File No. 70-6179
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 7
TO
APPLICATION OR DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Monongahela Power Company
1310 Fairmont Avenue
Fairmont, WV 26554
The Potomac Edison Company
10435 Downsville Pike
Hagerstown, MD 21740-1766
West Penn Power Company
800 Cabin Hill Drive
Greensburg, PA 15601
(Name of company or companies filing this statement and addresses
of principal executive offices)
Allegheny Power System, Inc.
(Name of top registered holding company parent of each applicant
or declarant)
Nancy H. Gormley, Esq.
Allegheny Power System, Inc.
12 East 49th Street
New York, NY 10017
(Name and address of agent for service)
<PAGE>
Applicants hereby amend Item 6. Exhibits and Financial Statements,
to their Application or Declaration on Form U-1 by adding the following:
(a) Exhibits
D-1(a) Potomac Edison's
Application to the
Maryland Public Service
Commission.
D-2(a) Monongahela's
Application to the Ohio
Public Utility
Commission.
D-3(a) West Penn's Application
to the Pennsylvania
Public Utility
Commission.
D-4(a) Potomac Edison's
Application to the
Virginia State
Corporation Commission.
D-6(a) Order of the Maryland
Public Service
Commission.
D-7(a) Order of the Ohio Public
Utility Commission.
D-8(a) Order of the
Pennsylvania Public
Utility Commission.
D-9(a) Order of the Virginia
State Corporation
Commission.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned companies have duly caused
this statement to be signed on their behalf by the undersigned
thereunto duly authorized.
MONONGAHELA POWER COMPANY
By NANCY H. GORMLEY
Nancy H. Gormley
Counsel
THE POTOMAC EDISON COMPANY
By NANCY H. GORMLEY
Nancy H. Gormley
Counsel
WEST PENN POWER COMPANY
By NANCY H. GORMLEY
Nancy H. Gormley
Counsel
Dated: April 4, 1994
Exhibit D-1(a)
In the Matter of the Application of BEFORE THE
The Potomac Edison Company for PUBLIC SERVICE COMMISSION
authority to issue additional OF MARYLAND
first mortgage bonds, pollution
control notes and preferred stock CASE NO. ________
PETITION
The petition of The Potomac Edison Company ("Potomac") respectfully
shows:
1. Potomac is a Maryland and Virginia corporation and a public
service company subject to the jurisdiction of the Commission
as fully appears in former proceedings before this Commission.
2. Potomac has authority for general corporate purposes: to
issue up to $90 million of bonds (Case No. 8498) and
anticipates issuing $75 million in 1994; to issue up to $52.4
million of solid waste disposal notes (Case No. 8490) and
$13.990 million were issued on May 26, 1993. Potomac
anticipates issuing additional solid waste disposal notes,
however the timing and amount will depend upon the West
Virginia cap for issuance of industrial or commercial
development bonds. Potomac issued $50 million of common stock
(Case No. 8548) on October 15, 1993.
3. After January 1, 1994 and prior to December 31, 1995 Potomac
also proposes, for refinancing purposes, to issue for cash to
the general public, an aggregate principal amount of not more
than $195 000 000 of first mortgage bonds (the "Bonds"). The
Bonds shall be issued in one or more new series, each such
series to have a single maturity of not more than thirty (30)
years. Potomac anticipates that the Bonds will be issued
through underwriters after competitive bidding. However, in
<PAGE>
order to deal with market conditions as they exist at the
time, Potomac requests the flexibility to issue the Bonds
through negotiation with underwriters or through private
placement with institutional investors if such procedures are
deemed more economic.
4. It is difficult to determine, under present bond market
conditions, whether it would be more advantageous to Potomac
to sell bonds having a 30-year or some shorter maturity.
Potomac desires to have available sufficient flexibility to
adjust its financing program to developments in the market for
long-term debt securities when and as they occur, in order to
obtain the best possible price or prices and interest rate or
rates for the Bonds.
5. It is proposed that Potomac decide on the number of series and
the maturity of the Bonds at a later time and notify
prospective purchasing underwriters as required by the
Securities and Exchange Commission ("SEC").
6. The Bonds are to be issued under the Indenture as of
October 1, 1944, between Potomac and Chemical Bank, as
Trustee, and Thomas J. Foley, as Individual Trustee, as
heretofore supplemented and amended, and under an indenture
supplemental thereto. The Bonds are to bear interest payable
semi-annually. Copies of the Indenture and the First through
Eighty-sixth Supplemental Indentures, inclusive, are filed in,
or in cases referred to in, the petition in Case No. 8530.
7. Potomac may elect to sell the Bonds through an alternative
competitive bidding procedure consistent with SEC Rule 50 as
described in SEC Release No. 35-22623 of September 2, 1982.
<PAGE>
The Bonds will be registered with the SEC pursuant to a Rule
415 "shelf registration." The price or prices to be paid to
Potomac and the interest rate or rates will be determined by
such competitive bidding. The interest rate or rates, the
price or prices to Potomac and the public offering price or
prices, if any, of the Bonds, and the prices at which the
Bonds may be redeemed, are to be determined, and the award of
the Bonds is to be made, in accordance with the bid which
offers the lowest cost of money to Potomac. In the event,
however, that market or other conditions make competitive
bidding impracticable or undesirable, Potomac proposes to
negotiate with underwriters for the purchase of the Bonds or
privately place the bonds with institutional investors. Under
such circumstances the interest rate or rates and the price or
prices to be paid Potomac will be determined by such
negotiations.
8. Potomac will use the net proceeds of the Bonds to be issued
for the refunding prior to their respective maturities of $80
million aggregate principal amount of its first mortgage
bonds, 9-5/8% Series issued 1990 due 2020 and $50 million
aggregate principal amount of its first mortgage bonds, 8-7/8%
Series issued 1991 due 2021 through a non-coercive tender
offer, if economically justified, and to refund prior to
maturity after June 1, 1994 $65 million aggregate principal
amount of its first mortgage bonds, 9-1/4% Series issued 1989
due 2019.
9. Potomac also proposes to enter into a transaction involving
the refinancing of an issue of tax-exempt revenue bonds (the
<PAGE>
"Series B Bonds") issued by the Pleasants County Commission of
West Virginia (the "County Commission"), the proceeds of which
were used to finance the cost of installation of certain air
pollution control equipment improvement at the Pleasants
Generating Station. The pollution control equipment was
installed in order to meet West Virginia and federal air
quality standards as to particulate emissions. This
Commission by its Order dated July 14, 1978 in Case No. 7245
previously authorized Potomac's issuance of up to $21 million
of pollution control notes concerning the above referenced
Series B Bonds.
The Series B Bonds were issued in August, 1978 by
Pleasants County ($21 000 000), bear interest at the rate of
7.30% per annum, mature on August 1, 2008, and after August 1,
1993 are subject to optional redemption at 100-1/2% of the
principal amount plus accrued interest. The optional
redemption price changes to 100% on August 1, 1994 and
thereafter. It is expected that Pleasants County will issue
a new series of bonds (the "Series C Bonds") for the purpose
of providing a portion of the funds required to redeem the
County's Series B Bonds. Pleasants County's new Series C
Bonds will be in an aggregate principal amount equal to the
aggregate principal amount of the County's Series B Bonds
outstanding at the time of the refinancing, which is the
maximum amount permitted by the Internal Revenue Code for a
refinancing of this type. The new Series C Bonds will be sold
at such times, in such principal amount, at such interest
rates, and for such prices as shall be approved by Potomac.
<PAGE>
The timing of any such refinancing will depend on a
determination by Potomac of market conditions which are
expected to prevail through the maturity of the Series B
Bonds.
Potomac will deliver concurrently with the issuance of
the Series C Bonds, its non-negotiable Pollution Control Note
corresponding to such series of Bonds in respect of principal
amount, interest rates and redemption provisions and having
installments of principal corresponding to any mandatory
sinking fund payments and stated maturities. Payments on such
Note will be made to the Trustee and applied by the Trustee to
pay the maturing principal and redemption price of and
interest and other costs on the Series C Bonds as the same
become due.
10. Title to the pollution control equipment will remain with
Potomac subject to the second lien granted by Potomac on the
equipment to the County Commission in accordance with the
terms of the Pollution Control Financing Agreement, the Trust
Indenture and the Security Agreement reviewed and approved by
the Commission in Case No. 7245.
11. It is expected that the County Commission will engage Goldman,
Sachs & Co., and any co-managers that may be desirable, for
the purpose of providing financial advice and underwriting the
sale of the Bonds. Potomac has been informed that the County
Commission has the legal authority to issue tax-exempt revenue
bonds in accordance with the documents and Potomac understands
that a legal opinion to that effect will be delivered to
appropriate parties at, or prior to, the closing. The new
<PAGE>
Series C Bonds, which will be in registered form, will bear
interest semi-annually at a rate to be determined and will be
issued pursuant to the Trust Indenture. The Trust Indenture
provides for a mandatory redemption of the Bonds under certain
circumstances. In addition, the new Series C Bonds will be
subject to redemption at the option of the County Commission,
exercised at the direction of Potomac, in accordance with the
provisions contained in the form of Bond.
12. The proceeds from the sale of the Series B Bonds by the County
Commission were applied to purchase and complete construction
of the pollution control equipment. By virtue of title
retention provisions of the Purchase Agreement and Indenture,
the new Series C Bonds will be secured by a second lien on the
pollution control equipment owned by Potomac. The Trust
Indenture requires that such pollution control equipment be
free of any lien or encumbrance except for certain liens
permitted by the Purchase Agreement. The new Series C Bonds
will be issued pursuant to a supplemental indenture with
specific provisions to be determined at the time of issuance.
The supplemental indenture will also provide that all the
proceeds of the sale of the new Series C Bonds by the County
Commission must be applied to the cost of the refinancing of
the Series B Bonds.
Potomac and the other owners of the Pleasants
Generating Station will continue to have complete control of
the operation of the pollution control equipment and will be
responsible for its maintenance.
<PAGE>
13. Also, Potomac proposes to issue up to 150 000 additional
shares of its cumulative preferred stock with a par value of
up to $100 per share.
14. Potomac anticipates that the preferred stock will be issued
through underwriters after competitive bidding. However, in
order to deal with market conditions as they exist at the
time, Potomac requests the flexibility to issue the preferred
stock through negotiation with underwriters or through private
placement with institutional investors if such procedures are
deemed more economic.
15. The preferred stock will be redeemable in whole or in part at
any time or from time to time (except that prior to ten (10)
years (or such other date as the Company may choose) after the
first day of the month in which the preferred stock is issued,
such stock may not be redeemed directly or indirectly with or
in anticipation of monies borrowed at a cost of money to
Potomac less than the cost of money to it in respect of such
preferred stock) at the option of Potomac, after notice, on
payment of their principal amount plus accrued unpaid
interest, together with a premium that will initially be no
greater than the interest rate and will decline to zero at or
before maturity. The preferred stock may carry a 10-year (or
such other date as the Company may choose) no call provision.
16. Potomac anticipates selling the preferred stock through the
alternate competitive bidding procedures consistent with SEC
Rule 50 as described in SEC Release No. 35-22623 of
September 2, 1982 and SEC Rule 415 "Shelf-Registration." The
price or prices to be paid to Potomac and the dividend rate or
<PAGE>
rates would be determined by such competitive bidding. The
dividend rate or rates, the price or prices to Potomac and the
public offering price or prices, if any, of the preferred
stock, and the prices at which the preferred stock may be
redeemed, are to be determined, and the award of the preferred
is to be made, in accordance with the bid which offers the
lowest cost of money to Potomac. In the event, however, that
market or other conditions make competitive bidding
impracticable or undesirable, Potomac proposes to negotiate
with underwriters for the purchase of the preferred stock or
privately place the preferred stock with institutional
investors. Under such circumstances the dividend rate or
rates and the price or prices to be paid Potomac will be
determined by such negotiations. A copy of the proposed form
of public invitation for bid for the purchase of the preferred
stock, including the proposed form of bid and purchase
contract will be filed herein when available as exhibit DFZ-2
as part of the direct testimony and exhibits of Dale F.
Zimmerman filed as part of this petition.
17. Potomac will use the proceeds of the preferred stock proposed
to be issued for the refunding of $5 million of its $8.32
Cumulative Preferred Stock, Series F, and $10 million of its
$8.00 Cumulative Preferred Stock, Series G.
18. Potomac files as part hereof the direct testimony and exhibits
of Dale F. Zimmerman detailing the proposed transactions and
including as Exhibit DFZ-3 the financial condition of Potomac.
19. There is appended hereto an affidavit made by three of the
directors of Potomac showing that it is the intention of
<PAGE>
Potomac, in good faith, to use the proceeds of the Bonds,
Pollution Control Notes and Preferred Stock proposed to be
issued for the purposes set forth in this petition.
20. No franchise or right of Potomac is capitalized, directly or
indirectly, except as authorized by the Public Service
Commission Law.
WHEREFORE, Potomac prays that the Public Service Commission of
Maryland, by its order, authorize the issuance by it of additional Bonds,
Pollution Control Notes and Preferred Stock as set forth in this petition
and take such further action in the premises as may be requisite.
Respectfully submitted,
THE POTOMAC EDISON COMPANY
DALE F. ZIMMERMAN
Dale F. Zimmerman
Secretary & Treasurer
Counsel:
PHILIP J. BRAY
Philip J. Bray, Esq.
Attorney-at-Law
The Potomac Edison Company Building
10435 Downsville Pike
Hagerstown, MD 21740-1766
(301) 790-6283
November 24, 1993<PAGE>
A F F I D A V I T
<PAGE>
STATE OF MARYLAND )
) ss:
COUNTY OF WASHINGTON )
I HEREBY CERTIFY that on this _________ day of November, 1993,
before me, the subscriber, a Notary Public of the State of Maryland, in
and for the County of Washington, personally appeared Dale F. Zimmerman,
Secretary and Treasurer of The Potomac Edison Company, and made oath in
due form of law that the matters and facts set forth in the foregoing
Petition including his direct testimony and exhibits are true to the best
of his knowledge, information and belief.
WITNESS my hand and notarial seal, the day and year last above
written.
PATTI M. SOWERS
Patti M. Sowers
Notary Public
My Commission expires December 1, 1994.
(NOTARIAL SEAL)
<PAGE>
PAGE 1 OF 2
AFFIDAVIT OF THREE DIRECTORS
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
I HEREBY CERTIFY that on this ______ day of November, 1993, before
me the subscriber, a Notary Public of the State of New York, in and for
the County of New York aforesaid, personally appeared Messrs. K. Bergman
and S. I. Garnett, II, two of the directors of The Potomac Edison Company
("Potomac"), and made oath in due form of law that they are directors of
Potomac; that they have read the foregoing Petition; and that it is the
intention of Potomac in good faith to use the proceeds of the Common or
Preferred Stock proposed to be issued for the purpose set forth in said
Petition.
WITNESS my hand and notarial seal, the day and year last above
written.
______________________________
Notary Public
(NOTARIAL SEAL)
<PAGE>
PAGE 2 OF 2
AFFIDAVIT OF THREE DIRECTORS
STATE OF MARYLAND )
) ss:
COUNTY OF WASHINGTON )
I HEREBY CERTIFY that on this _______ day of November, 1993, before
me the subscriber, a Notary Public of the State of Maryland, in and for
the County of Washington aforesaid, personally appeared Mr. A. J. Noia, a
director of The Potomac Edison Company ("Potomac"), and made oath in due
form of law that he is a director of Potomac; that he has read the
foregoing Petition; and that it is the intention of Potomac in good faith
to use the proceeds of the Common or Preferred Stock proposed to be issued
for the purpose set forth in said Petition.
WITNESS my hand and notarial seal, the day and year last above written.
_________________________
Notary Public
(NOTARIAL SEAL)
My commission expires December 1, 1994.
Exhibit D-2(a)
B E F O R E
THE PUBLIC UTILITIES COMMISSION OF OHIO
In the Matter of the Application
of Monongahela Power Company for
authority to issue and sell
additional shares of Cumulative 93- -EL-AIS
Preferred Stock, additional
First Mortgage Bonds and to enter
into other evidences of indebtedness.
To the Honorable
The Public Utilities Commission of Ohio
The Application respectfully shows:
I
The Applicant, Monongahela Power Company (hereinafter called
"Company" or "Applicant"), is an Ohio corporation, having its principal
office in the City of Marietta in said State, and a public utility as
defined in Section 4905.02 of the Ohio Revised Code. The Company is
engaged in the generation, transmission, distribution and sale of
electricity in Washington, Monroe, Morgan, Athens, Noble and Meigs
Counties, Ohio, and elsewhere, including the northern half of West
Virginia, and in the ownership and operation of an undivided interest in
a power generating station (Hatfield's Ferry Station) in Pennsylvania.
The name and mailing address of the Company is:
Monongahela Power Company
1310 Fairmont Avenue
P.O. Box 1392
Fairmont, WV 26555-1392
II
The Applicant is a wholly owned subsidiary of Allegheny Power System,
Inc., (hereinafter called "Allegheny"), a Maryland corporation, and a
holding company registered under the Public Utility Holding Company Act of
1935. Allegheny as a registered holding company, and the Company as a
subsidiary of a registered holding company, are subject to the
jurisdiction of the Securities and Exchange Commission under the Public
Utility Holding Company Act of 1935. In addition, the Applicant is
subject as to certain aspects of its operations to the jurisdiction of the
Federal Energy Regulatory Commission and the West Virginia Public Service
Commission.
III
The authorized capital stock of Applicant totals 9,500,000 shares
having a total par value of $550,000,000, represented by 1,500,000 shares
of $100 par value Cumulative Preferred Stock, 640,000 of which are now
outstanding, and 8,000,000 shares of $50 par value Common Stock, of which
5,891,000 shares are now outstanding and owned by Allegheny. Outstanding
First Mortgage Bonds of the Applicant total $373,000,000 principal amount.
<PAGE>
IV
1994 FINANCING PROGRAM
The Applicant expects to engage in a number of financial activities
in 1994 that will enable the Company to meet its needs for new capital and
to engage in extensive refunding of higher cost debt and equity if market
conditions are favorable. The refunding, which would only be done if a
net present worth savings of 3% or more of the principal amount of each
issue redeemed can be realized, may include regular and optional
redemptions or tender offers in selected circumstances. As the Commission
knows, the financial markets can change quickly and it is the Company's
desire to be in a position to take action quickly when it appears in our
customers' best interest to do so. Interest rates are at their lowest
level in years and the Company wants to take advantage of this and feels
it has put together a financing plan that will enable it to do so. More
specifically, Applicant anticipates that in 1994 its long-term financing
requirements will be met with a combination of new and refunding money and
that this will be accomplished through a combination of equity and debt
financing expected to include the following:
1) Up to $50 million of new money through the sale of preferred
stock to the public or private investors,
2) Up to $35 million of refunding preferred stock to redeem up to
$35 million of higher cost preferred,
3) Up to $225 million of refunding first mortgage bonds to redeem
up to $225 million of higher cost bonds by way of a call or
tender offer,
4) Up to $25 million of refunding pollution control revenue notes
to redeem $25 million of higher cost notes, and
5) Solid waste disposal revenue notes under authority previously
granted by this Commission in its Order of April 9, 1992, in
Case No. 92-376-EL-AIS. That Order authorized Monongahela's
issuance of up to $45 million of solid waste disposal notes, $5
million of which were issued on May 6, 1992 and $10.675 million
of which were issued on May 26, 1993.
Therefore,
V
PREFERRED STOCK
Applicant seeks authorization to issue and sell additional shares of
Cumulative Preferred Stock (the "Stock") in the amount of up to $85
million. Up to $50 million of new Stock will be used to pay and prepay
short-term indebtedness used for general corporate purposes and to pay for
Applicant's construction program including construction of scrubbers at
the Harrison Power Station to comply with the Clean Air Act Amendments of
1990 ("CAAA") and up to $35 million will be used for refunding high
dividend preferred currently outstanding, if market conditions warrant.
Applicant desires to have available sufficient flexibility to adjust
its financing program to developments in the market for preferred stock
securities when and as they occur, in order to obtain the best possible
price or prices and dividend rate for the Stock. This flexibility should
include the right to issue traditional perpetual cumulative preferred
<PAGE>
stock with a par value of up to $100 along with the right to issue Market
Auction Preferred Stock ("MAPS"). If the Company chooses to issue
preferred with a par value of other than $100 or if MAPS is determined to
be the appropriate vehicle for the preferred financing the Company's
Charter will be amended before any such transactions are consummated and
any such Charter Amendments will be filed by amendment with the
Commission. It is not known at the present time whether it would be more
advantageous to Applicant to sell the Stock with or without a sinking
fund. If the terms of the Stock include sinking fund provisions, a
description of such provisions will be filed by amendment with the
Commission. The Company anticipates that the Stock will be redeemable at
any time at the option of the Company.
It is presently contemplated that the Stock will be sold at
competitive bidding to be carried out in accordance with the requirements
of Rule 50 of the Rules and Regulations of the Securities and Exchange
Commission under the Public Utility Holding Company Act of 1935, and that
the dividend rate and the price to be paid to Applicant, or if the price
to the Applicant and the initial price to the public are fixed at par, the
compensation per share to be paid to underwriter, will be determined by
such competitive bidding. In the event, however, that market or other
conditions make competitive bidding impractical or undesirable, Applicant
proposes to negotiate either with institutional investors to privately
place or with underwriters for the offering of the said Stock, and the
dividend rate, the price paid to Applicant, and the compensation paid to
the underwriters will be determined by such negotiation. Consequently,
your Applicant will not know the dividend rate, price per share, and net
proceeds available until the bids are received and accepted or
negotiations concluded. If the Company invites proposals and at least two
independent bids for the purchase of the Stock are received, the Company
proposes to proceed to issue and sell the Cumulative Preferred Stock
without further authorization from this Commission. If only one bid for
the purchase of the Cumulative Preferred Stock is received, or if the
Company determines to issue and sell the Cumulative Preferred Stock in a
private placement or in a negotiated underwritten public offering, the
Company will not, without a further order of this Commission, proceed to
issue and sell the Cumulative Preferred Stock at a price to be paid to the
Company of less than 98% or more than 102-3/4% of par value per share, a
dividend rate of more than 300 basis points above the yield to maturity of
30-year U.S. Treasury Bonds as of the date of issue and fees and
commissions of more than 1.2% of the principal amount of each series of
the $100 par value Cumulative Preferred Stock.
Monongahela will use the proceeds realized from the issuance and sale
of up to $50 million of the Stock to pay and prepay short-term
indebtedness used for general corporate purposes and to pay for
Applicant's construction program including construction of scrubbers at
the Harrison Power Station to comply with the CAAA. $35 million of the
Stock will be used to effect the optional redemption, if market conditions
warrant, of any one or more of four series of its currently outstanding
Cumulative Preferred Stock issues as follows:
Current
Principal Optional
Shares Amount Redemption Date of
Series Outstanding Outstanding Price Issue
$8.80G 50,000 $5 million 104.20 1971
$7.92H 50,000 $5 million 103.52 1972
$7.92I 100,000 $10 million 103.52 1973
$8.60J 150,000 $15 million 103.33 1976
<PAGE>
VI
FIRST MORTGAGE BONDS
Monongahela proposes, if market conditions warrant, to issue and sell
up to $225,000,000 aggregate principal amount of its refunding First
Mortgage Bonds (the "New Bonds"), in one or more series, each such series
to have a term or maturity not to exceed 30 years. Said New Bonds shall
have, at the option of the Applicant, either (1) an up to ten (10) year no
call provision, or (2) an up to ten (10) year non-refundable provision.
Thereafter they shall be redeemable at any time, at the option of the
Applicant.
The annual interest rate to be borne by each series and the price to
be paid to the Applicant (which, unless otherwise authorized by the
Securities and Exchange Commission, shall not be less than 98% and shall
not exceed 101.75% of principal amount), and, the compensation to be paid
to the underwriters, will be determined (1) by competitive bidding, (2) by
negotiations between the Applicant and private investors or (3) by
negotiations with underwriters for the sale of such series. It is
expected that the successful bidders or, in the event of a negotiated
transaction, the underwriters, will make a public offering of the bonds,
unless the size of any series offered makes such public offering
impracticable.
It is presently contemplated that the proposed New Bonds will be sold
at competitive bidding to be carried out in accordance with the
requirements of Rule 50 of the Rules and Regulations of the Securities and
Exchange Commission under the Public Utility Holding Company Act of 1935,
and that the interest rate and the price to be paid to Applicant will be
determined by such competitive bidding. If Applicant invites proposals
and at least two independent bids for the purchase of the New Bonds are
received, Applicant may proceed to issue and sell the New Bonds without
further authorization from the Commission. If only one such bid is
received, or if market or other conditions make competitive bidding
impractical or undesirable, and Applicant determines to issue and sell the
New Bonds in a negotiated underwritten public offering or in a private
placement then the interest rate and the price to be paid to Applicant
will be determined by such negotiation. Consequently, your Applicant will
not know the interest rate and net proceeds available to Applicant until
bids are received and opened or negotiations concluded. Applicant will
not, however, without a further order of the Commission, proceed to issue
and sell the New Bonds if the terms of such sale provide for an interest
rate of more than 200 basis points above the yield to maturity of U.S.
Treasury Bonds of comparable maturity.
The refunding First Mortgage Bonds will be issued under and secured,
together with Monongahela's presently outstanding First Mortgage Bonds,
and any Bonds of other series hereafter authorized and issued subject to
the Mortgage Indenture, by the Mortgage Indenture dated August 1, 1945, as
supplemented and amended and as to be further supplemented and amended by
one or more Supplemental Indentures, each to be dated as of the first day
of the month in which the New Bonds issued thereunder are issued and sold.
Monongahela will use the proceeds to be realized from the issuance
and sale of the New Bonds either to make a tender offer for or to effect
the optional redemption prior to maturity, if market conditions warrant,
of any one or of all of the currently outstanding First Mortgage Bonds
series as follows:
<PAGE>
Current Next
Optional Change
Principal Redemp- In Re-
Amount tion demption
Series Maturity Outstanding Price Price
8-7/8% 2019 $70 million 106.70 8-1-94
8-5/8% 2021 $50 million 107.96 11-1-93
8-1/2% 2022 $65 million 107.37 6-1-94
8-3/8% 2022 $40 million No call 7-1-02
VII
OTHER EVIDENCES OF INDEBTEDNESS
Monongahela proposes to enter into transactions involving the
refinancing of certain tax exempt revenue bonds issued by Pleasants
County, West Virginia, the proceeds of which were used to finance the cost
of installation of certain pollution control equipment at the Company's
Pleasants generating station. The pollution control equipment was
installed in order to meet state and Federal pollution control standards.
This Commission previously authorized Monongahela's issuance and sale of
certain evidences of indebtedness concerning this financings.
These pollution control bonds are presently subject to an optional
redemption price of principal amount plus accrued interest. It is
expected that the County will issue a new series of Bonds (the New Bonds)
for the purpose of providing a portion of the funds required to redeem the
County's outstanding Bonds. The New Bonds will be in an aggregate
principal amount equal to the aggregate principal amount of the County's
Bonds outstanding at the time of the refinancing. The New Bonds will be
sold at such time in such principal amount, at such interest rate, and for
such price as shall be approved by Monongahela. The timing of any such
financing will depend on a subjective determination by Monongahela of
market conditions.
Monongahela has been informed that the County has the legal authority
to issue tax exempt revenue bonds and Monongahela understands that legal
opinions to that effect will be delivered to appropriate parties at, or
prior to, the closing. The New Bonds, which will be in registered form,
will bear interest semi-annually at a rate to be determined and will be
issued pursuant to the appropriate Trust Indenture. The Trust Indentures
provide for a mandatory redemption of the Bonds under certain
circumstances and, in addition, the New Bonds will be subject to
redemption at the option of the County exercised at the direction of
Monongahela in accordance with the provisions contained in the form of
Bond.
The proceeds of the sale of the outstanding Bonds by the County were
applied to purchase and complete construction of certain pollution control
equipment and, by virtue of title retention provisions of the Purchase
Agreements and Indentures, the New Bonds will be secured by a second lien
on the pollution control equipment owned by Monongahela. The Trust
Indenture requires that such pollution control equipment be free of any
lien or encumbrance except for certain liens permitted by the Purchase
Agreement. The New Bonds will be issued pursuant to a supplemental
indenture with specific provisions to be determined at the time of
issuance. The supplemental indenture will also provide that all the
proceeds of the sale of the New Bonds by the County must be applied to the
cost of the refinancing of the outstanding Bonds.
<PAGE>
The proceeds to be realized from the issuance of the evidences of
indebtedness to the County will be used to effect the optional redemption
prior to maturity, if market conditions warrant, of the following
outstanding Pollution Control Bonds as follows:
Current Next
Optional Change
Principal Redemp- In Re-
Amount tion demption
County Series Maturity Outstanding Price Price
Pleasants WV "B" 7.750% 2009 $25 million 101.00 2-1-94
VIII
Monongahela has attached hereto a copy of the financial statements of
Applicant as of June 30, 1993, as Exhibit A.
IX
CONCLUSION
Monongahela desires to consummate some or all of the proposed
transactions in order to provide for the permanent financing of capital
facilities constructed and being constructed and to reduce its cost of
long-term financing and thereby help maintain its position as a low cost
producer of electric energy.
WHEREFORE, the Applicant prays, consistent with the Application and
Exhibits filed herein, that an Order be issued by the Commission without
hearing as follows:
(1) authorizing Applicant to invite bids for the purchase of up to
$85 million of its Preferred Stock hereinabove described,
subject to the conditions and terms set forth herein;
(2) authorizing Applicant, in the event a bid for said Preferred
Stock is acceptable to Applicant, and falls within the
parameters herein set forth to execute and deliver to the
successful bidder or bidders an acceptance in writing thereof,
without further authorization by your Honorable Commission;
(3) authorizing Applicant, in the event a bid for said Preferred
Stock is accepted, and falls within the parameters herein set
forth, to issue and sell said Preferred Stock, on or before
December 31, 1994, pursuant to the purchase contract therefor
consisting of the bid and its exhibits, without further
authorization by your Honorable Commission;
(4) authorizing Applicant, in the event competitive bidding is
impractical or undesirable, to negotiate with institutional
investors to privately place or underwriters for the offering of
the Preferred Stock, to enter into a purchase contract with such
investors or underwriters upon completion of such negotiations
and to sell said Preferred Stock to and through such investors
or underwriters, on or before December 31, 1994, without further
authorization from your Honorable Commission so long as the
negotiations are concluded within the parameters set out herein;
and
<PAGE>
(5) authorizing Applicant to invite bids for the purchase of up to
$225 million of First Mortgage bonds for the purpose of
refunding higher cost first mortgage bonds as hereinabove
described;
(6) authorizing Applicant, in the event a bid for the said bonds is
acceptable to Applicant, to execute and deliver to the
successful bidder or bidders an acceptance in writing thereof,
without further authorization by your Honorable Commission;
(7) authorizing Applicant, in the event a bid for said bonds is
accepted, to issue and sell said First Mortgage Bonds on or
before December 31, 1994, pursuant to the purchase contract
therefor consisting of the bid and its exhibits, without further
authorization by your Honorable Commission;
(8) authorizing Applicant, in the event competitive bidding is
impractical or undesirable, and subject to obtaining other
requisite regulatory authority, to negotiate with private
investors or with underwriters for the offering by such
underwriters of the bonds, to enter into a purchase contract
with such investors or underwriters upon completion of such
negotiations and to sell said bonds to and through such
investors or underwriters, without further authorization by your
Honorable Commission;
(9) authorizing that the total of the Preferred Stock and First
Mortgage Bonds to be sold on or before December 31, 1994 for the
purpose of refunding outstanding issues under the authorizations
sought above shall not exceed $35 million and $225 million
respectively;
(10) authorizing Applicant to issue evidences of indebtedness in the
principal amount of up to $25 million on or before December 31,
1994, for the purpose of refinancing an issue of Pleasants
County West Virginia tax-exempt revenue bonds;
(11) authorizing Applicant to execute and deliver to the Pleasants
County Commission the Second Supplemental Agreement to the Trust
Agreement;
(12) authorizing all other and further relief necessary or
appropriate in the premises.
Respectfully submitted,
MONONGAHELA POWER COMPANY
By T. A. BARLOW
T. A. Barlow
Vice President
(SEAL)
ATTEST:
THOMAS C. SHEPPARD, JR.
Thomas C. Sheppard, Jr.
Assistant Secretary
<PAGE>
GARY A. JACK
Gary A. Jack
Attorney for Applicant
Monongahela Power Company
1310 Fairmont Avenue
P.O. Box 1392
Fairmont, West Virginia 26555-1392
STATE OF WEST VIRGINIA,
, SS:
COUNTY OF MARION ,
T. A. Barlow and Thomas C. Sheppard, Jr., being first duly sworn,
depose and state that they are the Vice President and Assistant Secretary,
respectively, of Monongahela Power Company, the Applicant in the foregoing
Application, and that the statements and allegations contained therein are
true to the best of their knowledge, information and belief.
T. A. BARLOW
T. A. Barlow
Vice President
THOMAS C. SHEPPARD, JR.
Thomas C. Sheppard, Jr.
Assistant Secretary
Sworn to and subscribed before me this 27th day of October, 1993.
MARCIA F. JOHNSTON
Marcia F. Johnston
Notary Public
(NOTARY SEAL)
My Commission expires January 20, 2001
<PAGE>
EXHIBIT A
MONONGAHELA POWER COMPANY
STATEMENT OF FINANCIAL CONDITION
June 30, 1993
(a) Amount and classes of stock authorized:
(1) 8 000 000 shares Common Stock - par value $50
(2) 1 500 000 shares Cumulative Preferred Stock - par value $100
(b) Amount and classes of stock issued and outstanding as of June 30,
1993:
5 891 000 shares Common Stock
640 000 shares Cumulative Preferred Stock, as follows:
4.40% Series - 90 000 shares
4.80% Series B - 40 000 shares
4.50% Series C - 60 000 shares
$6.28 Series D - 50 000 shares
$7.36 Series E - 50 000 shares
$8.80 Series G - 50 000 shares
$7.92 Series H - 50 000 shares
$7.92 Series I - 100 000 shares
$8.60 Series J - 150 000 shares
(c) Terms of preference of all preferred stock:
All series of preferred stock entitle the holders thereof to prefer-
ence over holders of common stock in the distribution of dividends
and assets. In the event of any voluntary liquidation, dissolution
or winding up of the affairs of the applicant, the holders of pre-
ferred stock shall be entitled to be paid an amount per share equal
to the then current redemption price thereof, and the amount so
payable in the event of any involuntary liquidation, dissolution or
winding up of the affairs of the applicant shall be the par value
($100) of such shares. The preferred stock has no voting power,
except that if four or more quarterly dividends are in default, the
holders of the preferred stock, voting as a class, are entitled to
elect the smallest number of directors necessary to constitute a
majority of the full Board. The preferred stock of any series may
be redeemed, in whole or in part, at any time by vote of the Board
at the applicable redemption price therefor.
<PAGE>
- 2 -
(d) Brief description of each mortgage upon any property of the corpora-
tion, giving date of execution, name of trustee, amount of indebted-
ness authorized to be secured thereby, amount of indebtedness actually
secured and brief description of the mortgaged property or collateral:
There is presently in effect a mortgage indenture dated August 1,
1945, and indentures supplemental thereto, executed by the applicant
upon all its property under which Citibank, N. A., 111 Wall Street,
New York, New York, is the trustee. Said mortgage indenture secures
bonds issued thereunder by the applicant for the purpose of
borrowing money for its corporate purposes and authorizes the
issuance of an initial series of bonds for the aggregate principal
amount of $22 000 000. Thereafter from time to time, upon a showing
that the consolidated net earnings of the applicant and its
subsidiaries available for interest for 12 out of the 15 preceding
months, after provision for depreciation, have been in the aggregate
equal to not less than twice the amount of annual interest charges
on the principal amount of all bonds and prior lien bonds then
outstanding or applied for, additional bonds of any series may be
issued in an aggregate principal amount equal to 60% of the net
bondable value of property additions plus the amount of any cash
deposited with the Trustee, and also in substitution for any
refundable bonds. The amount of indebtedness accrued and principal
outstanding is $373 000 000. There is no interest due and unpaid.
(e) Number and amount of bonds authorized and issued under each mortgage,
describing each class separately, giving date of issue, par value,
rate of interest, date of maturity and how secured:
Monongahela Power Company has bonds issued and outstanding under the
above-mentioned Indenture consisting of series, all of which are
First Mortgage Bonds, as follows:
Amount
Series Issued Par Value Outstanding
______ ______ _________ ___________
5-1/2% Series Due 1996 1966 $1 000 $ 18 000 000
6-1/2% Series Due 1997 1967 1 000 15 000 000
8-7/8% Series Due 2019 1989 1 000 70 000 000
8-5/8% Series Due 2021 1991 1 000 50 000 000
8-1/2% Series Due 2022 1992 1 000 65 000 000
7-3/8% Series Due 2002 1992 1 000 25 000 000
8-3/8% Series Due 2022 1992 1 000 40 000 000
7-1/4% Series Due 2007 1992 1 000 25 000 000
5-5/8% Series Due 2000 1993 1 000 65 000 000
____________
$373 000 000
____________
____________
<PAGE>
- 3 -
(f) Other indebtedness of all kinds, giving same by classes and
describing security, if any:
Amount
Indebtedness Outstanding
____________ ___________
(1) Secured notes for pollution control
facilities $65 225 000
(2) Unsecured notes for pollution control
facilities 7 560 000
(3) Instalment purchase obligations for
pollution control facilities 19 100 000
___________
$91 885 000
___________
___________
(g) Amount of interest PAID during twelve months ended June 30, 1993, and
rate thereof; if different rates were paid, the amount paid at each
rate:
Twelve Months Ended
June 30, 1993
_____________
(1) First Mortgage Bonds
5-1/2% Series Due 1996 $ 990 000
6-1/2% Series Due 1997 975 000
7-1/2% Series Due 1998 1 500 000
8-1/8% Series Due 1999 812 500
8-7/8% Series Due 2001 522 639
7-7/8% Series Due 2002 2 756 250
8-5/8% Series Due 2007 718 750
9-5/8% Series Due 2017 2 416 944
8-7/8% Series Due 2019 6 212 500
8-5/8% Series Due 2021 4 312 500
8-1/2% Series Due 2022 5 525 000
7-3/8% Series Due 2002 921 875
8-3/8% Series Due 2022 1 675 000
7-1/4% Series Due 2007 906 250
___________
30 245 208
___________
___________
(2) Secured Notes
$17 500 000 @ 6.375% 1 115 625
25 000 000 @ 7.75% 1 937 500
7 050 000 @ 9.50% 723 697
5 000 000 @ 6.875% 343 750
___________
4 120 572
(3) Unsecured Notes
$ 3,560,000 @ 6.30% 224 280
4,000,000 @ 6.40% 256 000
___________
480 280
(4) Instalment Purchase Obligations
$19 100 000 @ 6.875% 1 313 125
___________
<PAGE>
- 4 -
Total interest on long-term debt $36 159 185
(h) Amount of dividends paid upon each class of stock during previous
five years:
12 Months 12 Months 12 Months 12 Months
Class of Stock 6/30/93 12/31/92 12/31/91 12/31/90
______________ _________ _________ __________ _________
Cumulative Preferred:
4.40% Series $ 396 000 $ 396 000 $ 396 000 $ 396 000
4.80% Series B 192 000 192 000 192 000 192 000
4.50% Series C 270 000 270 000 270 000 270 000
$6.28 Series D 314 000 314 000 314 000 314 000
$7.36 Series E 368 000 368 000 368 000 368 000
$9.64 Series F 146 500 387 500 482 000 482 000
$8.80 Series G 440 000 440 000 440 000 440 000
$7.92 Series H 396 000 396 000 396 000 396 000
$7.92 Series I 792 000 792 000 792 000 792 000
$8.60 Series J 1 290 000 1 290 000 1 290 000 1 290 000
$ 4 604 500 $ 4 845 500 $ 4 940 000 $ 4 940 000
___________ ___________ ___________ ___________
___________ ___________ ___________ ___________
12 Months
Class of Stock 12/31/89
______________ _________
4.40% Series $ 396 000
4.80% Series B 192 000
4.50% Series C 270 000
$6.28 Series D 314 000
$7.36 Series E 368 000
$9.64 Series F 482 000
$8.80 Series G 440 000
$7.92 Series H 396 000
$7.92 Series I 792 000
$8.60 Series J 1 290 000
___________
$ 4 940 000
___________
___________
12 Months 12 Months 12 Months 12 Months
Class of Stock 6/30/93 12/31/92 12/31/91 12/31/90
______________ _________ _________ __________ _________
Common Stock:
Dividends $48 365 110 $46 532 410 $45 309 900 $45 401 910
Rate per share
(avg.) $8.21 $7.90 $8.90 $8.92
12 Months
Class of Stock 12/31/89
______________ _________
Common Stock:
Dividends $44,459,190
Rate per share
<PAGE>
(avg.) $9.09
(i) Financial Statements - June 30, 1993
<PAGE>
- 5 -
(1) Income Statement
(2) Balance Sheet
<PAGE>
- 6 -
MONONGAHELA POWER COMPANY
_________________________
Balance Sheet - June 30, 1993
_____________________________
(Thousands of Dollars)
ASSETS
PROPERTY, PLANT AND EQUIPMENT:
At original cost, including $127 943 000 and
$99 177 000 under construction $1 620 708
Accumulated depreciation (649 995)
__________
970 713
__________
INVESTMENTS AND OTHER ASSETS:
Allegheny Generating Company - common stock at equity 62 297
Other 2 359
__________
64 656
__________
CURRENT ASSETS:
Cash 152
Accounts receivable:
Electric service 39 867
Affiliated and other 11 213
Allowance for uncollectible accounts (1 113)
Materials and supplies - at average cost:
Operating and construction 22 810
Fuel 32 574
Property taxes 9 368
Deferred power costs 9 780
Other 5 922
__________
130 573
__________
DEFERRED CHARGES:
Regulatory assets 153 885
Unamortized loss on reacquired debt 12 594
Other 10 284
__________
176 763
__________
TOTAL ASSETS $1 342 705
__________
__________
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 294 550
Other paid-in capital 2 994
Retained earnings 180 936
__________
<PAGE>
478 480
Preferred stock - not subject to mandatory redemption 64 000
Long-term debt 451 054
__________
993 534
__________
CURRENT LIABILITIES:
Short-term debt 39 560
Accounts Payable 20 324
Accounts payable to affiliates 5 340
- 7 -
Taxes accrued:
Federal and state income -
Other 15 692
Interest accrued 10 545
Other 21 310
__________
112 771
__________
DEFERRED CREDITS AND OTHER LIABILITIES:
Unamortized investment credit 27 981
Deferred income taxes 181 261
Regulatory liabilities 20 682
Other 6 476
__________
236 400
__________
TOTAL CAPITALIZATION AND LIABILITIES $1 342 705
__________
__________
<PAGE>
- 8 -
MONONGAHELA POWER COMPANY
Statement of Income
for Twelve Months Ended June 30, 1993
_____________________________________
(Thousands of Dollars)
ELECTRIC OPERATING REVENUES $634 069
________
OPERATING EXPENSES:
Operation:
Fuel 150 164
Interchange and purchased power, net 148 905
Deferred power costs, net (3 798)
Other 65 407
Maintenance 64 647
Depreciation 54 969
Taxes other than income taxes 36 701
Federal and state income taxes 30 127
________
Total Operating Expenses 547 122
________
Operating Income 86 947
________
OTHER INCOME AND DEDUCTIONS:
Allowance for other than borrowed funds
used during construction 3 080
Other income, net 8 221
________
Total Other Income and Deductions 11 301
________
Income before Interest Charges 98 248
________
INTEREST CHARGES:
Interest on long-term debt 36 595
Other interest 1 363
Allowance for borrowed funds used during
construction (2 141)
________
Total Interest Charges 35 817
________
NET INCOME $ 62 431
________
________
<PAGE>
BEFORE THE
PENNSYLVANIA PUBLIC UTILITY COMMISSION
Securities Certificate of WEST PENN ) SECURITIES CERTIFICATE
POWER COMPANY in respect of the proposed ) No.
1993 issuance of secured non-negotiable )
solid waste disposal notes not to exceed )
$11,535,000 and non-negotiable pollution )
control refunding notes) not to )
exceed $31,500,000 )
TO THE PENNSYLVANIA PUBLIC UTILITY COMMISSION:
1. Name and address of the public utility filing this
Securities Certificate:
West Penn Power Company
800 Cabin Hill Drive
Greensburg, Pennsylvania 15601
2. Name and address of West Penn Power Company attorneys:
Peter J. Dailey and John L. Munsch
800 Cabin Hill Drive
Greensburg, Pennsylvania 15601
3. West Penn Power Company ("West Penn") is a corporation
organized under the laws of the Commonwealth of Pennsylvania on March
1, 1916. Its charter provides that the term of existence of the
Company shall be perpetual. It is vested with lawful authority to
render electric service for light, heat and power, and is now
rendering such service to the public in Adams, Allegheny, Armstrong,
Bedford, Butler, Cameron, Centre, Clarion, Clinton, Elk, Fayette,
Franklin, Fulton, Greene, Huntingdon, Indiana, Jefferson, Lycoming,
McKean, Potter, Somerset, Washington and Westmoreland Counties,
Pennsylvania.
<PAGE>
4. West Penn is a wholly owned subsidiary of Allegheny Power
System, Inc.("APS"). Monongahela Power Company and The Potomac
Edison Company are also wholly owned subsidiaries of APS.
(Monongahela Power Company, The Potomac Edison Company and West Penn
are hereinafter sometimes collectively referred to as the "APS
Companies".)
5. This Securities Certificate includes the following
proposed financings:
$11.535 MILLION OF SOLID WASTE DISPOSAL NOTES
(HARRISON POWER STATION)
West Penn desires to fund its ownership share of certain
solid waste handling and disposal facilities and associated land and
equipment (hereinafter referred to as the "Facilities") which are
required to comply with the Clean Air Act Amendments of 1990 (the
"CAAA") as applicable to the Harrison Power Station ("Harrison")
located in Harrison County, West Virginia through tax exempt
financing. Such financing shall be implemented through the issuance
by West Penn of a secured solid waste disposal note to support the
issuance of each series of solid waste disposal revenue bonds by the
County Commission of Harrison County, West Virginia (the
"Commission"). West Penn's undivided interest in the jointly owned
Harrison Station is 42.24%.
West Penn currently expects to finance its share of the
installation of the Facilities through a combination of sources,
including internally-generated funds, first mortgage bond and
preferred stock issues, short-term debt, the sale of its common stock
to APS, and, to the extent possible, the issuance of solid waste
<PAGE>
disposal notes to secure the Commission's sale of tax exempt solid
waste disposal revenue bonds.
To date, the West Virginia Economic Development Authority
("Authority") has allocated up to $62.705 million of tax exempt bonds
to finance the installation of the proposed Facilities. Pursuant to
the terms of the Authority's notice, the Commission issued and sold
the approved $62.705 million in Bonds on May 6, 1992 and May 26,
1993. West Penn's share of the $62.705 million of tax exempt
financing that was allocated by the Authority and issued and sold by
the Commission was $26.49 million.
The total amount of solid waste disposal revenue bonds (the
"Bonds") which have been registered with the Securities Exchange
Commission is $180 million through December 31, 1995 in one or more
series with maturities of not more than thirty (30) years. It is
expected that the total issue by the Commission in respect of West
Penn's interest will not exceed $38.025 million through December 31,
1994. Therefore, since West Penn has already issued $26.49 million
in Bonds, West Penn expects that the principal amount of additional
Bonds to be allocated by the Authority and issued by the Commission
on behalf of West Penn will not exceed $11.535 million through
December 31, 1994.
The Bonds in respect of West Penn will be issued under a
separate trust indenture with a corporate trustee, approved by but
not affiliated with West Penn (expected to be Mellon Bank, N.A.) and
shall be sold at such times (within the time period or periods
<PAGE>
specified by the Authority), in such principal amounts, at such
interest rates, for such prices, and with such other terms as shall
be approved by West Penn.
West Penn will deliver concurrently with the issuance of each
series of Bonds its non-negotiable secured solid waste disposal note
(the "Note") corresponding to such series of Bonds in respect of
principal amount, interest rates (which may be "floating"), and
redemption provisions (which may include a special right of the
holder to require the redemption or repurchase of the Bond at stated
intervals) and having installments of principal corresponding to any
mandatory sinking fund payments and stated maturities. Payments on
the Notes will be made to the trustee pursuant to the trust indenture
and applied by the trustee to pay the maturing principal and
redemption prices of and interest and other costs on the Bonds with
respect to West Penn as the same become due. West Penn also proposes
to pay any trustees' fees or other expenses incurred by the
Commission, on West Penn's behalf. The obligations of West Penn to
pay for its portion of the Facilities is several and not joint, and
the Notes delivered by West Penn are the obligations solely of West
Penn.
West Penn intends to accomplish by the proposed transactions
a permanent long-term financing of its ownership share of the
Facilities. Market conditions prevailing at the time of the offering
may warrant the issuance of the Notes and Bonds with "floating"
interest rates during all or a portion of the stated life of the
Notes and Bonds based on a specified index as well as provisions
<PAGE>
permitting the Bondholders to require the repurchase of the Bonds at
stated intervals.
The Bonds will be in registered form and will bear interest
semi-annually at rates to be determined. The Bonds will be issued
pursuant to the indenture with specific provisions to be determined
prior to issuance. The indenture will also provide that all the
proceeds of the sale of the Bonds by the Commission must be applied
to the cost of the Facilities.
$31.5 MILLION OF POLLUTION CONTROL REFUNDING NOTES
In 1978, West Penn issued securities described as secured
non-negotiable pollution control notes registered with the
Pennsylvania Public Utility Commission in the amount of $20 million
and of $11.5 million under Securities Certificate No. S-78064384.
Other regulatory authorities vested with authority granted to
Pleasants County (the "County") the rights to sell $31.5 million of
pollution control bonds ("Pollution Control Bonds") to finance the
construction of certain air pollution facilities at the company's
Pleasants Power Station. The Bonds may be redeemed beginning August
1, 1993 at 100.1/2% and beginning August 1, 1994 at 100%.
In view of current and prospective market conditions,
particularly interest rates, West Penn believes that the optional
redemption of the $31.5 million Series B Bonds after January 1, 1994
will be advantageous to its ratepayers and shareholders by reducing
the annual interest cost of its outstanding pollution control notes.
The financing plan would include the sale by the "County"
<PAGE>
of its tax exempt pollution control refunding revenue bonds (the
"Refunding Bonds") in one or more series with maturities and other
terms to be determined. It is expected that the total amount of the
Refunding Bonds to be issued will not exceed $31.5 million. The
Refunding Bonds will be in registered form under a trust indenture
and will be sold in one or more series, at such times, in such
principal amounts, at such interest rates, with such maturities, for
such prices, and with such other terms as shall be approved by West
Penn.
The Refunding Bonds will be issued under a separate trust
indenture with a corporate trustee, approved by West Penn and
expected to be Mellon Bank, N.A., and shall be sold at such times
(within the time period or periods specified by the "County"), in
such principal amounts, at such interest rates, for such prices, and
with such other terms as shall be approved by West Penn.
West Penn will deliver its non-negotiable secured refunding
notes (the "Refunding Notes") corresponding to such series of the
Refunding Bonds in respect of principal amount, interest rates and
redemption provisions and having installments of principal
corresponding to any mandatory sinking fund payments and stated
maturities. Payments on the Refunding Notes will be made to the
trustee pursuant to the trust indenture and applied by the trustee to
pay the maturing principal and redemption prices of and interest and
other costs on the Refunding Bonds with respect to West Penn as the
same become due. West Penn also proposes to pay any trustees' fees,
call premium, or other expenses incurred by the "County", on West
<PAGE>
Penn's behalf. The obligations of West Penn to pay the Refunding
Notes are several and not joint and are the obligations solely of
West Penn.
The Refunding Bonds will bear interest semi-annually at rates
to be determined and the Refunding Bonds will be issued pursuant to
the indenture which may provide for redemption, sinking funds, no-
call and other appropriate provisions to be determined. The
indenture will also provide that all the proceeds of the sale of the
Refunding Bonds by the "County" must be applied to the cost of
redeeming the "Pollution Control Bonds".
6. West Penn will deliver concurrently with the issuance of
each series of Bonds its non-negotiable secured Notes corresponding
to such series of Bonds. Payments on such Notes will be made to the
Trustees under the trust indentures described above and applied by
the Trustees to pay the maturing principal and redemption prices of
and interest and other costs on the Bonds as the same become due.
West Penn also proposes to pay any Trustees' fees or other expenses
incurred by the "County" with respect to West Penn.
7. The purpose for which West Penn proposes to issue the
Notes are:
To provide an economic source of financing by the County
Commission of Harrison County for non-revenue producing solid waste
disposal equipment which is required at Harrison Station to comply
with Phase I of the CAAA.
To provide for the optional redemption of the Pleasants
County non-revenue producing pollution control bonds.
<PAGE>
West Penn has been advised that the annual interest rate
on tax exempt bonds has been 1% to 3% lower than the interest rate on
taxable obligations of comparable quality, depending upon the type to
be sold.
8. West Penn has filed an application, Form U-1, with the
Federal Securities and Exchange Commission with respect to the
proposed Harrison transactions under the Public Utility Company Act
of 1935, and will be filing Form U-2 with regard to the Pleasants
refundings.
9. There are appended hereto and made a part hereof the
following exhibits:
A. Balance Sheet of West Penn at August 31, 1993.
B. Statements of Income and Retained Earnings of West Penn
for twelve months ended August 31, 1993.
C. Statement with respect to utility plant accounts of West
Penn as of August 31, 1993.
D. Statement of securities of other corporations owned by
West Penn as of August 31, 1993.
E. Statement showing the status of funded debt of West Penn
outstanding as of August 31, 1993.
F. Statement showing the status of the outstanding capital
stock of West Penn as of August 31, 1993.
G. None. No Registration Statement has been or will be
filed with the Securities and Exchange Commission under
the Securities Act of 1933 in respect of the proposed
transactions.
<PAGE>
H. Copy of Application, Form U-1, for Harrison filed with
the Securities and Exchange Commission pursuant to the
Public Utility Holding Company Act of 1935. (Pleasants to
be filed by amendment.)
I. Copy of resolution of the Board of Directors of West Penn
authorizing the proposed transactions. (To be supplied
by amendment.)
J. Copy of Forms of Note. (To be supplied by amendment.)
K. Statement showing, in journal entry form, all charges or
credits proposed to be made on the books of account of
West Penn as a result of the proposed issuance of the
notes, covered by this Securities Certificate.
L. Proposed form of Financing Agreements. (To be filed by
amendment).
M. Mortgage and Security Agreements. (To be filed by
amendment).
WHEREFORE, West Penn Power Company requests that the
Pennsylvania Public Utility Commission register this Securities
Certificate pursuant to Chapter 19 of the Public Utility Code.
Respectfully submitted,
WEST PENN POWER COMPANY
/s/ Charles V. Burkley
Date: November 4, 1993 Charles V. Burkley, Comptroller
<PAGE>
A F F I D A V I T
COMMONWEALTH OF PENNSYLVANIA )
:
COUNTY OF WESTMORELAND )
CHARLES V. BURKLEY, being duly sworn according to law,
deposes and says that he is Comptroller of WEST PENN POWER COMPANY;
that he is authorized to and does make this affidavit for it; and
that the facts set forth above are true and correct to the best of
his knowledge, information and belief, and he expects the said WEST
PENN POWER COMPANY to be able to prove the same at the hearing
hereof.
/s/ Charles V. Burkley
(Signature of affiant)
Sworn to and subscribed before me
this 4th day of November, 1993.
/s/ Kathryn L. Hibbert
Notary Public
<PAGE>
EXHIBIT A
WEST PENN POWER COMPANY
BALANCE SHEET
AUGUST 31, 1993
Assets and Other Debits
Utility Plant
Electric plant
In service $2,143,170,244
Plant purchased 351,000
Held for future use 78,625,730
Completed construction not classified 224,700,039
Construction work in progress 258,349,867
Acquisition adjustment 179,163
Accumulated provision for depreciation of electric
plant-in-service (940,463,561)
Accumulated provision for amortization (1,797,725)
Total utility plant $1,763,114,757
Other Property and Investments
Nonutility property $ 3,124,779
Accumulated provision for depreciation of
nonutility property (406,586)
Investment in associated companies 107,396,516
Investment in subsidiary companies 2,691,660
Other investments 82,685
Special funds 1,723,384
Total other property and investments $ 114,612,438
Current and Accrued Assets
Cash $ -
Special deposits 37,086,308
Working funds 469,189
Temporary cash investments -
Customer accounts receivable 89,091,154
Other accounts receivable 3,363,841
Accumulated provision for uncollectible accounts (899,354)
Receivables from affiliated companies 13,008,700
Fuel stock 43,301,282
Plant materials and operating supplies 36,337,596
Stores expense undistributed 385,100
Prepayments 2,325,564
Interest, dividends, and rents receivable 201,054
Accrued utility revenues 1,651,200
Miscellaneous current and accrued assets 11,115,223
Total current and accrued assets $ 237,436,857
Deferred Debits
Unamortized debt expense $ 2,843,246
Regulatory assets 335,360,969
Preliminary survey charges 17,562,166
Clearing account (1,906)
Temporary facilities (20,393)
Unamortized loss on reacquired debt 11,803,156
Miscellaneous deferred debits 4,277,941
Total deferred debits $ 371,825,179
Total assets & other debits $2,486,989,231
<PAGE>
EXHIBIT A
(continued)
WEST PENN POWER COMPANY
BALANCE SHEET
AUGUST 31, 1993
Liabilities and other Credits
Proprietary Capital
Common capital stock $ 325,994,104
Preferred capital stock 149,707,700
Premium and discount,
net on capital stock - preferred 835,197
Reduction in par or stated value of capital stock
(No change during twelve months
ended August 31, 1993) 431,948
Miscellaneous paid-in capital 54,564,663
Appropriated retained earnings 414,777
Unappropriated retained earnings 418,750,348
Total proprietary capital $ 950,698,737
Long-term Debt
First mortgage bonds $ 614,000,000
Other long-term obligations 202,075,000
Unamortized premium on debt 15,216
Unamortized discount on debt (7,227,777)
Total long-term debt $ 808,862,439
Current and Accrued Liabilities
Notes payable $ 6,350,000
Accounts payable 106,094,778
Notes payable to affiliated companies 8,750,000
Payable to affiliated companies 7,759,598
Customer deposits 1,348,688
Taxes accrued 9,448,596
Interest accrued 15,926,188
Tax collections payable 1,201,971
Miscellaneous current and accrued liabilities 18,152,129
Total current and accrued liabilities $ 175,031,948
Deferred Credits
Customer advances for construction - electric $ 3,225,928
Other deferred credits 2,369,437
Regulatory liabilities 42,540,873
Accumulated deferred investment tax credit 56,387,893
Total deferred credits $ 104,524,131
Obligations under capital leases $ 3,406,393
Miscellaneous reserves 8,353,039
Accumulated deferred income tax 436,112,544
Total liabilities and other credits $2,486,989,231
<PAGE>
EXHIBIT B
WEST PENN POWER COMPANY
STATEMENT OF INCOME
TWELVE MONTHS ENDED AUGUST 31, 1993
Utility Operation Income
Operating revenues $1,069,356,932
Operating expenses:
Operating expense $ 633,772,995
Maintenance expense 97,255,762
Deferred power costs (5,808,247)
Depreciation expense 77,695,000
Taxes other than income taxes 89,244,370
Federal income tax 35,933,224
State income tax 7,922,430
Income taxes deferred (5,737,483)
Investment credit amortization (2,592,000)
Amortization of deferred income taxes 8,743,575
Total operating expenses $ 936,429,626
Operating income $ 132,927,306
Other Income and Deductions
Other income and deductions, net $ 13,885,645
Allowance for other funds used during construction 5,845,074
Total other income and deductions $ 19,730,719
Gross income $ 152,658,025
Interest Charges
Interest on first mortgage bonds $ 45,888,110
Interest on other long-term obligations 13,921,878
Amortization of debt discount and expense 1,167,590
Amortization of premium on debt - (credit) (36,942)
Interest on debt to affiliates 70,869
Other interest expense 790,298
Allowance for borrowed funds used during construction(4,290,529)
Total interest charges $ 57,511,274
Net income $ 95,146,751
<PAGE>
EXHIBIT B
(continued)
WEST PENN POWER COMPANY
STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED AUGUST 31, 1993
Balance at September 1, 1992 $413,992,947
Add:
Net Income 95,146,751
Total $509,139,698
Deduct:
Dividend appropriations
4-1/2% Preferred $ 1,336,853
4.20% Preferred, Series B 210,000
4.10% Preferred, Series C 205,001
$7.00 Preferred, Series D 700,000
$7.12 Preferred, Series E 712,000
$8.08 Preferred, Series G 808,000
$7.60 Preferred, Series H 760,000
$7.64 Preferred, Series I 764,000
$8.20 Preferred, Series J 1,640,000
Market Auction 892,033
Common 81,946,686
Total $ 89,974,573
Balance at August 31, 1993 $419,165,125
<PAGE>
EXHIBIT C
WEST PENN POWER COMPANY
STATEMENT WITH RESPECT TO UTILITY PLANT ACCOUNTS
AUGUST 31, 1993
Balance
August 31, 1992
(per statements
filed on
October 15, 1992)
Certificate No.
S920281
S920282
Account S920283
Number Utility S920290 Additions Retirements
101 Electric plant
in service $2,079,740,871 $ 82,204,473 $18,135,838
102 Plant purchased - 351,000 -
105 Held for future
use 76,434,054 2,023,485 (164,769)
106 Completed construction
not classified 204,246,629 20,453,410 -
107 Construction work
in progress 142,001,330 116,348,537 -
114 Acquisition
adjustment 319,977 - -
Total utility plant $2,502,742,861 $221,380,905 $17,971,069
<PAGE>
EXHIBIT C
(continued)
WEST PENN POWER COMPANY
STATEMENT WITH RESPECT TO UTILITY PLANT ACCOUNTS
AUGUST 31, 1993
Account Balance
Number Utility Adjustments August 31, 1993
101 Electric plant
in service $ (639,262) $2,143,170,244
102 Plant purchased - 351,000
105 Held for future
use 3,422 78,625,730
106 Completed construction
not classified - 224,700,039
107 Construction work
in progress - 258,349,867
114 Acquisition
adjustment (140,814) 179,163
Total utility plant $ (776,654) $2,705,376,043
<PAGE>
EXHIBIT D
WEST PENN POWER COMPANY
SECURITIES OF OTHER CORPORATIONS OWNED
AUGUST 31, 1993
Name of Title of Amount Date
Issuer Security Owned Acquired Price Paid Book Value
Allegheny
Pittsburgh Capital 5,000
Coal Company Stock Shares 1918 $ 250 $ 263,241 (A)
West Virginia
Power and
Transmission Capital 30,000
Company Stock Shares 1926 4,500,000 $ 2,691,660(A)
Allegheny
Generating Capital 450
Company Stock Shares 1982 33,750,000(B) $106,078,174(A)
1983 4,500,000(B)
1984 4,500,000(B)
1985 51,750,000(B)
(A) Market values are not applicable, as West Penn Power Company owns
100% of the capital stock of West Virginia Power and Transmission
Company, 50% of Allegheny Pittsburgh Coal Company, the remaining
50% of whose stock is owned by Monongahela Power Company and The
Potomac Edison Company, associated companies, and 45% of
Allegheny Generating Company, the remaining 55% of whose stock is
owned by Monongahela Power Company and The Potomac Edison
Company, associated companies.
(B) Represents capital contributions.
<PAGE>
EXHIBIT E
WEST PENN POWER COMPANY
STATUS OF FUNDED DEBT OUTSTANDING
AUGUST 31, 1993
Total
Dates Principal
Description Interest Term Date of Amount
of Obligation Rate Payable (Years) Maturity Authorized
(a) (b) (c) (d) (e) (f)
First Mortgage Bonds
Series U 4-7/8 JD-1 30 12-1-1995 *
(1) Series V 7 MN-1 30 11-1-1997 *
Series EE 9 JD-1 30 6-1-2019 *
Series FF 8-7/8 FA-1 30 2-1-2021 *
Series GG 7-7/8 JD-1 13 12-1-2004 *
Series HH 7-3/8 FA-1 15 8-1-2007 *
Series II 7-7/8 MS-1 30 9-1-2022 *
(1) Series JJ 5-1/2 JD-1 5 6-1-1998 *
(1) Series KK 6-3/8 JD-1 10 6-1-2003 *
* The amount of bonds authorized is unlimited except that additional
bonds may be issued only under terms of the Indenture. Additional
amounts of any series may be issued.
(1) In June 1993, the Company sold $102 million of 5-1/2% First
Mortgage Bonds maturing in 1998 (Series JJ) and $80 million
of 6-3/8% First Mortgage Bonds maturing in 2003 (Series KK)
in substitution for and in place of $35 million principal
amount of 7-5/8% First Mortgage Bonds (Series AA) which the
Company redeemed and caused to mature on June 29, 1993; $52
million principal amount of 7-1/8% First Mortgage Bonds
(Series W), $25 million principal amount of 7-7/8% First
Mortgage Bonds (Series X), and $40 million principal amount
of 8-1/8% First Mortgage Bonds (Series Z) which the Company
redeemed and caused to mature on July 1, 1993; and $25
million principal amount of 7% First Mortgage Bonds (Series
V) which the Company plans to redeem and cause to mature on
November 1, 1993.
<PAGE>
EXHIBIT E
(continued)
WEST PENN POWER COMPANY
STATUS OF FUNDED DEBT OUTSTANDING
AUGUST 31, 1993
Total Principal Amount
Held by the
Public Utility
Total Principal In
Amount Out- Reacquired Sinking
standing (Not and or
Description Held by the Held in Other
of Obligation Public Utility) Treasury Pledged Funds
(a) (g) (h) (i) (j)
First Mortgage Bonds
Series U $ 27,000,000 None None None
(1) Series V 25,000,000 None None None
Series EE 30,000,000 None None None
Series FF 100,000,000 None None None
Series GG 70,000,000 None None None
Series HH 45,000,000 None None None
Series II 135,000,000 None None None
(1) Series JJ 102,000,000 None None None
(1) Series KK 80,000,000 None None None
$614,000,000
*The amount of bonds authorized is unlimited except that additional
bonds may be issued only under terms of the Indenture. Additional
amounts of any series may be issued.
(1) In June 1993, the Company sold $102 million of 5-1/2% First
Mortgage Bonds maturing in 1998 (Series JJ) and $80 million
of 6-3/8% First Mortgage Bonds maturing in 2003 (Series KK)
in substitution for and in place of $35 million principal
amount of 7-5/8% First Mortgage Bonds (Series AA) which the
Company redeemed and caused to mature on June 29, 1993; $52
million principal amount of 7-1/8% First Mortgage Bonds
(Series W), $25 million principal amount of 7-7/8% First
Mortgage Bonds (Series X), and $40 million principal amount
of 8-1/8% First Mortgage Bonds (Series Z) which the Company
redeemed and caused to mature on July 1, 1993; and $25
million principal amount of 7% First Mortgage Bonds (Series
V) which the Company plans to redeem and cause to mature on
November 1, 1993.
<PAGE>
EXHIBIT F
WEST PENN POWER COMPANY
STATUS OF OUTSTANDING CAPITAL STOCK
AUGUST 31, 1993
Number Amount Out-
of Par standing (Not
Designated by Kind Shares Value Amount Held by the
and Class Authorized Per Share Authorized Public Utility)
(a) (b) (c) (d) (e)
Common 28,902,923 No Par 17,361,586
Shares
Preferred Stock -
Cumulative:
4-1/2% Preferred 297,077 $100 $ 29,707,700 $ 29,707,700
4.20% Preferred,
Series B 50,000 100 5,000,000 5,000,000
4.10% Preferred,
Series C 50,000 100 5,000,000 5,000,000
$7.00 Preferred,
Series D 100,000 100 10,000,00 10,000,000
$7.12 Preferred,
Series E 100,000 100 10,000,000 10,000,000
$8.08 Preferred,
Series G 100,000 100 10,000,000 10,000,000
$7.60 Preferred,
Series H 100,000 100 10,000,000 10,000,000
$7.64 Preferred,
Series I 100,000 100 10,000,000 10,000,000
$8.20 Preferred,
Series J 200,000 100 20,000,000 20,000,000
Market Auction
Preferred 400,000 100 40,000,000 40,000,000
1,497,077 $149,707,700 $149,707,700
<PAGE>
EXHIBIT F
(continued)
WEST PENN POWER COMPANY
STATUS OF OUTSTANDING CAPITAL STOCK
AUGUST 31, 1993
Book
Value
Held by the Public Utility Outstanding
Reacquired In Stock Having
Designated and Sinking No Par Value
by Kind Held by or Other as of Date of
and Class Treasury Pledged Funds Balance Sheet
(a) (f) (g) (h) (i)
Common None None None $325,994,104
Preferred Stock -
Cumulative:
4-1/2% Preferred None None None -
4.20% Preferred, Series B None None None -
4.10% Preferred, Series C None None None -
$7.00 Preferred, Series D None None None -
$7.12 Preferred, Series E None None None -
$8.08 Preferred, Series G None None None -
$7.60 Preferred, Series H None None None -
$7.64 Preferred, Series I None None None -
$8.20 Preferred, Series J None None None -
Market Auction Preferred None None None -
Common Stock Preferred Stock
(Shares) (Shares)
as of as of
August 31, 1993 August 31, 1993
Five largest holders of capital stock:
Class
Cede & Co. New York, NY 10274 168,627 $8.20
Cede & Co. New York, NY 10274 83,352 4-1/2%
Cede & Co. New York, NY 10274 74,476 $7.12
Cede & Co. New York, NY 10274 68,551 $8.08
Cede & Co. New York, NY 10274 76,984 $7.64
Allegheny Power System, Inc.
New York, NY 10017 17,361,586
<PAGE>
EXHIBIT H
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM U-1
APPLICATION OR DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Monongahela Power Company
1310 Fairmont Avenue
Fairmont, WV 26554
The Potomac Edison Company
10435 Downsville Pike
Hagerstown, MD 21740-1766
West Penn Power Company
800 Cabin Hill Drive
Greensburg, PA 15601
________________________________________________________________________
(Name of company or companies filing this statement
and addresses of principal executive offices)
Allegheny Power System, Inc.
________________________________________________________________________
(Name of top registered holding company parent of
each applicant or declarant)
Nancy H. Gormley, Esquire
Vice President
Allegheny Power Service Corporation
12 East 49th Street
New York, NY 10017
________________________________________________________________________
(Name and address of agent for service)
Previously filed with the Securities and Exchange Commission at File
#70-8259
<PAGE>
EXHIBIT K
WEST PENN POWER COMPANY
PRO FORMA JOURNAL ENTRIES
Debit Credit
1A.
Cash - a/c 131 $
11,535,000
Unamortized Debt Discount and Expense - a/c 181 $
Standby/Competitive Loans - a/c 224 $ 11,535,000
To reflect the issuance, for cash, of $11,535,000 principal amount of
Tax-Exempt Bonds.
The entry also reflects any payment of expense of issuance of issuance
of the Tan-Exempt Bonds.
1B.
Amortization of Debt Discount and Expense - a/c 428 $
Unamortized Debt Discount and Expense - a/c 181 $
To amortize any expense of issuance of the Tax-Exempt Bonds over the
life of the Bonds.
<PAGE>
EXHIBIT K (cont'd)
WEST PENN POWER COMPANY
PRO FORMA JOURNAL ENTRIES
2A. Debit Credit
Cash - a/c 131 $31,500,000
The REPLACEMENT Bonds - a/c $31,500,000
To reflect the issuance and sale to underwriters, for cash, of
$31,500,000 principal amount of new Tax-Exempt Bonds (REPLACEMENT Bonds)
to refund $31,500,000 principal amount of EXISTING Tax-Exempt Bonds
bearing high coupon rates. Interest rate and price have been estimated
for purpose of this entry.
2B.
EXISTING Bonds - a/c 224 $
Unamortized Loss on
Reacquired Debt a/c 189 $31,500,000
Unamortized Debt Discount
and Expense - a/c 181 $
Cash - a/c 131 $31,500,000
To reflect the reacquisition and redemption of $31,500,000 principal
amount of EXISTING Tax-Exempt Bonds refinanced and replaced by the
issuance and sale of $31,500,000 principal amount of REPLACEMENT Bonds
in entry 2A. above.
Entry also reflects any call premium and other expense incurred in the
refunding and replacement process.
2C.
Amortization of Debt Discount and Expense - a/c 428 $
Unamortized Loss on Reacquired Debt - a/c 189 $
Unamortized Debt Discount and Expense - a/c 181 $
To amortize loss on reacquired debt and other expense incurred in the
refunding and replacement process over the life of the REPLACEMENT
Bonds.
<PAGE>
ELECTRIC UTILITY
1. What is the specific purpose of the issuance?
The purpose for which West Penn proposes to issue the Notes is (1)
to provide an economic source of financing for non-revenue
producing solid waste disposal equipment which is required at
Harrison Station to comply with phase 1 of the CAAA. (2) provide
an economic source of financing for issuance of $31.5 million
Pleasants County pollution control refunding notes.
2. If the issuance will be utilized to finance future construction
needs, how were those needs determined?
The issuances will be utilized solely to finance construction of
solid waste disposal facilities at Harrison Station, to issue
pollution control refunding notes at Pleasants Station or to pay
outstanding short-term debt used for those purposes.
3. What are the forecasted customer and load growths as well as
projected reserve margins, for the Company?
See attached Exhibit I.
4. For each major project to be financed:
a. When was the project initiated?
b. When will the project be completed?
c. What is the estimated final cost?
d. What will be the estimated amount of AFUDC charged to the
project?
The construction of the solid waste disposal facilities is
part of the flue-gas desulfurization system at Harrison
necessary to comply with the 1990 CAAA initiated in 1991. The
solid waste disposal facilities are scheduled for completion
<PAGE>
in the latter part of 1994 at a cost not to exceed $180
million.
The estimated amount of AFUDC that will be charged to the
solid waste disposal facilities upon their completion cannot
be determined prior to West Penn's receiving rate orders of
the Pennsylvania Public Utilities Commission deciding the
timing and allowance of the Facilities' Construction Work in
Progress in rate base which will impact the amount of AFUDC
charged to these facilities.
5. How does the cost of the securities compare with the costs of
similar securities currently being issued within the industry?
The answer to the question cannot be determined until the
transactions are completed.
6. How does the cost of this type of security compare with other
types of securities currently being issued within the industry?
Generally speaking, the annual interest rate on tax-exempt bonds
has been lower by approximately one to three full percentage
points than the interest rate on taxable obligations of comparable
quality, depending upon the type to be sold.
7. What restrictive conditions are included in the agreements?
The bonds will be issued pursuant to trust indentures and shall be
sold in one or more series, at such times, in such principal
amounts at such interest rates, with such maturities, for such
prices, and with such other terms as shall be determined and
approved by West Penn. The indentures will also provide that
substantially all the proceeds of the sale of the bonds must be
applied to the cost of the Facilities with respect to Harrison and
to the costs of the refunding with respect to Pleasants.
<PAGE>
8. What effects will these issuances have upon the capital structure
of the Company?
Please see attached Exhibit II.
9. What are the projected financing needs for the next five years?
Please see attached Exhibit III.
10. How does the Company plan to meet its projected future financing
needs?
Please see attached Exhibit III.
11. What is the amount of debt which will fall due in each of the
future five-year periods?
Please see attached Exhibit IV.
12. How does the Company anticipate meeting each of the obligations as
they fall due?
The long-term obligations will be met as they fall due through
internal cash generation or with short-term borrowings which will
eventually be retired either by internal cash generation or by
issuance from time to time of first mortgage bonds, preferred
stock, common stock and such other securities as this Commission
and other regulatory bodies having jurisdiction may authorize.
<PAGE>
EXHIBIT I
WEST PENN POWER COMPANY
FORECAST OF TOTAL REGULAR CUSTOMERS
AT YEAR END
1993 645007
1994 651334
1995 657974
1996 664778
1997 671400
1998 677874
1999 684461
2000 691004
2001 697309
2002 703504
2003 709712
2004 715896
2005 722075
2006 728213
2007 734214
2008 739993
FROM THE 1993 FORECAST OF PEAKS AND NET POWER SUPPLY (LF9308)
<PAGE>
Exhibit I (cont'd)
<TABLE>
<CAPTION>
ALLEGHENY POWER SYSTEM
INTERIM INTEGRATED RESOURCE PLAN
Based Upon August 1993
Mean-Value Forecast for Winter Peak Period
1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03
DEMAND-SIDE MW
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross Winter Peak Demand 7162 7345 7520 7673 7802 7946 8097 8207 8359 8494
Demand-Side Management
Previous Year -360 -375 -399 -415 -446 -477 -510 -533 -561 -584
Change -14 -24 -17 -31 -31 -33 -23 -28 -23 -23
Total Demand-Side Management -375 -399 -415 -446 -477 -510 -533 -561 -584 -606
Total Winter Peak Demand[a][b] 6787 6946 7105 7227 7325 7436 7564 7646 7775 7888
SUPPLY-SIDE MW
PURPA Generation [c]
Previous Year 210 290 290 290 290 290 290 470 470 470
Change 80 0 0 0 0 0 180 0 0 0
Total PURPA Generation 290 290 290 290 290 290 470 470 470 470
Owned Active Capacity
Previous Year 7981 7981 7981 7981 8102 8223 8309 8309 8484 8659
Change 0 0 0 121 121 86 0 175 175 175
Total Owned Active Capacity 7981 7981 7981 8102 8223 8309 8309 8484 8659 8834
Non-Affiliated Transactions 300 300 300 300 300 320 290 220 200 200
Total Supply-Side Resources 8571 8571 8571 8692 8813 8919 9069 9174 9329 9504
RESERVE MARGIN [e] 26.5% 23.5% 20.8% 20.4% 20.4% 20.1% 20.0% 20.1% 20.1% 20.6%
</TABLE>
a. Allegheny Power System Forecast of Peak Demands and Net Power Supply (August
1993). Actual peak hour demands have equal probability of being over or
under the forecast values due to weather variations. The winter peak
is assumed to occur in December of a given year or in January or February of the
following year and reflects the impact of load diversity among the
operating companies. Included in the Total Winter Peak demand are
projected interruptible loads totaling 43 MW. Capacity to serve these
interruptible loads is included in the supply-side resources
shown above; however, a reserve margin is not provided as this load may
be interrupted for short term resource deficiencies.
b. Eastalco, whose contractual obligations could expire on March 31, 2000, is
assumed to continue normal operations through the forecast interval.
Eastalco has a winter peak demand contribution of about 130 MW.
c. PURPA Generation represents the capacity expected to be purchased from small
power production and cogeneration qualifying facilities pursuant to the
Public Utility Regulatory Policies Act of 1978 (PURPA).
d. Non-affiliated transactions on an APS basis include: 1) the exchange of
capacity with Duquesne Light Company (DLCO) with APS receiving 100 MW over the
winter peak period and providing DLCO with up to 200 MW during
selected periods in the spring and fall to equalize the exchange. This
transaction is currently in effect through 1998/99 2) a peak diversity
exchange with Virginia Power (VP) of 200 MW beginning in 1993 and continuing
through the planning period with VP providing capacity to APS during the
winter months and APS providing capacity to VP during the summer months.
Either party can terminate the diversity schedule with a minimum
34 months notice; and 3) supplemental capacity of 20 MW, 90 MW, and 20 MW
in the winter peak periods of 1998/99 through 2000/01, respectively. Some
potential sources for this capacity are limited term purchases from a
non-affiliated utility or additional capacity exchange with DLCO and
VP by extending and/or increasing contracted capacity.
e. Reserve Margin is calculated in the following manner in accordance with Note
a: [("Total Supply-Side Resources" - "Interruptible Load") / ("Total Winter Peak
Demand" - "Interruptible Load")] - 1. In order to sustain the 20% minimum APS
reserve margin, the System must be able to maintain its generating facilities to
achieve an equivalent availability of not less than 80%.
f. Some values may not sum exactly due to rounding.
August 20, 1993
<PAGE>
Exhibit I (cont'd)
ALLEGHENY POWER SYSTEM
INTERIM INTEGRATED RESOURCE PLAN
EXISTING GENERATION CAPACITY
Allegheny Power System Existing Generation Capacity
- January Net Seasonal Operating Capacity
Station MW Unit MW Unit MW Unit MW
Albright 292 Unit 1 76 Unit 2 76 Unit 3 140
Armstrong 352 Unit 1 176 Unit 2 176
Fort Martin 831 Unit 1 276 Unit 2 555
Harrison 1920 Unit 1 640 Unit 2 640 Unit 3 640
Hatfield's Ferry 1660 Unit 1 555 Unit 2 555 Unit 3 550
Mitchell 438 Unit 1 77 Unit 2 77 Unit 3 284
Pleasants 1242 Unit 1 621 Unit 2 621
Rivesville 141 Unit 5 48 Unit 6 93
Smith 114 Unit 3 27 Unit 4 87
Springdale 207 Unit 7 86 Unit 8 121
Willow Island 243 Unit 1 55 Unit 2 188
Bath County PS 840 APS's 40% Share of Bath County Capacity
Lake Lynn 52 4 Units 13 MW each
PE Hydro 10 8 Stations at different locations
8342 MW January Net Seasonal Operating Capacity
361 MW Cold Reserve Capacity
7981 MW Total Owned Active Capacity
PURPA Existing Generation Capacity
January Net Seasonal Operating Capacity
AES Beaver Valley 120
Allegheny L/D 5 6
Allegheny L/D 6 7
Grant Town 80
Hannibal 27
West Virginia Univ 50
290 MW Total PURPA
August 20, 1993
ALLEGHENY POWER SYSTEM
INTERIM INTEGRATED RESOURCE PLAN
GENERATION CAPACITY CHANGES [a]
Yearly
Yearly Owned
Planning Change in Generation Capacity PURPA Capacity
Year Date Unit/Project Description MW Change Change
1993/94 No Change 0 0 0
1994/95 Dec 1994 Harrison 1-2-3 Scrubber Rerate -51
Dec 1994 Mitchell 1-2 (one boiler) Reactivate 51 0 0
1995/96 No Change 0 0 0
1996/97 Oct 1996 Mitchell 1-2 (two add'l boilers Reactivate 103
Mitchell 1-2 (boiler modification Rerate 18 0 121
1997/98 Oct 1997 Springdale 8 Reactivate 121 0 121
1998/99 Oct 1998 Springdale 7 Reactivate 86 0 86
1999/00 Oct 1999 AES Cumberland (PURPA) Addition 180 180 0
2000/01 Oct 2000 Combustion Turbine 1 Addition 175 0 175
2001/02 Oct 2001 Combustion Turbine 2 Addition 175 0 175
2002/03 Oct 2002 Combustion Turbine 3 Addition 175 0 175
a. This plan does not include the additions of the Milesburg (43 MW),
Burgettstown (80 MW), or Shannopin (80 MW) PURPA projects which are terminated
but are currently still in litigation.
August 20, 1993
<PAGE>
Exhibit I (cont'd)
ALLEGHENY POWER SYSTEM
INTERIM INTEGRATED RESOURCE PLAN
PEAK DEMAND REDUCTION GOALS
(Megawatts)
PREVIOUS ACCOMPLISHMENTS [a]
ACTIVITY MW
Time-of-Use Rates 72.90
Load Management Program (1984-85) 62.42
Load Modification Plan (1986-92) 224.69
TOTAL 360.01
<TABLE>
<CAPTION>
PROJECTED PROGRAM RESULTS [b]
PROGRAMS 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03
RESIDENTIAL MW
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Thermal Treatment: New 4.81 3.88 5.02 6.61 6.76 7.63 7.69 7.75 7.80 7.87
Thermal Treatment: Existing 2.46 2.55 2.57 2.60 2.62 2.64 2.60 2.54 2.50 2.48
Water Heating Conservation 0.51 0.38 0.39 0.41 0.42 0.44 0.44 0.44 0.44 0.44
Add-on Heat Pump 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Heat Pump Maintenance 0.55 0.67 0.68 0.69 0.71 0.72 0.74 0.75 0.77 0.77
High Efficiency Heat Pump 1.36 1.65 1.79 1.89 1.97 2.07 2.10 2.11 2.16 2.16
New & Existing Technologies 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL RESIDENTIAL: 9.69 9.13 10.45 12.20 12.48 13.50 13.57 13.59 13.67 13.72
COMMERCIAL MW
Thermal Treatment:New&Existing 1.26 1.43 1.49 1.55 1.61 1.61 1.66 1.66 1.66 1.66
Energy Efficient Lighting 3.24 3.13 4.16 6.02 6.57 6.81 6.81 6.81 6.81 6.81
Electronic Condensate Dryer
Controls 0.11 0.20 0.28 0.34 0.34 0.34 0.34 0.30 0.28 0.23
New & Existing Technologies 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL COMMERCIAL: 4.61 4.76 5.93 7.91 8.52 8.76 8.81 8.77 8.75 8.70
INDUSTRIAL MW
Energy Efficient Motors 0.19 0.26 0.34 0.41 0.41 0.41 0.45 0.45 0.48 0.44
Curtailable/Interruptible Rate 0.00 10.00 0.00 10.00 10.00 10.00 0.00 5.00 0.00 0.00
New & Existing Technologies 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL INDUSTRIAL: 0.19 10.26 0.34 10.41 10.41 10.41 0.45 5.45 0.48 0.44
TOTAL PROJECTED PROGRAMS: 14.49 24.15 16.72 30.52 31.41 32.67 22.83 27.81 22.90 22.86
CUMULATIVE PROJECTIONS 14.49 38.64 55.36 85.88 117.29 149.96 172.79 200.60 223.50 246.36
TOTAL DEMAND-SIDE 374.50 398.65 415.37 445.89 477.30 509.97 532.80 560.61 583.51 606.37
MANAGEMENT [c]
</TABLE>
Notes: a. Projected future peak demand reductions from prior years'
demand-side management activities
not including 43 MW from interruptible loads.
b. Based upon the assumptions provided for the 1993 Forecast of
Peak Demand and Net Power Supply.
c. Previous accomplishments plus cumulative projected program
results.
August 20, 1993
<PAGE>
Exhibit I (cont'd)
<TABLE>
<CAPTION>
WEST PENN POWER COMPANY
INTERIM INTEGRATED RESOURCE PLAN
Based Upon August 1993
Mean-Value Forecast for Winter Peak Period
1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03
DEMAND-SIDE MW
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross Winter Peak Demand 3162 3256 3345 3433 3487 3550 3615 3666 3735 3793
Demand-Side Management
Previous Year -142 -144 -152 -155 -164 -178 -182 -187 -191 -195
Change -2 -8 -3 -9 -14 -4 -4 -4 -4 -4
Total Demand-Side Management -144 -152 -155 -164 -178 -182 -187 -191 -195 -199
Total Winter Peak Demand [a] 3018 3104 3190 3269 3309 3368 3428 3475 3540 3594
SUPPLY-SIDE MW
PURPA Generation [b]
Previous Year 133 133 133 133 133 133 133 133 133 133
Change 0 0 0 0 0 0 0 0 0 0
Total PURPA Generation 133 133 133 133 133 133 133 133 133 133
Owned Active Capacity
Previous Year 3206.9 3206.9 3236.4 3236.4 3357.4 3478.4 3564.4 3564.4 3578.4 3592.4
Change 0.0 29.5 0.0 121.0 121.0 86.0 0.0 14.0 14.0 59.5
Total Owned Active Capacity 3206.9 3236.4 3236.4 3357.4 3478.4 3564.4 3564.4 3578.4 3592.4 3651.9
Share of Bath Pumped
Storage [c] 371.1 372.3 374.0 375.4 377.2 377.4 378.1 378.5 379.3 380.0
Affiliated Transactions [d] -57.0 -76.0 -61.1 -115.4 -166.2 -211.3 -124.0 -55.2 18.0 44.3
Non-Affiliated
Transactions [c][e] 132.5 133.0 133.6 134.1 134.7 143.8 130.5 99.1 90.3 90.5
Total Supply-Side Resources 3786.6 3798.6 3815.8 3884.4 3957.0 4007.3 4082.0 4133.8 4213.0 4299.6
RESERVE MARGIN [f] 25.5% 22.4% 19.7% 18.9% 19.6% 19.0% 19.1% 19.0% 19.1% 19.7%
</TABLE>
a. West Penn Power Company Forecast of Peak Demands and Net Power Supply (August
1993). Actual peak hour demands have equal probability of being
over or under the forecast values due to weather variations. The winter
peak is assumed to occur in December of a given year or in January or February
of the following year. Included in the Total Winter Peak demand is a projected
interruptible load of 9 MW. Capacity to serve these
interruptible loads is included in the supply-side resources shown above;
however, a reserve margin is not provided as this load may be interrupted
for short term resource deficiencies.
b. PURPA Generation represents the capacity expected to be purchased from small
power production and cogeneration qualifying facilities pursuant to the
Public Utility Regulatory Policies Act of 1978 (PURPA).
c. Bath County capacity and non-affiliated transactions are allocated to each
operating company based upon the forecast equalization demand ratios for the
month of January, using an average of the three highest monthly
peaks occurring during the 24-month period ending the previous December.
d. Affiliated transactions are based upon the forecast equalization demand
ratios for the month of January, using an average of the three highest
monthly peaks occurring during the 24-month period ending the previous
December. Positive values represent purchases from affiliated companies and
negative values represent sales to affiliates.
e. Non-affiliated transactions on an APS basis include: 1) the exchange of
capacity with Duquesne Light Company (DLCO) with APS receiving 100 MW over
the winter peak period and providing DLCO with up to 200 MW during
selected periods in the spring and fall to equalize the exchange. This
transaction is currently in effect through 1998/99 2) a peak diversity
exchange with Virginia Power (VP) of 200 MW beginning in 1993 and continuing
through the planning period with VP providing capacity to APS during the
winter months and APS providing capacity to VP during the summer months. Either
party can terminate the diversity schedule with a minimum 34 months notice;
and 3) supplemental capacity of 20 MW, 90 MW, and 20 MW
in the winter peak periods of 1998/99 through 2000/01, respectively. Some
potential sources for this capacity are limited term purchases from a
non-affiliated utility or additional capacity exchange with DLCO and VP
by extending and/or increasing contracted capacity.
f. Reserve Margin is calculated in the following manner in accordance with Note
a: [("Total Supply-Side Resources" - "Interruptible Load") / ("Total Winter Peak
Demand" - "Interruptible Load")] - 1. In order to
sustain the 20% minimum APS reserve margin, the System must be able to maintain
its generating facilities to achieve an equivalent availability of not less than
80%.
g. Some values may not sum exactly due to rounding.
August 20, 1993
<PAGE>
Exhibit I (cont'd)
WEST PENN POWER COMPANY
INTERIM INTEGRATED RESOURCE PLAN
EXISTING GENERATION CAPACITY
West Penn Power Company Existing Generation Capacity
- January Net Seasonal Operating Capacity
Station MW Unit MW Unit MW Unit MW
Armstrong 352.0 Unit 1 176 Unit 2 176
Fort Martin 277.5 Unit 2 277.5
Harrison 811.0 Unit 1 270.3 Unit 2 270.3 Unit 3 270.3
Hatfield's Ferry871.5 Unit 1 291.4 Unit 2 291.4 Unit 3 288.8
Mitchell 438.0 Unit 1 77.0 Unit 2 77.0 Unit 3 284
Pleasants 558.9 Unit 1 279.5 Unit 2 279.5
Springdale 207.0 Unit 7 86 Unit 8 121.0
Lake Lynn 52.0 4 Units 13 MW each
3567.9MW January Net Seasonal Operating Capacity
361.0MW Cold Reserve Capacity
3206.9MW Total Owned Active Capacity
PURPA Existing Generation Capacity
January Net Seasonal Operating Capacity
AES Beaver Valley 120
Allegheny L/D 5 6
Allegheny L/D 6 7
133 MW Total PURPA
August 20, 1993
WEST PENN POWER COMPANY
INTERIM INTEGRATED RESOURCE PLAN
GENERATION CAPACITY CHANGES [a]
Yearly
Yearly Owned
Planning Change in Generation Capacity PURPA Capacity
Year Date Unit/Project Description MW Change Change
1993/94 No Change 0 0 0
1994/95 Dec 1994 Harrison 1-2-3 Scrubber Rerate -21.5
Dec 1994 Mitchell 1-2 (one boiler) Reactivate 51 0 29.5
1995/96 No Change 0 0 0
1996/97 Oct 1996 Mitchell 1-2 (2 add'l boilers Reactivate 103
Mitchell 1-2 (boiler modification Rerate 18 0 121
1997/98 Oct 1997 Springdale 8 Reactivate 121 0 121
1998/99 Oct 1998 Springdale 7 Reactivate 86 0 86
1999/00 No Change 0 0 0
2000/01 Oct 2000 Combustion Turbine 1 Addition 14.0 0 14.0
2001/02 Oct 2001 Combustion Turbine 2 Addition 14.0 0 14.0
(R) 2002/03 Oct 2002 Combustion Turbine 3 Addition 59.5 0 59.5
a. This plan does not include the additions of the Milesburg (43 MW),
Burgettstown (80 MW), or Shannopin (80 MW) PURPA projects which are
terminated but are currently still in litigation.
(R) = Revision
August 20, 1993
<PAGE>
Exhibit I (cont'd)
WEST PENN POWER COMPANY
INTERIM INTEGRATED RESOURCE PLAN
PEAK DEMAND REDUCTION GOALS
(Megawatts)
PREVIOUS ACCOMPLISHMENTS [a]
ACTIVITY MW
Time-of-Use Rates 64.55
Load Management Program (1984-85) 23.44
Load Modification Plan (1986-92) 53.69
TOTAL 141.68
<TABLE>
<CAPTION>
PROJECTED PROGRAM RESULTS [b]
PROGRAMS 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03
RESIDENTIAL MW
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Thermal Treatment: New 0.51 0.52 0.52 0.54 0.54 0.54 0.54 0.54 0.54 0.54
Thermal Treatment: Existing 0.40 0.40 0.40 0.40 0.40 0.40 0.33 0.25 0.18 0.11
Water Heating Conservation 0.15 0.16 0.16 0.16 0.16 0.17 0.17 0.17 0.17 0.17
Add-on Heat Pump 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Heat Pump Maintenance 0.17 0.19 0.20 0.21 0.23 0.24 0.26 0.27 0.29 0.29
High Efficiency Heat Pump 0.22 0.43 0.45 0.48 0.50 0.53 0.54 0.54 0.54 0.54
New & Existing Technologies 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL RESIDENTIAL: 1.45 1.70 1.73 1.79 1.83 1.88 1.84 1.77 1.72 1.65
COMMERCIAL MW
Thermal Treatment: New & Exis 0.52 0.63 0.63 0.69 0.69 0.69 0.69 0.69 0.69 0.69
Energy Efficient Lighting 0.12 0.31 0.61 1.10 1.53 1.53 1.53 1.53 1.53 1.53
Electronic Condensate Dryer
Controls 0.00 0.04 0.07 0.09 0.09 0.09 0.09 0.09 0.07 0.07
New & Existing Technologies 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL COMMERCIAL: 0.64 0.98 1.31 1.88 2.31 2.31 2.31 2.31 2.29 2.29
INDUSTRIAL MW
Energy Efficient Motors 0.04 0.11 0.19 0.19 0.19 0.19 0.19 0.19 0.22 0.22
Curtailable/Interruptible Rate 0.00 5.00 0.00 5.00 10.00 0.00 0.00 0.00 0.00 0.00
New & Existing Technologies 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL INDUSTRIAL: 0.04 5.11 0.19 5.19 10.19 0.19 0.19 0.19 0.22 0.22
TOTAL PROJECTED PROGRAMS: 2.13 7.79 3.23 8.86 14.33 4.38 4.34 4.27 4.23 4.16
CUMULATIVE PROJECTIONS 2.13 9.92 13.15 22.01 36.34 40.72 45.06 49.33 53.56 57.72
TOTAL DEMAND-SIDE 143.81 151.60 154.83 163.69 178.02 182.40 186.74 191.01 195.24 199.40
MANAGEMENT [c]
</TABLE>
Notes: a. Projected future peak demand reductions from prior years'
demand-side management activities
not including 9 MW from interruptible loads.
b. Based upon the assumptions provided for the 1993 Forecast of Peak
Demand and Net Power Supply.
c. Previous accomplishments plus cumulative projected program
results.
August 20, 1993
<PAGE>
EXHIBIT II
WEST PENN POWER COMPANY
ACTUAL CAPITALIZATION AT AUGUST 31, 1993
ADJUSTED TO REFLECT
PROPOSED ISSUANCE OF $11,535,000 TAX-EXEMPT BONDS AND
PROPOSED REFINANCING OF $31,500,000 TAX-EXEMPT BONDS
Amount Ratio
Debt
First Mortgage Bonds $ 614,000,000
Redeem First Mortgage Bonds, Series V 7% (25,000,000)
Hatfield Pollution Cntl Rev Bonds, Series "A" 14,435,000
Pleasants Pollution Cntl Rev Bonds, Series "A" 45,000,000
Pleasants Pollution Cntl Rev Bonds, Series "B" 31,500,000
Fort Martin Pollution Cntl Rev Bonds, Series "B" 7,750,000
Mitchell Pollution Cntl Rev Bonds, Series "E" 15,400,000
Mitchell Pollution Cntl Rev Bonds, Series "F" 61,500,000
Harrison Solid Waste Disposal Notes, Series "A" 8,450,000
Harrison Solid Waste Disposal Notes, Series "B" 18,040,000
Redeem Tax-Exempt Bonds - Refinance 31,500,000
Issue Tax-Exempt Bonds - Refinance 31,500,000
Issue Tax-Exempt Bonds - New 11,535,000
Unamortized Premium on Debt 15,216
Unamortized Discount on Debt (7,227,777)
$ 795,397,439 45.55%
Preferred Stock
Cumulative Preferred Stock $ 149,707,700 8.58%
Common Equity
Common Stock $ 325,994,104
Other Paid-in-Capital 55,831,808
Retained Earnings 419,165,125
$ 800,991,037 45.87%
Total Capitalization $1,746,096,176 100.00%
<PAGE>
EXHIBIT III
FIVE-YEAR FORECAST 1994-1998*
CONSTRUCTION, INTERNAL GENERATION & EXTERNAL FINANCING REQUIRED
($ MILLIONS)
1994 1995
Gross Construction Expenditures(1) 221.8 158.8
Less: AFUDC 17.4 4.9
Net Construction Expenditures 204.4 153.9
Maturing Long-Term Debt and Preferred Stock --- 27.0
Working Capital Adjustments --- ---
Total Cash Requirements 204.4 180.9
Less: Internal Cash Generation 90.0 96.3
114.4 84.6
Repay Short-Term Debt 2.7 12.1
Temporary Investment Maturities --- ---
Total External Financing Required 117.1 96.7
Tentative Financing Plans
First Mortgage Bonds 65.0 60.0
Preferred Stock --- ---
Common Stock 40.0 30.0
Short-Term Debt 12.1 6.7
Temporary Investments --- ---
Total 117.1 96.7
*Preliminary and subject to substantial change.
(1)West Penn Power Company has not committed to add new utility-owned
generation within the five-year forecast period.
Note: In 1994, to the extent possible, the Company will issue up to
$11.535 million of tax-exempt solid waste disposal notes to
finance, in part, the installation of a flue-gas
desulfurization system at Harrison Power Station.
<PAGE>
EXHIBIT III (cont'd)
FIVE-YEAR FORECAST 1994-1998*
CONSTRUCTION, INTERNAL GENERATION & EXTERNAL FINANCING REQUIRED
($ MILLIONS)
1996 1997
Gross Construction Expenditures(1) 179.0 227.4
Less: AFUDC 6.0 7.3
Net Construction Expenditures 173.0 220.1
Maturing Long-Term Debt and Preferred Stock --- ---
Working Capital Adjustments --- ---
Total Cash Requirements 173.0 220.1
Less: Internal Cash Generation 100.4 110.9
72.6 109.2
Repay Short-Term Debt 6.7 ---
Temporary Investment Maturities --- ( 5.7)
Total External Financing Required 79.3 103.5
Tentative Financing Plans
First Mortgage Bonds 60.0 100.0
Preferred Stock --- ---
Common Stock 25.0 20.0
Short-Term Debt --- ---
Temporary Investments ( 5.7) (16.5)
Total 79.3 103.5
*Preliminary and subject to substantial change.
(1)West Penn Power Company has not committed to add new utility-owned
generation within the five-year forecast period.
Note: In 1994, to the extent possible, the Company will issue up to
$11.535 million of tax-exempt solid waste disposal notes to
finance, in part, the installation of a flue-gas
desulfurization system at Harrison Power Station.
<PAGE>
EXHIBIT III (cont'd)
FIVE-YEAR FORECAST 1994-1998*
CONSTRUCTION, INTERNAL GENERATION & EXTERNAL FINANCING REQUIRED
($ MILLIONS)
1998
Gross Construction Expenditures(1) 321.5
Less: AFUDC 20.2
Net Construction Expenditures 301.3
Maturing Long-Term Debt
and Preferred Stock 103.5
Working Capital Adjustments ---
Total Cash Requirements 404.8
Less: Internal Cash Generation 107.2
297.6
Repay Short-Term Debt ---
Temporary Investment Maturities (16.5)
Total External Financing Required 281.1
Tentative Financing Plans
First Mortgage Bonds 200.0
Preferred Stock ---
Common Stock 100.0
Short-Term Debt ---
Temporary Investments (18.9)
Total 281.1
*Preliminary and subject to substantial change.
(1)West Penn Power Company has not committed to add new utility-owned
generation within the five-year forecast period.
Note: In 1994, to the extent possible, the Company will issue up to
$11.535 million of tax-exempt solid waste disposal notes to
finance, in part, the installation of a flue-gas
desulfurization system at Harrison Power Station.
9/10/93
F:\FINANCE\N35YRCON.WP
<PAGE>
EXHIBIT IV
WEST PENN POWER COMPANY
MATURITIES OF BONDS AND OTHER LONG-TERM OBLIGATIONS
1994-1998
(000'S)
1994 1995 1996 1997 1998
First Mortgage Bonds $ - $27,000 $ - $ - $102,000
Other Long-Term
Obligations $ - $ - $ - $ - $ -
Total Maturities $ - $27,000 $ - $ - $102,000
Exhibit D-4(a)
BEFORE THE
STATE CORPORATION COMMISSION
OF VIRGINIA
COMMONWEALTH OF VIRGINIA, ex rel.
STATE CORPORATION COMMISSION
In re: Application of The Potomac
Edison Company for authority
to issue not more than $195 000 000
of additional first mortgage bonds, CASE NO. ______________
not more than $21 000 000 of pollution
control notes and not more than
$15 000 000 of preferred stock
APPLICATION FOR AUTHORITY TO ISSUE SECURITIES
The Potomac Edison Company ("Applicant"), a Maryland and Virginia
corporation, respectfully shows:
1. Applicant is a public service company and the primary supplier
of electricity to portions of the states of Virginia, Maryland
and West Virginia.
2. After January 1, 1994 and prior to December 31, 1995,
Applicant proposes to issue for cash to the general public, an
aggregate principal amount of not more than $195 000 000 of
First Mortgage Bonds (the "Bonds"). The Bonds shall be issued
in one or more new series, each such series to have a single
maturity of not more than thirty (30) years. Applicant
anticipates that the Bonds will be issued through underwriters
after competitive bidding. However, in order to deal with
market conditions as they exist at the time, Applicant
requests the flexibility to issue the Bonds through
negotiation with underwriters or through private placement
with institutional investors if such procedures are deemed
more economic.
3. It is difficult to determine, under present bond market
conditions, whether it would be more advantageous to Applicant
to sell bonds having a 30-year or some shorter maturity.
Applicant desires to have available sufficient flexibility to
adjust its financing program to developments in the markets
for long-term debt securities when and as they occur, in order
<PAGE>
to obtain the best possible price or prices and interest rate
or rates for the Bonds.
4. It is proposed that Applicant decide on the number of series
and the maturity of the Bonds at a later time and notify
prospective purchasing underwriters as required by the
Securities and Exchange Commission ("SEC").
5. The Bonds are to be issued under the Indenture as of
October 1, 1944, between Applicant and Chemical Bank, as
Trustee, and Thomas J. Foley, as Individual Trustee, as
heretofore supplemented and amended, and under an indenture
supplemental thereto. The Bonds are to bear interest payable
semi-annually. A copy of the Supplemental Indenture, as
executed, will be filed as part of the final report of action
made to the Commission. The bonds will be redeemable in whole
or in part at any time or from time to time (except that prior
to ten (10) years (or such other date as the Company may
choose) after the first day of the month in which the bonds
are issued, they may not be redeemed directly or indirectly
with or in anticipation of moneys borrowed at a cost of money
to Applicant less than the cost of money to it in respect of
such Bonds) at the option of Applicant, after notice, upon
payment of their principal amount plus accrued unpaid
interest, together with a premium that will initially be no
greater than the interest rate and will decline to zero at or
before maturity. The bonds may carry a 10-year (or such other
date as the Company may choose) no call provision.
6. Applicant may elect to sell the Bonds through an alternative
competitive bidding procedure consistent with SEC Rule 50 as
described in SEC Release No. 35-22623 of September 2, 1982.
The Bonds will be registered with the SEC pursuant to a Rule
415 "shelf registration." The price or prices to be paid to
Applicant and the interest rate or rates will be determined by
such competitive bidding. The interest rate or rates, the
price or prices to Applicant and the public offering price or
prices, if any, of the Bonds, and the prices at which the
Bonds may be redeemed, are to be determined, and the award of
the Bonds is to be made, in accordance with the bid which
<PAGE>
offers the lowest cost of money to Applicant. In the event,
however, that market or other conditions make competitive
bidding impracticable or undesirable, Applicant proposes to
negotiate with underwriters for the purchase of the Bonds or
privately place the bonds with institutional investors. Under
such circumstances the interest rate or rates and the price or
prices to be paid Applicant will be determined by such
negotiations.
7. Applicant will use the net proceeds of the Bonds to be issued
for the refunding prior to their respective maturities of $80
million aggregate principal amount of its First Mortgage
Bonds, 9.625% Series issued 1990, due 2020 and $50 million
aggregate principal amount of its First Mortgage Bonds, 8.875%
Series issued 1991, due 2021 through a non-coercive tender
offer if economically justified; and to refund prior to
maturity, after June 1, 1994, $65 million aggregate principal
amount of its First Mortgage Bonds, 9.25% Series issued 1989,
due 2019 if economically justified.
8. Applicant also proposes to enter into a transaction after
January 1, 1994 and prior to December 31, 1995, involving the
refinancing of an issue of tax-exempt revenue bonds (the
"Series B Bonds"), if economically justified, issued by the
Pleasants County Commission of West Virginia (the "County
Commission"), the proceeds of which were used to finance the
cost of installation of certain air pollution control
equipment improvement at the Pleasants Generating Station.
The pollution control equipment was installed in order to meet
West Virginia State and Federal air quality standards as to
particulate emissions. This Commission, by its Order dated
July 14, 1978 in Case No. A-670, previously authorized
Applicant's issuance of up to $21 million of pollution control
notes concerning the above referenced Series B Bonds.
The Series B Bonds were issued August 1, 1978 by
Pleasants County ($21 000 000), bear interest at the rate of
7.30% per annum, mature on August 1, 2008, and are subject to
optional redemption at 100-1/2% of the principal amount plus
accrued interest. The optional redemption price changes to
<PAGE>
100% on August 1, 1994 and thereafter. It is expected that
Pleasants County will issue a new series of bonds (the
"Series C Bonds") for the purpose of providing a portion of
the funds required to redeem the County's Series B Bonds.
Pleasants County's new Series C Bonds will be in an aggregate
principal amount equal to the aggregate principal amount of
the County's Series B Bonds outstanding at the time of the
refinancing, which is the maximum amount permitted by the
Internal Revenue Code for a refinancing of this type. The new
Series C Bonds will be sold at such times, in such principal
amount, at such interest rates, and for such prices as shall
be approved by Applicant. The timing of any such refinancing
will depend on a determination by Applicant of market
conditions which are expected to prevail through the maturity
of the Series B Bonds.
Applicant will deliver concurrently with the issuance of
the Series C Bonds, its non-negotiable Pollution Control Note
corresponding to such series of Bonds in respect of principal
amount, interest rates and redemption provisions and having
installments of principal corresponding to any mandatory
sinking fund payments and stated maturities. Payments on such
Note will be made to the Trustee and applied by the Trustee to
pay the maturing principal and redemption price of and
interest and other costs on the Series C Bonds as the same
become due.
9. Title to the pollution control equipment will remain with
Applicant subject to the second lien granted by Applicant on
the equipment to the County Commission in accordance with the
terms of the Pollution Control Financing Agreement, the Trust
Indenture and the Security Agreement reviewed and approved by
the Commission in Case No. A-670.
10. It is expected that the County Commission will engage Goldman,
Sachs & Co., and any co-managers that may be desirable, for
the purpose of providing financial advice and underwriting the
sale of the Bonds. Applicant has been informed that the
County Commission has the legal authority to issue tax-exempt
revenue bonds in accordance with the documents and Potomac
<PAGE>
understands that a legal opinion to that effect will be
delivered to appropriate parties at, or prior to, the closing.
The new Series C Bonds, which will be in registered form, will
bear interest semi-annually at a rate to be determined and
will be issued pursuant to the Trust Indenture. The Trust
Indenture provides for a mandatory redemption of the Bonds
under certain circumstances. In addition, the new Series C
Bonds will be subject to redemption at the option of the
County Commission, exercised at the direction of Applicant, in
accordance with the provisions contained in the form of Bond.
11. The proceeds of the sale of the Series B Bonds by the County
Commission were applied to purchase and complete construction
of the pollution control equipment. By virtue of title
retention provisions of the Purchase Agreement and Indenture,
the new Series C Bonds will be secured by a second lien on the
pollution control equipment owned by Applicant. The Trust
Indenture requires that such pollution control equipment be
free of any lien or encumbrance except for certain liens
permitted by the Purchase Agreement. The new Series C Bonds
will be issued pursuant to a supplemental indenture with
specific provisions to be determined at the time of issuance.
The supplemental indenture will also provide that all the
proceeds of the sale of the new Series C Bonds by the County
Commission must be applied to the cost of the refinancing of
the Series B Bonds.
Applicant and the other owners of the Pleasants
Generating Station will continue to have complete control of
the operation of the pollution control equipment and will be
responsible for its maintenance.
12. Applicant also proposes to issue, after January 1, 1994 and
prior to December 31, 1995, up to 150 000 additional shares of
its cumulative preferred stock, with a par value of up to $100
per share.
13. Applicant anticipates that the preferred stock would be issued
through underwriters after competitive bidding. However, in
order to deal with market conditions as they exist at the
time, Applicant requests the flexibility to issue the
<PAGE>
preferred stock through negotiation with underwriters or
through private placement with institutional investors if such
procedures are deemed more economic.
14. The preferred stock would be redeemable in whole or in part at
any time or from time to time (except that prior to ten (10)
years (or such other date as the Company may choose) after
the first day of the month in which the preferred stock is
issued, such stock may not be redeemed directly or indirectly
with or in anticipation of monies borrowed at a cost of money
to Applicant less than the cost of money to it in respect of
such preferred stock) at the option of Applicant, after
notice, on payment of its principal amount plus accrued unpaid
interest, together with a premium that will initially be no
greater than the interest rate and will decline to zero at or
before maturity. The preferred stock may carry a 10-year (or
such other date as the Company may choose) no call provision.
15. Applicant anticipates selling the preferred stock through the
alternate competitive bidding procedures consistent with SEC
Rule 50 as described in SEC Release No. 35-22623 of
September 2, 1982 and SEC Rule 415 "shelf-registration". The
price or prices to be paid to Applicant and the dividend rate
or rates would be determined by such competitive bidding. The
dividend rate or rates, the price or prices to Applicant and
the public offering price or prices, if any, of the preferred
stock, and the prices at which the preferred stock may be
redeemed, are to be determined, and the award of the preferred
stock is to be made, in accordance with the bid which offers
the lowest cost of money to Applicant. In the event, however,
that market or other conditions make competitive bidding
impracticable or undesirable, Applicant proposes to negotiate
with underwriters for the purchase of the preferred stock or
privately place the preferred stock with institutional
investors. Under such circumstances the dividend rate or
rates and the price or prices to be paid Applicant will be
determined by such negotiations.
16. Applicant will use the proceeds of the preferred stock
proposed to be issued to redeem $5 million of $8.32 Cumulative
<PAGE>
Preferred Stock, Series F and $10 million of $8.00 Cumulative
Preferred Stock, Series G, if economically justified.
17. The current financial statements of Applicant as of
September 30, 1993 are included as Exhibits A and B.
Applicant, therefore, prays that all requisite authorization under
the laws of Virginia be given for this proposed transaction.
THE POTOMAC EDISON COMPANY
J. D. LATIMER
J. D. Latimer
Vice President
ATTEST:
_______________________________
Secretary
PHILIP J. BRAY
Philip J. Bray, Esq.
The Potomac Edison Company Building
10435 Downsville Pike
Hagerstown, MD 21740-1766
(301) 790-6283
Counsel for Applicant
November 24, 1993
Exhibit D-6(a)
STATE OF MARYLAND
PUBLIC SERVICE COMMISSION
ORDER NO. 71020
IN THE MATTER OF THE APPLICATION *
OF THE POTOMAC EDISON COMPANY
FOR AUTHORITY TO ISSUE NOT MORE *
THAN ONE HUNDRED NINETY-FIVE
MILLION DOLLARS ($195 000 000) * BEFORE THE
ADDITIONAL FIRST MORTGAGE PUBLIC SERVICE COMMISSION
BONDS, NOT MORE THAN TWENTY-ONE * OF MARYLAND
MILLION DOLLARS ($21 000 000) IN
POLLUTION CONTROL NOTES AND UP *
TO 150 000 ADDITIONAL SHARES OF CASE NO. 8622
PREFERRED STOCK. *
The Potomac Edison Company ("Company"), on November 26, 1993, filed
an application with the Commission requesting: (1) authority to issue an
aggregate principal amount of not more than $195 000 000 of additional
First Mortgage Bonds in one or more new series, each such series to have
a single maturity of not more than thirty (30) years; (2) authority to
issue Pollution Control Notes not in excess of $21 000 000 to support the
issuance of tax exempt pollution control revenue bonds by the County
Commission of Pleasants County, West Virginia; and (3) authority to issue
up to 150 000 of additional shares of preferred stock with a par value of
$100 per share.
By memorandum dated January 21, 1994, the Commission's Technical
Staff presented to the Commission its comments regarding the application
and a recommendation that the application be approved.
The Commission, at its Administrative Meeting of January 26, 1994,
reviewed and considered the application and the recommendation of the
Technical Staff. Based on this review, the Commission finds that the
issuance of additional First Mortgage Bonds in one or more new series,
each series having a single maturity of not more than thirty (30) years;
the issuance of Pollution Control notes not in excess of $21 000 000 to
support the issuance of tax exempt pollution control revenue bonds; and
the issuance of 150,000 additional shares of preferred stock, is
consistent with the public convenience and necessity and is reasonably
required for the purposes of the Company, to wit: the reimbursement of
moneys (not secured by or obtained from the issue of stocks, bonds,
securities, notes, or other evidences of indebtedness, payable in whole or
<PAGE>
in part more than 12 months after the date of issuance) expended within
five years next prior to the filing of this application for (iii) the
discharge or lawful refunding of its obligation.
IT IS, THEREFORE, this 28th day of January, in the year Nineteen
Hundred and Ninety-four, by the Public Service Commission of Maryland,
ORDERED: (1) That The Potomac Edison Company is authorized:
(a) To issue $195 000 000 principal amount of its
First Mortgage Bonds in one or more new series, each such series to have
a single maturity of not more than thirty (30) years;
(b) To issue Pollution Control Notes not in excess of
$21,000,000 to support the issuance of tax exempt pollution control
revenue bonds by the County Commission of Pleasants, West Virginia; and,
(c) To issue up to 150 000 additional shares of
preferred stock with a par value of $100.00 per share.
(2) That The Potomac Edison Company shall forward to the
Commission a copy of the underwriting agreement, if any, promptly
following approval by the Board of Directors or Executive Committee of the
Company.
(3) That The Potomac Edison Company shall make reports to
this Commission, duly verified by Affidavits as follows:
(a) That immediately upon the issuance and sale or
other disposition of the bonds, notes and preferred stock hereinbefore
authorized to be issued, showing the fact and the date of such issuance,
the terms and conditions thereof, and the amount realized therefrom.
(b) Within 30 days after June 30, 1994, covering the
period ending on the said date, and thereafter within 30 days after
December 31 and June 30 of each year, covering the six months' periods
ending on the said date, showing the use and application made during such
periods of the proceeds of said bonds, notes and stock issuances, until
such proceeds shall have been fully expended.
By Direction of the Commission,
/s/ RONALD E. HAWKINS
Executive Secretary
TRUE - COPY: TEST
/s/ Ronald E. Hawkins
Secretary
Exhibit D-7(a)
BEFORE THE PUBLIC UTILITIES COMMISSION OF OHIO
In the Matter of the Application of
MONONGAHELA POWER COMPANY for Authority
to Issue and Sell Additional Shares of Case No. 93-1822-EL-AIS
Cumulative Preferred Stock, Additional
First Mortgage Bonds and to Enter into
Other Evidences of Indebtedness.
FINDING AND ORDER
The Commission finds:
(1) Applicant, Monongahela Power Company, is an Ohio corporation and
a public utility as defined in Section 4905.02, Revised Code,
and is subject to the jurisdiction of this Commission.
(2) This Application complies with the provisions of Sections
4905.40 and 4905.41, Revised Code.
(3) Applicant proposes to issue and sell, from time to time, through
December 31, 1994 up to: (a) 850,000 additional shares of its
Cumulative Preferred Stock $100 par value (the "Preferred
Stock"), or Market Auction Preferred Stock (the "MAPS"), or a
combination thereof, for a total cash consideration of up to $85
million; (b) up to $225 million aggregate principal amount of
its refunding First Mortgage Bonds, in one or more series (the
"New Bonds"); and (c) evidences of indebtedness (the "New Debt")
of up to $25 million to refinance the Pleasants County, West
Virginia's tax exempt revenue bonds (the "County Bonds"), all
pursuant to the terms and conditions as set forth in the
Application and Exhibits, including the revised dividend rate
parameter which will not be more than 200 basis points above
yield to maturity on the US Treasury Bonds maturing in 30 years.
(4) The total of the Preferred Stock, the New Bonds, and the New
Debt (collectively the "Securities") to be issued and sold by
Applicant will not exceed $335 million.
(5) The New Bonds will have maturities of not more than 30 years.
The New Bonds will be issued under and secured by the Mortgage
Indenture, dated August 1, 1945 as supplemented and amended and
as to be further supplemented and amended by one or more
Supplemental Indentures.
(6) The proceeds from the Securities will be used to redeem its
Preferred Stock, refinance its outstanding First Mortgage Bonds,
and certain tax exempt revenue bonds, to pay or prepay debt, if
desirable, and for its other construction programs, all pursuant
to Section 4905.40, Revised Code.
(7) The proposed guidelines or parameters set forth in the
Application and Exhibits, including revision thereof, are
<PAGE>
Case No. 93-1822-EL-AIS
Page -2-
intended to facilitate the issuance of the Securities on the
best terms and at the lowest cost if the Securities are not sold
by competitive bidding. The authorization of the. sale of the
Securities within the guidelines set forth in the Application
and Exhibits, including the revision thereof, in no way relieves
the APPlicant of its obligation to negotiate and obtain the best
terms available.
(8) The maximum amount of the Securities, and their respective
probable costs, prices to Applicant, and other terms to be
determined either by competitive bidding or within the
parameters set forth in the Application and Exhibits, including
revision thereof, do not appear to be unjust or unreasonable.
(9) The effect on Applicant's revenue requirements resulting from
the issuance of the Securities can be determined only in rate
proceedings in which all factors affecting rates are taken into
account according to law.
(10) Based on information contained in the Application, the Exhibits
thereto, and other documentary information, including revision
thereof, to which the Commission has access, the purposes to
which the proceeds from the issue and sale of the Securities
shall be applied appear to be reasonably required by the
Applicant to meet its present and prospective obligations to
provide utility service and the Commission is satisfied that the
consent and authority should be granted.
It is, therefore,
ORDERED, That Applicant is authorized to issue and sell from time to
time, through December 31, 1994, up to: (a) 850,000 additional shares of
its Cumulative Preferred Stock $100 par value, or Market Auction Preferred
Stock, or a combination thereof, for a total cosh consideration of up to
$85 million; (b) up to $225 million aggregate principal amount of its
refunding First Mortgage Bonds, in one or more series; and (c) evidences
of indebtedness of up to $25 million to refinance the Pleasants County,
West Virginia's tax exempt revenue bonds, all pursuant to the terms and
conditions as set forth in the Application and Exhibits, including the
revised dividend rate parameter. It is, further,
ORDERED, That the total of the Preferred Stock, the New Bonds, and
the New Debt to be issued and sold by Applicant shall not exceed $335
million. It is, further,
ORDERED, That the proceeds from the issuance of the Securities shall
be used for the purposes set forth in this Order and otherwise pursuant to
the provisions of Section 4905.40, Revised Code. It is, further,
<PAGE>
Case No. 93-1822-EL-AIS
Page -3-
ORDERED, That after any of the Securities authorized by this Order
are issued and sold, the Applicant shall report to this Commission the
terms and full particulars regarding each sale of the Securities. In lieu
of above, Applicant may submit a copy of each prospectus as filed with the
Securities and Exchange Commission setting forth such information. It is,
further,
ORDERED, That Applicant shall account for the Securities as
prescribed by the Federal Energy Regulatory Commission Uniform Systems of
Accounts as currently in effect. It is, further,
ORDERED, That nothing in this Order shall be construed to imply any
guaranty or obligation by the Commission to assure the completion of any
specific construction project of the Applicant. it is, further,
ORDERED, That nothing in this Order shall be deemed to be binding on
the Commission in any future proceeding or investigation involving the
justness or reasonableness of any rate, charge, rule or regulation of the
Applicant. It is, further,
ORDERED, That nothing in this Order shall be construed to imply any
guaranty, obligation or endorsement of the Securities, or the associated
dividend or interest thereon, on the part of the State of Ohio. It is,
further,
ORDERED, That a copy of this Order be served upon all parties of
record.
THE PUBLIC UTILITIES COMMISSION OF OHIO
CRAIG A. GLAZER
Craig A. Glazer, Chairman
J. MICHAEL BIDDISON JOLYNN BARRY BUTLER
J. Michael Biddison Jolynn Barry Butler
DAVID W. JOHNSON
Richard M. Fanelly David W. Johnson
AKA:cr
Entered in the Journal
Feb 03 1994
A True Copy
GARY E. VIGORITO
Gary E. Vigorito
Secretary
PENNSYLVANIA
PUBLIC UTILITY COMMISSION
Harrisburg, PA 17105-3265
Public Meeting held December 2, 1993
Commissioners Present:
David W. Rolka, Chairman
Joseph Rhodes, Jr., Vice-Chairman
John M. Quain
Lisa Crutchfield
John Hanger
Securities Certificate of West Penn Power S-930395
Company for the issuance of notes, not to
exceed the aggregate principal amount of
$43,035,000, in support of tax-exempt Bonds
OPINION AND ORDER
BY THE COMMISSION:
On November 5, 1993, West Penn Power Company (West
Penn) filed for registration pursuant to Chapter 19 of
the Pennsylvania Public Utility Code, 66 Pa. C.S. Section
1901, et seq., a securities certificate for the issuance
of Notes, not to exceed the aggregate principal amount of
$43,035,000 in support of tax-exempt bonds (Bonds).
The Notes will be issued concurrently with the
issuance of up to $11.535 million of tax-exempt solid
waste disposal revenue bonds (Revenue Bonds) to be issued
by the County Commission of Harrison County, West
Virginia, and $31. 5 million of tax-exempt pollution
control refunding bonds (Refunding Bonds) to be issued by
Pleasants County, West Virginia.
The Bonds will be sold in one or more series
throughout 1994, with principal amounts, interest rates,
prices, and other terms being approved by West Penn.
Redemption provisions may include a special right of the
holder to require redemption or repurchase of the Bonds
at stated intervals. Concurrently with the issuance of
the Bonds, West Penn will issue Notes that correspond
with the terms of the Bonds. Market conditions at the
time of the offering may warrant the issuance of the
Notes and Bonds with floating interest rates during all
or a stated portion of the life of the issuance.
<PAGE>
The proceeds from the Revenue Bonds will be used by
West Penn to fund its ownership share of certain solid
waste handling and disposal facilities which are required
at the Harrison Power Station in West Virginia for
compliance with Phase I of the Clean Air Act Amendments
of 1990. The proceeds from the Refunding Bonds will be
used by West Penn for the optional redemption of $31.5
million of Pleasant County non-revenue producing
pollution control bonds.
After examination of the filing, the Commission has
determined that the proposed issuance appears to be
necessary or proper for the present and probable future
capital needs of the utility, and that the securities
certificate should be registered; THEREFORE,
IT IS ORDERED:
1. That the securities certificate of West Penn
Power Company for the issuance of Notes, not to exceed
the principal amount of $43,035,000 in support of
tax-exempt bonds, is hereby registered.
2. That West Penn Power Company file with this
Commission within 60 days after completion of the
issuance described in Ordering Paragraph No. 1, above, a
statement setting forth the: (a) the date of issuance and
maturity date; (b) the amount of proceeds received; and
(c) the interest rate of the securities issued.
BY THE COMMISSION,
/s/ John G. Alford
Secretary
[ SEAL ]
ORDER ADOPTED: December 2, 1993
ORDER ENTERED: December 2, 1993
Exhibit D-9(a)
COMMONWEALTH OF VIRGINIA
STATE CORPORATION COMMISSION
AT RICHMOND, DECEMBER 21, 1993
APPLICATION OF
THE POTOMAC EDISON
CASE NO. PUF930061
For authority to refinance certain
debt and preferred stock
ORDER GRANTING AUTHORITY
On December 2, 1993, The Potomac Edison Company ("Applicant" or
"Company") filed an application under Chapter 3 of Title 56 of the Code of
Virginia requesting authority to refinance certain debt and preferred
stock issues prior to maturity. Applicant paid the requisite fee of $250.
Applicant has filed with the Securities and Exchange Commission
(SEC) pursuant to Rule 415 ("shelf registration") for authority to issue
$195 000 000 of first mortgage bonds and $15 000 000 of preferred stock in
one or more series. Applicant also proposes to refinance $21 000 000 of
pollution control bonds with the Pleasant County Commission of West
Virginia. Applicant proposes to redeem the following high coupon issues:
the 9-1/4% Series due 2019, the 9-5/8% Series due in 2020, the 8-7/8%
Series due 2021, and the Pleasant County 7.30% Series B. Applicant also
proposes to issue preferred stock to redeem the $8.32 Series F and $8.00
Series G currently outstanding. Applicant states that the securities will
be issued only when market conditions exist that will result in cost
savings after considering the costs of the new issue. The expected
maturity of the bonds will be up to thirty (30) years, and the preferred
stock may be perpetual or have a fixed maturity. Interest rates and
dividend rates will be determined at the time of issuance and will be
market based.
THE COMMISSION, upon consideration of the application and
representations of Applicant, and having been advised by its Staff, is of
the opinion that approval of the described financing will not be
detrimental to the public interest. Accordingly,
<PAGE>
IT IS ORDERED:
1) That Applicant hereby is authorized to issue up to $195 000 000
in first mortgage bonds, up to $21 000 000 in pollution control bonds, and
up to $15 000 000 in preferred stock, between January 1, 1994 and
December 31, 1995, under the terms and conditions and for the purposes as
set forth in the application;
2) That Applicant shall file on or before January 31, 1994, a copy
of the Registration Statements and Exhibits filed with the SEC;
3) That Applicant shall submit a preliminary Report of Action
within seven days after the issuance of any securities pursuant to this
Order to include the date(s) of issue, amount of issue, type of security,
interest rate, comparable Treasury yield, date of maturity, underwriters'
names, and net proceeds to Applicant;
4) That within sixty days after the end of each calendar quarter in
which any securities are issued, Applicant will file a detailed Report of
Action containing the following: a detailed analysis of the savings due to
the new issue, showing the effective cost rate (annual yield to maturity
method) of the redeemed issue compared to the new issue, the date(s) of
issue, amount issued, coupon interest rate, comparable Treasury yield,
sinking fund schedule, date of maturity, any redemption or call
provisions, underwriters' names, underwriters' fees, a detailed account of
all issuance expenses to date, net proceeds to Applicant, and remaining
unissued authority;
5) That Applicant shall file a final report of action on or before
March 15, 1996, containing the information required in ordering
paragraph (4);
6) That this matter shall be continued, subject to the continuing
review, audit and appropriate directive of the Commission.
AN ATTESTED COPY hereof shall be sent to Applicant care of, Philip
J. Bray, Esquire, The Potomac Edison Company, 10435 Downsville Pike,
Hagerstown, MD 21740-1766, and to the Division of Economics and Finance
of the Commission.
A True Copy WILLIAM J. BRIDGE
Teste: WILLIAM J. BRIDGE
Clerk of the
State Corporation Commission
