<PAGE>
RULE NO. 424(b)(5)
REGISTRATION NO. 33-51301
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED DECEMBER 23, 1993
Part of the Allegheny Power System
(LOGO OF ALLEGHENEY POWER
SYSTEM, INC. APPEARS HERE)
500,000 SHARES
MONONGAHELA POWER COMPANY
$7.73 CUMULATIVE PREFERRED STOCK, SERIES L
(PAR VALUE $100 PER SHARE)
------------
Dividends on the $7.73 Cumulative Preferred Stock, Series L (the "Offered New
Preferred Stock") are cumulative from the date of original issuance and are
payable quarterly on the first day of February, May, August and November in
each year, commencing August 1, 1994, at the annual rate of $7.73 per share
when and as declared by the Board of Directors in its sole discretion out of
funds legally available for such payment.
The Offered New Preferred Stock is not redeemable prior to August 1, 2004. On
and after such date, the Offered New Preferred Stock is redeemable at the
option of the Company at any time or from time to time at par value plus
accrued dividends to the date of redemption. See "Description of Offered New
Preferred Stock."
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO THE
OFFERING PRICE (1) DISCOUNT (2) COMPANY (1) (3)
------------------ ------------ ---------------
<S> <C> <C> <C>
Per Share....................... $100.00 $.73 $99.27
Total........................... $50,000,000 $365,000 $49,635,000
</TABLE>
- --------
(1) Plus accrued dividends, if any, from the date of original issuance.
(2) The Company has agreed to indemnify Goldman, Sachs & Co. against certain
civil liabilities, including certain liabilities under the Securities Act
of 1933, as amended.
(3) Before deducting estimated expenses of $104,828 payable by the Company.
------------
The shares of Offered New Preferred Stock are offered by Goldman, Sachs &
Co., as specified herein, subject to receipt and acceptance by them and subject
to their right to reject any order in whole or in part. It is expected that the
Offered New Preferred Stock will be ready for delivery in New York, New York on
or about May 11, 1994.
GOLDMAN, SACHS & CO.
------------
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS MAY 4, 1994.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
USE OF PROCEEDS
The net proceeds from the sale of the Offered New Preferred Stock will be
used to pay or prepay outstanding short-term debt. As of March 31, 1994, the
Company had outstanding $61,272,000 of short-term debt at an average interest
rate of 3.68% per annum and with maturities ranging from 1 to 28 days.
RECENT DEVELOPMENTS
The Company, The Potomac Edison Company and West Penn Power Company
(collectively, the "Operating Subsidiaries") previously reported that the
Environmental Protection Agency ("EPA") had identified them and approximately
875 others as potentially responsible parties ("PRPs") under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), with respect to the Jack's Creek/Sitkin Smelting Superfund Site
("Site"). Allegheny Power Service Corporation ("APSC"), a wholly-owned
subsidiary of Allegheny Power System, Inc., has also been identified as a PRP
with respect to the Site. The EPA alleges that the Operating Subsidiaries and
APSC sent materials, including wire and other reclaimable items, to the Site in
the mid-1970's. According to the EPA, treatment of these materials caused
contamination of the soil at the Site. Under CERCLA, PRPs may be held liable
for potential EPA response and remediation action at the Site. To date, the EPA
has spent approximately $5,000,000 on studies and response action at the Site.
A Remedial Investigation/Feasibility Study ("RI/FS") was prepared for the Site
by the EPA. Although the remedial alternatives contained in the RI/FS range as
high as $113,000,000, the EPA has not yet selected which remedial alternative
it will use. The Operating Subsidiaries and APSC believe they have defenses to
allegations of liability and intend to vigorously defend this matter. At this
time it is not possible to determine what costs, if any, they may incur.
SELECTED FINANCIAL INFORMATION
The following summary income statement information as to the year ended
December 31, 1993 should be read in conjunction with the audited Financial
Statements contained in the Annual Report for the Company on Form 10-K for the
year ended December 31, 1993. The unaudited summary income statement
information for the twelve months ended March 31, 1994 reflects all adjustments
(which consist only of normal recurring adjustments) which in the Company's
opinion are necessary for a fair presentation of that period.
<TABLE>
<CAPTION>
12 MONTHS ENDED YEAR ENDED
MARCH 31, 1994 DECEMBER 31, 1993
--------------- -----------------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Income Statement Data:
Total Operating Revenues................... $664,212 $641,844
Operating Income........................... 86,309 86,303
Income Before Interest Charges............. 96,381 96,598
Interest Charges........................... 35,354 34,900
Net Income................................. 61,027 61,698
Ratio of Earnings to Fixed Charges and
Preferred
Stock Dividends............................. 2.95 2.96
</TABLE>
S-2
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company at December
31, 1993 and March 31, 1994, and as adjusted to give effect to the sale of the
Offered New Preferred Stock.
<TABLE>
<CAPTION>
MARCH 31, 1994 DECEMBER 31, 1993
---------------------- ----------------------
AMOUNT AS ADJUSTED AMOUNT AS ADJUSTED
---------- ----------- ---------- -----------
(THOUSANDS OF DOLLARS) (THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C>
Common Stock, Other Paid-in
Capital
and Retained Earnings........... $486,006 $486,006 $ 483,030 $ 483,030
Preferred Stock (not subject to
mandatory redemption)........... 64,000 114,000 64,000 114,000
Long-Term Debt................... 461,170 461,170 460,129 460,129
---------- ---------- ---------- ----------
Total Capitalization........... $1,011,176 $1,061,176 $1,007,159 $1,057,159
========== ========== ========== ==========
</TABLE>
CONSTRUCTION AND FINANCING
Construction expenditures by the Company in 1993 amounted to $141 million and
for 1994 and 1995 are expected to aggregate $103 million and $83 million,
respectively. In 1993, these expenditures included $61 million for compliance
with the Clean Air Act Amendments of 1990 ("CAAA"). The 1994 and 1995 estimated
expenditures include $39 million and $10 million, respectively, to cover the
costs of compliance with the CAAA. Allowance for funds used during construction
(shown below) has been reduced for carrying charges on CAAA expenditures that
will be collected through a currently approved surcharge.
<TABLE>
<CAPTION>
1993 1994 1995
------- ------- -------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Generation.............................................. $ 93.9 $ 53.4 $ 31.0
Transmission and Distribution........................... 45.0 47.0 48.2
Other................................................... 1.8 3.1 4.1
------- ------- ------
Total................................................. $140.7 $103.5 $83.3
======= ======= ======
Allowance For Funds Used During Construction Included $ 5.8 $ 4.1 $ 1.9
Above...................................................
</TABLE>
DESCRIPTION OF OFFERED NEW PREFERRED STOCK
The following description of the particular terms of the Offered New
Preferred Stock supplements, and to the extent inconsistent therewith replaces,
the description of the general terms and provisions of the Preferred Stock set
forth in the Prospectus under "Description of The New Preferred Stock," to
which description reference is hereby made. The statements herein concerning
the Offered New Preferred Stock are merely a summary and do not purport to be
complete. They are qualified in their entirety by reference to the provisions
of the Company's Charter, as amended.
DIVIDENDS
Holders of shares of the Offered New Preferred Stock are entitled to receive,
when and as declared by the Board of Directors of the Company, in its sole
discretion, out of funds legally available therefor, cumulative cash dividends
at the rate of $7.73 per share per annum, payable quarterly on the first day of
February, May, August, and November in each year, commencing August 1, 1994.
Dividends on the Offered New Preferred Stock will begin accruing on the date of
original issuance.
S-3
<PAGE>
OPTIONAL REDEMPTION
The Offered New Preferred Stock is not redeemable prior to August 1, 2004. On
and after such date, the Company may, at its option, at any time or from time
to time upon notice mailed not less than 30 days prior thereto, redeem all or
any part of the Offered New Preferred Stock at par value plus accrued dividends
to the date of redemption.
SINKING FUND PROVISIONS
There is no sinking fund for the Offered New Preferred Stock.
See "Description of The New Preferred Stock" in the Prospectus for additional
dividend, liquidation, voting provisions, and other rights and features of the
Offered New Preferred Stock.
UNDERWRITING
Subject to the terms and conditions set forth in the Purchase Agreement
relating to the Offered New Preferred Stock, the Company has agreed to sell to
Goldman, Sachs & Co. ("Goldman Sachs"), and Goldman Sachs have agreed to
purchase all of the Offered New Preferred Stock.
Under the terms and conditions of the Purchase Agreement, Goldman Sachs are
committed to take and pay for all of the Offered New Preferred Stock, if any is
taken.
The Company has been advised by Goldman Sachs that Goldman Sachs propose to
offer the Offered New Preferred Stock in part directly to the public at the
initial public offering price set forth on the cover page of this Prospectus
Supplement and in part to certain securities dealers at such price less a
concession not in excess of $.50 per share. Goldman Sachs may allow and such
dealers may reallow to certain brokers and dealers a concession not in excess
of $.25 per share. After the Offered New Preferred Stock is released for sale
to the public, the offering price and other selling terms may from time to time
be varied by Goldman Sachs.
There is presently no established trading market for the Offered New
Preferred Stock, and the Company does not intend to apply for listing of the
Offered New Preferred Stock on a national securities exchange. The Company has
been advised by Goldman Sachs that they intend to make a market in the Offered
New Preferred Stock but are not obligated to do so and may discontinue market-
making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Offered New Preferred Stock.
The Company has agreed to indemnify Goldman Sachs against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
S-4
<PAGE>
FIRST MORTGAGE BONDS
PREFERRED STOCK (PAR VALUE $100)
MONONGAHELA POWER COMPANY
---------------
Monongahela Power Company (the "Company") may offer and sell from time to
time in one or more series, or all at one time in one or more series, up to
$225,000,000 aggregate principal amount of its First Mortgage Bonds ("New
Bonds") and up to 850,000 shares of its Preferred Stock (par value $100) ("New
Preferred Stock" and together with the New Bonds, the "Securities") at prices
and on terms to be determined at the time of sale. This Prospectus will be
supplemented by one or more prospectus supplements ("Prospectus Supplement")
which will set forth, in the case of an offering of New Bonds, the aggregate
principal amount, maturity, interest rate (or method of calculating the
interest rate), any redemption provisions, offering price, proceeds to the
Company, and any other specific terms of the particular series of New Bonds
and, in the case of an offering of New Preferred Stock, the specific
designation, number of shares, rate and time of payment of dividends, or manner
of determining such rate and time, offering price, any redemption provisions,
proceeds to the Company, and any other specific terms of the particular series
of the New Preferred Stock. The sale of one series of New Bonds or of one
series of New Preferred Stock will not be contingent upon the sale of any other
series of New Bonds or New Preferred Stock, as the case may be.
---------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
---------
THE DATE OF THIS PROSPECTUS IS DECEMBER 23, 1993.
<PAGE>
AVAILABLE INFORMATION
MONONGAHELA POWER COMPANY (THE "COMPANY"), 1310 FAIRMONT AVENUE, P.O. BOX
1392, FAIRMONT, WEST VIRGINIA 26555-1392 (TEL. 304-366-3000), IS SUBJECT TO THE
INFORMATIONAL REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934 AND IN
ACCORDANCE THEREWITH FILES REPORTS AND OTHER INFORMATION WITH THE SECURITIES
AND EXCHANGE COMMISSION (THE "COMMISSION"). SUCH REPORTS AND OTHER INFORMATION
FILED BY THE COMPANY CAN BE INSPECTED AT THE PUBLIC REFERENCE FACILITIES OF THE
COMMISSION, ROOM 1024, JUDICIARY PLAZA, 450 FIFTH STREET, N.W., WASHINGTON,
D.C. 20549; SUITE 1400, NORTHWESTERN ATRIUM CENTER, 500 WEST MADISON STREET,
CHICAGO, ILLINOIS 60661; AND ROOM 1400, 7 WORLD TRADE CENTER, 13TH FLOOR, NEW
YORK, NEW YORK 10048. COPIES OF SUCH MATERIAL CAN BE OBTAINED FROM THE PUBLIC
REFERENCE SECTION OF THE COMMISSION AT PRESCRIBED RATES. REQUESTS SHOULD BE
DIRECTED TO THE COMMISSION'S PUBLIC REFERENCE SECTION, ROOM 1024, JUDICIARY
PLAZA, 450 FIFTH STREET, N.W., WASHINGTON, D.C. 20549. CERTAIN SECURITIES OF
THE COMPANY ARE LISTED ON THE AMERICAN STOCK EXCHANGE, AND REPORTS AND OTHER
INFORMATION CONCERNING THE COMPANY CAN BE INSPECTED AT THE OFFICES OF SUCH
EXCHANGE.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, are hereby
incorporated by reference in this Prospectus:
(i) The Annual Report of the Company on Form 10-K for the year ended
December 31, 1992, as amended by the Company's Report on Form 8 filed
on March 1, 1993 (the "Annual Report");
(ii) The Quarterly Reports of the Company on Form 10-Q for the quarters
ended March 31, 1993, June 30, 1993 and September 30, 1993; and
(iii) The Current Report of the Company on Form 8-K filed on April 29,
1993.
All documents filed by the Company pursuant to Section 13, 14 or 15(d) of the
Securities Exchange Act of 1934 after the date of this Prospectus and prior to
the termination of the offering of the Securities offered hereby shall be
deemed to be incorporated in this Prospectus by reference and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein or in
accompanying Prospectus Supplements modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as modified or
superseded, to constitute a part of this Prospectus.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO
WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL
REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO
ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED BY REFERENCE IN THIS PROSPECTUS,
OTHER THAN EXHIBITS TO SUCH DOCUMENTS. REQUESTS FOR SUCH COPIES SHOULD BE
DIRECTED TO: 1310 FAIRMONT AVENUE, P.O. BOX 1392, FAIRMONT, WEST VIRGINIA
26555-1392, ATTENTION: MR. CHARLES S. MULLETT, SECRETARY AND TREASURER (TEL.
304-366-3000).
2
<PAGE>
THE COMPANY
The Company, incorporated in Ohio in 1924, is an electric utility operating
in northern West Virginia and an adjacent portion of Ohio. It also owns
generating capacity in Pennsylvania. The Company is a wholly-owned subsidiary
of Allegheny Power System, Inc. and, together with The Potomac Edison Company
("Potomac Edison"), West Penn Power Company ("West Penn") and Allegheny
Generating Company ("AGC") (the "affiliates"), makes up the Allegheny Power
integrated electric utility system (the "System"). The Company owns 27% of the
common stock of AGC, and Potomac Edison and West Penn own the remainder of
AGC's common stock. AGC owns an undivided 40% interest (840 MW) in a pumped-
storage hydroelectric station in Bath County, Virginia, which is operated by an
unaffiliated company.
SELECTED INFORMATION
The following selected information is qualified in its entirety by the
detailed information appearing elsewhere in this Prospectus and by the
information and financial statements (including the notes thereto) appearing in
the documents incorporated in this Prospectus by reference.
<TABLE>
<CAPTION>
TWELVE MONTHS YEARS ENDED DECEMBER 31,
ENDED ---------------------------------------
SEPTEMBER 30, 1993 1992 1991 1990 1989 1988
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Generating capability at
end of period (KW in
Thousands):
Company-owned:
Coal-fired............ 2,098 2,098 2,098 2,098 2,075 2,075
Pumped-storage(a)..... 227 227 227 227 227 227
Nonutility contract(b). 159 79 29 27 27 27
Maximum hour peak demand
(KW in Thousands)...... 1,632 1,609 1,644 1,523 1,667 1,542
Sales (KWh in Millions):
Retail customers....... 9,223 9,142 9,232 8,956 8,836 8,534
Nonaffiliated
utilities(c)......... 3,494 4,578 4,878 5,635 6,491 5,978
Other, including
affiliates(c)........ 1,459 824 585 591 942 1,173
Customers (at end of
period)............... 339,023 336,777 333,228 330,213 327,473 325,291
</TABLE>
- ------
(a) Capacity entitlement through percentage ownership of AGC.
(b) Nonutility generating capacity available through contractual arrangements
pursuant to the Public Utility Regulatory Policies Act of 1978.
(c) Amounts for periods prior to 1991 have been reclassified for comparative
purposes to reflect a change in a Federal Energy Regulatory Commission
classification.
CAPITALIZATION
<TABLE>
<CAPTION>
SEPTEMBER 30, 1993
------------------------
AMOUNT PERCENT
------ -------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Common Stock, Other Paid-in Capital, and Retained
Earnings............................................ $ 480,722 48.0%
Preferred Stock (Not Subject to Mandatory Redemption). 64,000 6.4
Long-Term Debt........................................ 455,872 45.6
------------- --------
Total Capitalization.............................. $1,000,594 100.0%
============= ========
</TABLE>
3
<PAGE>
INCOME STATEMENT SUMMARY
The following summary income information as to the years ended December 31,
1988 through 1992 should be read in conjunction with the audited Financial
Statements contained in the Annual Report. The unaudited income information for
the twelve months ended September 30, 1993 reflects all adjustments (which
consist only of normal recurring adjustments) which in the Company's opinion
are necessary for a fair presentation of that period.
<TABLE>
<CAPTION>
TWELVE MONTHS YEARS ENDED DECEMBER 31,
ENDED --------------------------------------------
SEPTEMBER 30, 1993 1992 1991 1990 1989 1988
------------------ ---- ---- ---- ---- ----
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Total Operating
Revenues*............ $640,496 $631,963 $625,126 $630,328 $628,899 $598,748
Operating Income....... 87,448 82,061 77,669 77,149 74,369 78,682
Income Before Interest
Charges.............. 98,302 92,456 86,242 87,205 87,011 90,600
Interest Charges....... 34,833 34,112 32,153 32,256 31,566 31,637
Net Income............. 63,469 58,344 54,089 54,949 55,445 58,963
Ratio of Earnings to
Fixed Charges.......... 3.53 3.36 3.49 3.50 3.23 3.57
Ratio of Earnings to
Fixed Charges and
Preferred Stock
Dividend Requirements.. 3.00 2.81 2.85 2.86 2.70 2.94
</TABLE>
- ------
* Amounts for periods prior to 1991 have been reclassified for comparative
purposes to reflect a change in a Federal Energy Regulatory Commission
classification.
USE OF PROCEEDS
The net proceeds from the sale of the Securities will be added to the
Company's general funds and, together with other funds available to the
Company, will be used to pay or prepay, to the extent desirable, debt, to
redeem outstanding bonds and preferred stock, and for other corporate purposes,
including the financing of the Company's construction program.
CONSTRUCTION AND FINANCING
Construction expenditures by the Company in 1992 amounted to $126 million and
for 1993 and 1994 are expected to aggregate $146 million and $89 million,
respectively. In 1992, these expenditures included $51 million for
environmental protection, of which $45 million was for compliance with the
Clean Air Act Amendments of 1990 ("CAAA"). The 1993 and 1994 estimated
expenditures include $74 million and $33 million, respectively, for
environmental protection, of which $69 million and $28 million, respectively,
are to cover costs of compliance with the CAAA. Allowance for funds used during
construction (shown below) has been reduced for carrying charges on CAAA
expenditures which will be collected through a currently approved surcharge.
<TABLE>
<CAPTION>
1992 1993 1994
---- ---- ----
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Generation............................................ $ 77.1 $100.7 $49.8
Transmission and Distribution......................... 47.2 42.3 36.6
Other................................................. 2.1 3.2 2.8
------- ------- ------
Total............................................. $126.4 $146.2 $89.2
======= ======= ======
Allowance for Funds used During Construction
included above....................................... $3.9 $8.1 $7.4
</TABLE>
4
<PAGE>
In connection with its construction program, the Company must make estimates
of the availability and cost of capital as well as the future demands of its
customers that are necessarily subject to regional, national, and international
developments, changing business conditions, and other factors. The construction
of facilities and their cost are affected by laws and regulations, lead times
in manufacturing, availability of labor, materials and supplies, inflation,
interest rates, and licensing, rate, environmental, and other proceedings
before regulatory authorities. As a result, the Company's future plans, as well
as its projected ownership of future generating stations, are subject to
continuing review and substantial change.
The Company has financed its construction program through internally
generated funds, first mortgage bond and preferred stock issues, pollution
control and solid waste disposal bonds, instalment loans, long-term lease
arrangements, equity investments by its parent, and, where necessary, interim
short-term debt. The future ability of the Company to finance its construction
program by these means depends on many factors, including rate levels
sufficient to provide internally generated funds and adequate revenues to
produce a satisfactory return on the common equity portion of the Company's
capital structure and to support the issuance of senior securities.
DESCRIPTION OF THE NEW BONDS
GENERAL
The New Bonds are to be issued under an Indenture, dated as of August 1,
1945, between the Company and Citibank, N.A., as Trustee, as supplemented and
as to be supplemented as is necessary to create any series of New Bonds
(collectively, the "Indenture"). The Trustee is a depositary of funds of and a
lender to the Company and its affiliates.
The statements under this caption relating to the New Bonds and the Indenture
are summaries and do not purport to be complete. They make use of terms defined
in the Indenture and are qualified in their entirety by express reference to
the Indenture, the form of which is filed as an exhibit to the Registration
Statement.
Reference is made to the Prospectus Supplement relating to the particular New
Bonds offered thereby (the "Offered New Bonds") for the terms of the Offered
New Bonds, including dates of maturity, the rates of interest, and the prices
at which, the periods within which, and the terms and conditions upon which the
Offered New Bonds may, pursuant to any optional or mandatory redemption
provisions, be redeemed by the Company.
Unless otherwise indicated in the Prospectus Supplement relating thereto, the
Offered New Bonds are to be issued as registered securities without coupons in
denominations of $1,000 or any integral multiple of $1,000. They will be
transferable and exchangeable without charge except for governmental charges,
if any.
The Indenture does not contain any covenants or other provisions that are
specifically intended to afford holders of the New Bonds special protection in
the event of a highly leveraged transaction.
RENEWAL AND REPLACEMENT FUND
So long as any series of Bonds issued under the Indenture before September 2,
1992 ("Prior Bonds") are outstanding, the Company will, on or before April 30
in each year, pay to the Trustee in cash or Bonds an amount equal to 2 1/4% of
the average amount of Depreciable Property of the Company during the preceding
year less certain property additions and Bonds retired or to be retired. Cash
deposited may be used to acquire Prior Bonds or be withdrawn against Prior
Bonds or gross property additions. Excess credits may be used in any subsequent
year. The Company has reserved the right to change the 2 1/4% with the approval
of the Commission.
5
<PAGE>
SECURITY
The New Bonds will be equally and ratably secured, together with all other
Bonds now or hereafter issued, by a direct first lien on all the fixed
properties and franchises now or hereafter owned by the Company. The lien is
subject to statutory liens and equitable priorities for taxes and other
permitted liens and encumbrances and, as to certain after-acquired property, to
preexisting liens and encumbrances, and to rights of others which may attach
prior to recordation of a supplemental indenture specifically mortgaging the
property. There are excepted from the lien all bills, notes, accounts
receivable, cash, agreements, unpledged securities, materials and supplies and
certain other assets.
ISSUANCE OF ADDITIONAL BONDS
Additional Bonds of any series may be issued in an amount equal to (1) 60% of
the net bondable value (such value estimated to be in excess of $577 million as
of September 30, 1993) of property additions not subject to an unfunded prior
lien, (2) certain Bonds retired or to be retired and (3) cash deposited with
the Trustee; but (except as to additional Bonds which are issued to refund
Bonds within two years of their maturity) only if net earnings of the Company
available for interest (in 12 out of the 15 preceding months), after a
provision for depreciation (at the higher of (i) 2 1/4% of Depreciable Property
or (ii) book depreciation) but before income taxes, are at least twice the
annual interest charges on all Bonds and prior lien bonds then outstanding or
applied for. Cash deposited for an issue of Bonds may be withdrawn in an amount
equal to either 60% of net bondable value of property additions not subject to
a prior lien or the aggregate principal amount of certain Bonds retired or to
be retired and such property additions or Bonds may not thereafter be used as a
basis to issue additional Bonds.
Additional prior lien bonds (indebtedness secured by a prior lien on any of
the mortgaged property) may be issued with the same limits as those applicable
to the issuance of the additional Bonds, on the basis of property subject to
such prior lien, the retirement of prior lien bonds or the deposit of cash.
The Company expects that the New Bonds will be issued on the basis of
property additions, cash or Bonds retired or to be retired.
MODIFICATION
With the consent of the Company and the holders of 75% in amount of the Bonds
outstanding and (if less than all series are affected) 75% in amount of each
affected series, the Indenture and the rights of the Bondholders may be changed
in any way except to affect the terms of payment of principal or interest or to
reduce said percentage.
DEFAULTS
Failure to pay principal, or, for specified periods, to pay interest or meet
other Indenture requirements constitutes an event of default. A majority of the
Bondholders may direct the time, method and place of exercising any power
conferred upon the Trustee, but the Trustee, subject during default to the
required standard of care, is first entitled to security or indemnity
satisfactory to it. Periodic evidence as to general compliance with the
Indenture is not required to be furnished unless prescribed by the Commission
under the Trust Indenture Act of 1939, but certificates as to compliance with
certain provisions are required to be furnished annually and in connection with
action to be taken by the Trustee at the Company's request.
DESCRIPTION OF THE NEW PREFERRED STOCK
The authorized preferred stock of the Company consists of 1,500,000 shares of
cumulative preferred stock, par value $100 (the "Preferred Stock"), of which
640,000 shares were issued and outstanding as of September 30, 1993 as shares
of various series heretofore established. The statements herein concerning the
6
<PAGE>
New Preferred Stock are brief summaries of the relative rights and preferences
of the Preferred Stock. They make use of terms defined in the Company's
charter, as amended, do not purport to be complete, and are qualified in their
entirety by reference to such charter, which has been filed as an exhibit to
the Registration Statement of which this Prospectus is a part.
As set forth below, particular series of the New Preferred Stock may differ
with respect to designation, liquidation preference per share, sinking fund
provisions, if any, amount and method of determining the rate of dividends and
redemption terms, among other things.
Reference is made to the Prospectus Supplement relating to the particular
series of New Preferred Stock offered thereby (the "Offered New Preferred
Stock") for the specific terms of the Offered New Preferred Stock, including
the dividend rate (or, if the rate is not fixed, the method of determining the
dividend rate), the liquidation preference per share, any provisions for
redemption (including by way of sinking fund) and other terms of the Offered
New Preferred Stock.
GENERAL
The Company's charter provides that the Company's Preferred Stock may be
divided into and issued in series. The New Preferred Stock will constitute one
or more new series of the Company's Preferred Stock. All shares of Preferred
Stock are of equal rank. The charter provides that all of the shares of
Preferred Stock shall be identical in all respects, except as to the
designation thereof and except that each series may vary, as fixed and
determined by the Board of Directors of the Company at the time of its creation
and expressed in a resolution, as to (a) the annual dividend rate and the date
from which dividends in such series shall be cumulative, (b) the price at
which, and the terms and conditions on which, such shares may be redeemed, (c)
the amounts payable upon shares in the event of voluntary or involuntary
liquidation, (d) the terms and conditions, if any, on which shares may be
converted and (e) any other powers, preferences and rights and qualifications,
limitations or restrictions of shares of such series.
DIVIDENDS
The holders of each series of the New Preferred Stock shall be entitled to
receive, in preference to any class of stock ranking junior to the Preferred
Stock, as and when declared by the Board of Directors of the Company out of
funds legally available therefor, cumulative cash dividends at the rate for
such series determined in accordance with the charter at the time of creation
of such series. The New Preferred Stock will rank on parity, as to dividends,
with all series of Preferred Stock. No dividend shall be paid upon, or declared
or set apart for, any share of Preferred Stock for any quarterly dividend
period unless at the same time a like proportionate dividend for the same
quarterly dividend period, ratably in proportion to the respective annual
dividend rates fixed therefor, shall be paid upon, or declared and set apart
for, all shares of Preferred Stock of all series then issued and outstanding
and entitled to receive such dividend.
If any dividends are in arrears on the Preferred Stock, the Company may not
acquire (for a sinking fund or otherwise) any shares thereof (except by
redemption of all) without prior approval of the Commission under the Public
Utility Holding Company Act of 1935.
The Company's charter provides that so long as any shares of Preferred Stock
are outstanding, the Company shall not declare any dividends or make any
distributions in respect of outstanding shares of any stock of the Company
ranking junior to the Preferred Stock as to dividends or assets (the "junior
stock"), other than dividends in shares of junior stock, or purchase or
otherwise acquire for value any outstanding shares of junior stock (each such
dividend, distribution, purchase or acquisition being called a "dividend") in
contravention of the following:
(a) If and so long as the junior stock equity, as defined, at the end of
the calendar month immediately preceding the date on which a dividend on
the junior stock is declared is, or as a result of the dividend would
become, less than 20% of total consolidated capitalization, as defined, the
Company
7
<PAGE>
shall not declare such dividends in an amount which, together with all
other dividends on the junior stock paid within the year ending with and
including the date on which such dividend is payable, exceeds 50% of the
consolidated net income of the Company and its subsidiaries available for
dividends on the junior stock for the 12 full calendar months immediately
preceding the calendar month in which such dividends are declared, except
in an amount not exceeding the aggregate of dividends which under the
restriction set forth above could have been, and have not been, declared;
and
(b) If and so long as the junior stock equity, as defined, at the end of
the calendar month immediately preceding the date on which a dividend on
the junior stock is declared is, or as a result of the dividend would
become, less than 25% but not less than 20% of total consolidated
capitalization, as defined, the Company shall not declare dividends on the
junior stock in an amount which, together with all other dividends on the
junior stock paid within the year ending with and including the date on
which such dividend is payable, exceeds 75% of the consolidated net income
of the Company and its subsidiaries available for dividends on the junior
stock for 12 full calendar months immediately preceding the calendar month
in which such dividends are declared, except in an amount not exceeding the
aggregate of dividends on junior stock which under the restriction above
under (a) and in this paragraph could have been, and have not been,
declared.
LIQUIDATION RIGHTS
In the event of any voluntary or involuntary dissolution, liquidation or
winding up of the Company, each series of Preferred Stock, pari passu with each
other, shall have preference over any class of stock ranking junior to the
Preferred Stock until an amount equal to the amount per share determined in
accordance with the charter provisions, plus accrued dividends, shall have been
paid. Neither the consolidation or merger of the Company nor the sale or
transfer of all or part of its assets shall be deemed a liquidation,
dissolution or winding up of the affairs of the Company.
VOTING RIGHTS
The Preferred Stock has no voting rights except as indicated below or as
required by law.
If dividends on any of the Preferred Stock are in default in an amount
equivalent to four or more full quarterly dividends, and until all such
dividends in arrears have been paid, the Preferred Stock, voting as a class,
shall be entitled to elect a majority of the Board of Directors. In such case,
each share is entitled to one vote for each director to be elected by the
Preferred Stock, which votes may be cast cumulatively.
A consent of two-thirds of the holders of outstanding shares of the Preferred
Stock, voting as a class, is required to:
(1) change the charter to adversely affect the powers, preferences or rights
of the Preferred Stock (the vote being by the series adversely affected, voting
as a class, if less than all series are adversely affected), but a change in
the authorized amount of the Preferred Stock or the creation, or change in the
amount, of any new class of stock ranking on a parity as to dividends or assets
(hereinafter referred to as "equal rank") or any class of stock ranking junior
to the Preferred Stock or any security convertible into such stock or into
Preferred Stock shall not be deemed to be adverse; or
(2) authorize or create, or increase the authorized amount of, or issue more
than 12 months after such authorization or creation, any prior ranking stock.
A consent of holders of a majority of the outstanding shares of the Preferred
Stock, voting as a class, is required to:
(1) issue or assume any securities representing unsecured debt (except to
refund unsecured debt or retire all outstanding shares of Preferred Stock) if
all unsecured debt to be outstanding would exceed 20%, or all such debt with
maturities of less than 10 years to be outstanding would exceed 10%, of secured
indebtedness, capital and surplus;
8
<PAGE>
(2) issue any additional or reacquired shares of Preferred Stock or stock of
equal rank (except to refinance an equal par amount of Preferred Stock or stock
of equal or prior rank) unless annual interest charges on indebtedness of the
Company and its subsidiaries to be outstanding after the issuance and annual
dividend requirements of all Preferred Stock and stock of equal or prior rank
to be outstanding after the issuance are covered 1 1/2 times by consolidated
gross income (after all taxes) for 12 consecutive calendar months within the 15
preceding calendar months and unless aggregate capital applicable to junior
stock equity, as defined, is not less than the aggregate amount payable on
involuntary liquidation on all Preferred Stock and stock of equal or prior rank
to be outstanding; or
(3) dispose of substantially all of the Company's assets or merge or
consolidate except (i) with the approval of the Commission under the Public
Utility Holding Company Act of 1935, or (ii) with or to a subsidiary of the
Company, if the Preferred Stock is not adversely affected thereby and if other
conditions are met.
OTHER RIGHTS
There are no preemptive, subscription or conversion rights for the New
Preferred Stock.
TRANSFER AGENT AND REGISTRAR
The transfer agent and the registrar for the Preferred Stock is Chemical
Bank, New York, N.Y.
PLAN OF DISTRIBUTION
The Company will sell the Securities from time to time through underwriters
or dealers in either negotiated or competitively bid transactions. Any
Securities acquired by any underwriters will be acquired by such underwriters
for their own account and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The underwriter or
underwriters with respect to a particular underwritten offering of New Bonds or
New Preferred Stock will be named in the Prospectus Supplement relating to such
offering and, if an underwriting syndicate is used, the managing underwriter or
underwriters will be set forth on the cover page of such Prospectus Supplement.
The applicable Prospectus Supplement will also set forth the purchase price of
the New Bonds or New Preferred Stock offered and the proceeds to the Company
from such sale, any underwriting discounts and other items constituting
underwriters' compensation, any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers and other specific terms
of the particular Securities.
Unless otherwise set forth in the Prospectus Supplement, the obligations of
the underwriters to purchase any Securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all of
the particular Securities offered thereby if any are purchased. Underwriters
and dealers may be entitled, under agreements to be entered into with the
Company, to indemnification against certain civil liabilities, including
liabilities under the Securities Act of 1933.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report have been so incorporated in reliance on the
reports of Price Waterhouse, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
VALIDITY OF THE SECURITIES
The validity of the Securities offered hereby will be passed upon for the
Company by Sullivan & Cromwell, New York, New York. Certain legal matters in
connection with the Securities will be passed upon for the Underwriters by
Cahill Gordon & Reindel, a partnership including a professional corporation,
New York, New York. On matters of local law, those firms will rely on Robert R.
Winter, Esq., Vice President, Legal Services of the Company.
9
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESEN-
TATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PRO-
SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PRO-
SPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY
ANY SECURITIES OTHER THAN THE SECURITIES OFFERED BY THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE THEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF MONONGAHELA POWER COMPANY SINCE THE DATE OF THIS PRO-
SPECTUS SUPPLEMENT OR THE PROSPECTUS, OR THAT THE INFORMATION HEREIN OR THEREIN
IS CORRECT AS OF ANY TIME SINCE SUCH DATE.
-----------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
Use of Proceeds..............................................................S-2
Recent Developments..........................................................S-2
Selected Financial Information...............................................S-2
Capitalization...............................................................S-3
Construction and Financing...................................................S-3
Description of Offered New Preferred Stock...................................S-3
Underwriting ................................................................S-4
PROSPECTUS
Available Information......................................................... 2
Incorporation of Certain Documents by Reference............................... 2
The Company................................................................... 3
Selected Information.......................................................... 3
Capitalization................................................................ 3
Income Statement Summary...................................................... 4
Use of Proceeds............................................................... 4
Construction and Financing.................................................... 4
Description of The New Bonds.................................................. 5
Description of The New Preferred Stock........................................ 6
Plan of Distribution.......................................................... 9
Experts....................................................................... 9
Validity of the Securities.................................................... 9
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
500,000 SHARES
MONONGAHELA POWER COMPANY
$7.73 CUMULATIVE PREFERRED STOCK, SERIES L
(PAR VALUE $100 PER SHARE)
-----------
PROSPECTUS SUPPLEMENT
-----------
GOLDMAN, SACHS & CO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
