quarter of 1994. While the
cumulative number of claims appears to be significant, previous cases have
been settled for an amount substantially less than the anticipated cost of
defense, and it is believed that more than half of the cases relate solely
to other defendants. The Company believes that the remaining cases
involving it are without merit and that provisions for liabilities and
insurance recoveries are such that these suits will not have a material
effect on their financial position.
<PAGE>
- 13 -
The Company previously reported that the Environmental Protec-
tion Agency (EPA) had identified it and its affiliates and approximately
875 others as potentially responsible parties in a Superfund site subject
to cleanup. A Remedial Investigation/Feasibility Study prepared by the
EPA indicates remedial alternatives which range as high as $113 million,
to be shared by all responsible parties. The EPA has not yet selected
which remedial alternative it will use. The Company believes it has
defenses to allegations of liability and intends to vigorously defend this
matter. Although it is not possible at this time to determine what costs,
if any, the Company may incur, it has recorded provisions for liabilities
based on the range of remediation cost estimates and its relative partici-
pation, along with its affiliates and the approximately 875 others. The
Company believes that provisions for liabilities and insurance recoveries
are such that final resolution of this matter will not have a material
effect on its financial position.
<PAGE>
- 14 -
MONONGAHELA POWER COMPANY
Part II-Other Information to Form 10-Q
for Quarter Ended September 30, 1994
______________________________________
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDER
_______ _________________________________________________
1. (a) Date and Kind of Meeting:
None
(b) Election of Directors:
None
(c) Other Matters Voted Upon:
(1) The holder of all of the outstanding common stock
of the Company consented in writing on September 8,
1994 to an amendment of the Company's Code of
Regulations effective September 8, 1994, which
increased the number of directors from twelve
to fourteen.
A. The following persons were elected by the
Board of Directors as Directors of the
Company to fill the vacancies created by
the increase in the number of Directors to
hold office until the next annual meeting
of shareholders and until their successors
are duly chosen and qualified:
Wendell F. Holland
Alan J. Noia
ITEM 5. OTHER INFORMATION
On September 8, 1994, the Board of Directors of the Company elected
Jay S. Pifer as its President and a member of the Board of Directors
effective January 1, 1995, to replace Benjamin H. Hayes who will retire
effective December 31, 1994.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) 1. Vote and Approval of Shareholders dated September 8, 1994.
2. Code of Regulations of Monongahela Power Company, as
amended September 8, 1994.
(b) No reports on Form 8-K were filed on behalf of the Company for
the quarter ended September 30, 1994.
<PAGE>
- 15 -
Signature
_________
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.
MONONGAHELA POWER COMPANY
November 14 , 1994 S/Richard E. Myers
_________________________
Richard E. Myers,
Comptroller
(Chief Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000067646
<NAME> MONONGAHELA POWER COMPANY
<MULTIPLIER> 1,000
<CURRENCY> 0
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1993
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<EXCHANGE-RATE> 1
<CASH> 162
<SECURITIES> 0
<RECEIVABLES> 52,556
<ALLOWANCES> (962)
<INVENTORY> 46,246
<CURRENT-ASSETS> 123,866
<PP&E> 1,742,925
<DEPRECIATION> (695,357)
<TOTAL-ASSETS> 1,429,619
<CURRENT-LIABILITIES> 113,260
<BONDS> 470,060
<COMMON> 294,550
0
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MONONGAHELA POWER COMPANY
VOTE AND APPROVAL
Pursuant to Article VII of the Code of Regulations of Monongahela
Power Company, an Ohio corporation, the undersigned, Allegheny Power
System, Inc., a Maryland corporation, being the holder of all of the
outstanding shares of Common Stock of Monongahela Power Company and the
only shareholder who would be entitled to vote at a meeting of the
shareholders of said Company held for the purpose of adopting the
amendment contained in the following resolution, hereby gives its written
consent to the adoption of said resolution and amendment:
RESOLVED, that effective September 8, 1994,
the third sentence of Section 1 of ARTICLE II of
the Code of Regulations is hereby amended to
change the word "twelve" to "fourteen."
ALLEGHENY POWER SYSTEM, INC.
By RICHARD J. GAGLIARDI
Richard J. Gagliardi
Vice President
Dated: September 8, 1994
(SEAL) ATTEST:
By EILEEN M. BECK
Eileen M. Beck
Secretary
CODE OF REGULATIONS
OF
MONONGAHELA POWER COMPANY
(As Amended)
September 8, 1994
**********
ARTICLE I
SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the
shareholders shall be held at the office of the Company, in the City of
Marietta, Ohio, or the City of Fairmont, West Virginia, as designated in
the notice of such meeting, at 10 o'clock in the forenoon on the Third
Monday in April in each year, or, if that be a legal holiday, then on the
next business day, for the purpose of electing directors and for the
transaction of such other business as may properly be brought before the
meeting.
SECTION 2. SPECIAL MEETINGS. Special meetings of the
shareholders may be called at any time by a majority of the members of the
Board of Directors or by the Chairman of the Board, the President, any
Vice President, or the Secretary, or any number of shareholders owning in
the aggregate at lest twenty-five percent of the number of shares
outstanding and entitled to vote. Special meetings of the shareholders
may be held either within or without the State of Ohio.
SECTION 3. NOTICE OF MEETINGS. Notice of each annual or special
meeting of the shareholders shall be given in writing by the Secretary, or
in case of his refusal, by the shareholders, person or persons entitled to
call such meeting, and shall state the purpose or purposes for which the
meeting is called and the time when and the place where it is to be held.
A copy of such notice shall be served upon or mailed to each shareholder
of record entitled to vote at such meeting or entitled to notice thereof
not more than sixty days nor less than seven days before such meeting. If
mailed, such notice shall be directed to the shareholder at his address as
it appears upon the records of the Corporation. Notice of the time, place
and purposes of any meeting of shareholders may be waived in writing,
either before or after the holding of such meeting, by any shareholder,
which writing shall be filed with the records of the meeting.
SECTION 4. QUORUM. A quorum of the shareholders shall consist of
the shareholders owning at least a majority of all of the shares entitled
to vote at the meeting except that, at any meeting of shareholders for the
election of directors when the holders of Cumulative Preferred Stock shall
be entitled to elect a majority of the Board of Directors, a quorum shall
be as provided in the Charter. Any number less than a quorum present may
adjourn any shareholders' meeting until a quorum is present.
SECTION 5. CHAIRMAN. Meetings of the shareholders shall be
presided over by the Chairman of the Board or, in his absence, by the
President or, in his absence, by a Vice President or, if no such officer
is present, by a Chairman to be chosen at the meeting. The Secretary of
the Company or, in his absence, an Assistant Secretary or, if no such
officer is present, a secretary appointed at the meeting shall act as
secretary of such meeting.
<PAGE>
SECTION 6. VOTING. In all elections of directors each
shareholder shall have the right to cast one vote for each share owned by
him and entitled to a vote, and he may cast the same in person or by proxy
for as many persons as there are directors to be elected, or he may
cumulate such votes and give one candidate as many votes as the number of
directors to be elected multiplied by the number of his shares shall
equal, or he may distribute them on the same principle among as many
candidates and in such manner as he shall desire.
On any question to be determined by a vote of shares at any meeting
of shareholders, other than the election of directors, each shareholder
shall be entitled to one vote for each share owned by him and entitled to
a vote at such meeting, and he may exercise this right in person or by
proxy.
SECTION 7. ANNUAL REPORT. An annual financial statement,
consisting of a balance sheet and statements of profit and loss and
surplus, duly certified in accordance with the laws of Ohio, shall be
submitted at the annual meeting of the shareholders.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. NUMBER; TIME OF HOLDING OFFICE; PRESIDING OFFICER.
The business of the Company shall be managed by its Board of Directors.
They shall be elected at each annual meeting of the shareholders or at
special meetings of shareholders held as provided in the Charter. The
Board shall consist of fourteen directors. Each director shall be elected
to serve until his successor shall be elected and shall qualify but the
term of office of any director shall terminate upon the conditions and at
the time specified in the Charter. Directors need not be shareholders or
residents of the State of Ohio.
SECTION 2. EXECUTIVE AND OTHER COMMITTEES. The Board may create
an Executive Committee or any other Committee of the directors to consist
of not less than three directors. Each other Committee shall have such
authority as the Board shall give it. The Board may appoint one or more
directors as alternate members of the Executive Committee or any other
Committee to take the place of any absent member or members at any meeting
thereof. The Executive Committee and each other Committee may act by a
writing or writings signed by all its members or by means of conference
telephone or similar communications equipment by which all persons
participating can simultaneously hear each other. Participation in a
meeting by these communications means constitutes presence in person at
the meeting. The Executive Committee, except when the Board of Directors
is in session, shall possess and exercise all of the authority and powers
of the Board of Directors however conferred, other than that of filling
vacancies among the directors or in any committee of the directors.
SECTION 3. VACANCIES. Vacancies in the Board of Directors
(including those created by an increase in the number of directors) may be
filled by a majority of the remaining directors, though less than a
quorum, except that vacancies occurring at a time when the holders of
Cumulative Preferred Stock are entitled to elect a majority of the Board
of Directors shall be filled as provided in the Charter.
SECTION 4. PLACE OF MEETINGS. Meetings of the Board may be held
at any place within or without the State of Ohio.
<PAGE>
SECTION 5. CALLING AND NOTICE OF MEETINGS. Meetings of the Board
may be called by the Chairman of the Board, the President, any Vice
President, or any two directors. Notice need not be given of any meeting
of the Board if the time and place of such meeting are specified in a
resolution of the Board prior to the meeting and if notice of the adoption
of such resolution is given, in the manner herein provided for giving
notice of meetings, to each director who was absent from the meeting at
which the resolution was adopted. Notice need not be given of any
adjourned meeting other than by announcement at the meeting at which the
adjournment is taken. Except as otherwise required by law, notice of the
time and place of each other meeting of the Board shall be given to each
director in writing at least two days, or given personally or by telephone
at least 24 hours, before the time for the meeting. Such notice need not
specify the purposes of the meeting.
SECTION 6. WAIVER OF NOTICE OF MEETING. No notice of the time,
place or purpose of any meeting of stockholders or directors, or of any
committee, or any publication thereof, whether prescribed by law, by the
Charter, or by this Code of Regulations, need be given to any person who
attends the meeting without protesting, prior to or at the commencement of
the meeting, the lack of proper notice, or who, in writing executed either
before or after the meeting and filed with records of the meeting, waives
such notice, and such attendance or waiver shall be deemed equivalent to
notice.
SECTION 7. QUORUM. One third of the authorized number of
directors, but not less than two directors, shall be necessary and
sufficient to constitute a quorum for a meeting of the Board. If a quorum
shall not be present, the directors present thereat may adjourn the
meeting from time to time until a quorum shall be present. The act of a
majority of the directors present at any meeting at which there is a
quorum present or by a writing or writings signed by all its members or by
means of conference telephone or similar communications equipment by which
all persons participating can simultaneously hear each other shall be the
act of the Board of Directors. Participation in a meeting by these
communications means constitutes presence in person at the meeting.
SECTION 8. POWERS OF DIRECTORS. The Board may exercise all of
the powers of the Company, except such as are by law or by the Charter or
by the Regulations conferred upon or reserved to the shareholders.
SECTION 9. COMPENSATION OF DIRECTORS. In addition to
reimbursement of his reasonable expenses incurred in attending meetings or
otherwise in connection with his attention to the affairs of the Company,
each director, as such, and as a member of the Executive Committee or of
any other Committee of the Board, shall be entitled to receive such
remuneration as may be fixed from time to time by the Board of Directors,
in the form either of payment at the rate of a fixed sum per month or of
fees for attendance at meetings of the Board and committees thereof.
ARTICLE III
OFFICERS
SECTION 1. OFFICERS. The Board shall, at its first meeting after
each annual meeting of shareholders, choose a Chairman of the Board, a
President, one or more Vice-Presidents, a Secretary and one or more
Assistant Secretaries, a Treasurer and one or more Assistant Treasurers,
and a Comptroller and one or more Assistant Comptrollers; and it may from
<PAGE>
time to time appoint such other officers and agents as it may deem proper.
Any two or more of the offices, except those of President and Vice-
President, may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument in more than one capacity if such
instrument is required by law or by the Charter or these Regulations to be
executed, acknowledged, or verified by two or more officers.
The Chairman of the Board shall be chosen from among the directors,
but no other officer need be a director.
SECTION 2. TERM OF OFFICE. All officers shall hold office until
their successors are respectively chosen and qualified or until removed.
The Board may fill any vacancy which may occur in any office. All
officers and agents shall be removable with or without cause by the Board;
provided, however, that the word "officer", as used by these Regulations,
shall not be construed to mean "director".
SECTION 3. CHAIRMAN OF THE BOARD. The Chairman of the Board
shall be the chief executive officer of the Company, shall preside at all
meetings of shareholders and, at all meetings of the Board of Directors
and of the Executive Committee. He shall have direct charge of the
business of the Company, subject to the control of the Board, and shall do
and perform all acts and things incidental to the position of chief
executive officer. He shall have such other powers and duties as may from
time to time be assigned to him by the Board of Directors.
SECTION 4. OTHER OFFICERS. Subject to the foregoing, the
officers of the Company shall each have such powers and duties as
generally pertain to their respective offices, as well as such powers and
duties as may from time to time be assigned to them by the Board of
Directors or the Chairman of the Board. The Treasurer and the Assistant
Treasurers may be required to give bond for the faithful discharge of
their duties, in such sum and with such surety or sureties as the Board of
Directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
SECTION 1. CERTIFICATES FOR SHARES. Every holder of shares of
the Company shall be entitled to one or more certificates signed by the
Chairman of the Board or the President or a Vice-President and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Company, which shall certify the number and class of
shares held by him in the Company. When such certificate is countersigned
by an incorporated transfer agent or registrar, the signature of any such
officer may be facsimile.
Although any officer whose manual or facsimile signature is affixed
to such a certificate ceases to be such officer before the certificate is
delivered by the Company, such certificate nevertheless shall be effective
in all respects when delivered.
SECTION 2. TRANSFER BOOKS. A book or books for the transfer of
stock shall be kept by the Company or by one or more transfer agents
appointed by the Board.
<PAGE>
SECTION 3. CLOSING OF BOOKS; RECORD DATE. The Board may close
the transfer books against transfers of shares during the whole or any
part of a period of sixty days preceding the date of any meeting of the
shareholders or any dividend or distribution payment date or any date for
the allotment of rights; or, in lieu of closing the transfer books, may
fix a date not earlier than the date on which it is fixed and not more
than sixty days preceding the date of any meeting of shareholders, any
dividend or distribution payment date or any date for the allotment of
rights, as a record date for the determination of the shareholders
entitled to notice of or to vote at such meeting, or to receive such
dividend, distribution or rights, as the case may be, and only
shareholders of record on such date shall be entitled to notice of or to
vote at such meeting or to receive such dividend, distribution or rights.
SECTION 4. LOST OR DESTROYED CERTIFICATES. The Board of
Directors may direct a new certificate or certificates to be issued in
place of any certificate or certificates theretofore issued by the Company
alleged to have been lost or destroyed, upon the making of an affidavit of
that fact by the person claiming the certificate to be lost or destroyed.
When authorizing such issue of a new certificate or certificates, the
Board of Directors may, in its discretion and as a condition precedent to
the issuance thereof, require the owner of the lost or destroyed
certificate or certificates, or his legal representative, to advertise the
same in such manner as it shall required, and/or give the Company a bond,
in such sum as it may direct, to indemnify the Company against any claim
that may be made against it with respect to the Certificate alleged to
have been lost or destroyed.
SECTION 5. DIVIDENDS. The Board may from time to time declare
and pay dividends from the surplus of the Company whenever they shall deem
it expedient, in the exercise of their discretion, and in conformity with
the provisions of the Charter.
ARTICLE V
FISCAL YEAR AND SEAL
SECTION 1. FISCAL YEAR. The fiscal year of the Company shall
begin on the first day of January and shall end on the thirty-first day of
December in each year.
SECTION 2. CORPORATE SEAL. The corporate seal shall have
inscribed thereon "MONONGAHELA POWER COMPANY INCORPORATED 1924 OHIO".
ARTICLE VI
INDEMNIFICATION OF DIRECTORS AND OFFICERS
SECTION 6.1. The Corporation shall indemnify any person who was or
is a party or is threatened with being made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, including all appeals (other than an
action, suit or proceeding by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer or employee of
the Corporation, or is or was serving at the request of the Corporation as
a director, officer or employee of another corporation, partnership, joint
<PAGE>
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, decrees, fines, penalties and amounts paid in settlement
actually and reasonably incurred by him in connection with such action,
suit or proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation,
and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not of itself create a
presumption that the person did not act in good faith or in a manner which
he reasonably believed to be in or not opposed to the best interests of
the Corporation or, with respect to any criminal action, suit or
proceeding, that he had reasonable cause to believe that his conduct was
unlawful.
SECTION 6.2. The Corporation shall indemnify any person who was or
is a party or is threatened with being made a party to any threatened,
pending or completed action, suit or proceeding, including all appeals, by
or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer or employee of
the Corporation, or is or was serving at the request of the Corporation as
a director, officer or employee of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action, suit or proceeding. The Corporation
shall also indemnify any such person against amounts paid in settlement of
such action, suit or proceeding up to the amount that would reasonably
have been expended in his defense (determined in the manner provided for
in SECTION 6.4) if such action, suit or proceeding had been prosecuted to
a conclusion. However, indemnification under this Section shall be made
only if the person to be indemnified acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of
the Corporation; and no such indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have been finally
adjudged to be liable for negligence or misconduct in the performance of
his duty to the Corporation unless, and only to the extent that, the court
or body in or before which such action, suit or proceeding was finally
determined, or any court of competent jurisdiction, shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnify for such expenses or other amounts paid as such
court or body shall deem proper.
SECTION 6.3. Without limiting the right of any director, officer or
employee of the Corporation to indemnification under any other Section
hereof, if such person has been substantially and finally successful on
the merits or otherwise in defense of any action, suit or proceeding
referred to in SECTIONS 6.1 and 6.2 or in defense of any claim, issue, or
matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
SECTION 6.4. Any indemnification under SECTIONS 6.1 and 6.2 (unless
ordered by a court) shall be made by the Corporation only as authorized in
the specific case upon a determination that indemnification of the
director, officer or employee is proper in the circumstances because he
has met the applicable standard of conduct set forth in SECTIONS 6.1 and
6.2. Such determination shall be made (1) by the Board of Directors by a
majority vote of a quorum consisting of directors who are or were not
parties to or threatened with such action, suit or proceeding, or (2) if
such a quorum is not obtainable, or even if obtainable, if a majority of
a quorum of disinterested directors so directs, by independent legal
<PAGE>
counsel (compensated by the Corporation) in a written opinion, or (3) if
there be no disinterested directors, or if a majority of the disinterested
directors, whether or not a quorum, so directs, by the holders of a
majority of the shares entitled to vote in the election of directors
without reference to default or contingency which would permit the holders
of one or more classes of shares to vote for the election of one or more
directors.
SECTION 6.5. Expenses of each person indemnified hereunder incurred
in defending a civil, criminal, administrative or investigative action,
suit, or proceeding (including all appeals) or threat thereof, may be paid
by the Corporation in advance of the final disposition of such action,
suit or proceeding as authorized by the Board of Directors, whether a
disinterested quorum exists or not, upon receipt of an undertaking by or
on behalf of the director, officer or employee to repay such expenses
unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation.
SECTION 6.6. The indemnification provided by this Article shall not
be deemed exclusive of or in any way to limit any other rights to which
any person indemnified may be or may become entitled as a matter of law,
by the articles, regulations, agreements, insurance, vote of shareholders
or otherwise, with respect to action in his official capacity and with
respect to action in another capacity while holding such office and shall
continue as to a person who has ceased to be a director, officer, or
employee and shall inure to the benefit of the heirs, executors,
administrators and other legal representatives of such person.
SECTION 6.7. SECTIONS 6.1 through 6.6 of this Article shall also
apply to such other agents of the Corporation as are designated for such
purpose at any time by the Board of Directors.
SECTION 6.8. If any part of this Article shall be found, in any
action, suit or proceeding, to be invalid or ineffective, the validity and
the effect of the remaining parts shall not be affected.
SECTION 6.9. The provisions of this Article shall be applicable to
claims, actions, suits or proceedings made or commenced after the adoption
hereof, whether arising from acts or omissions to act occurring before or
after the adoption hereof.
ARTICLE VII
AMENDMENTS
The Code of Regulations of the Company or any provisions thereof, may
be adopted, repealed, amended, added to or changed at any regular or
special meeting of shareholders by the affirmative vote of the holders of
shares entitling them to exercise a majority of the voting power on such
proposal, or, without a meeting, by the written consent of the holders of
shares entitling them to exercise a majority of the voting power on such
proposal.
Septmeber 8, 1994
