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
Vice President
Allegheny Power System, Inc.
Tower Forty-Nine
12 East 49th Street
New York, NY 10017
(Name and address of agent for service)
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1. Description of Proposed Transaction.
The proposed transactions involve the optional redemption of all
of the shares of preferred stock of certain series by Monongahela Power
Company (Monongahela), The Potomac Edison Company (Potomac Edison) and West
Penn Power Company (West Penn) (collectively, the "Applicants") as follows:
Current
Optional Date
Number Redemp- Price
Dividend of Par tion Appli-
Company Series Rate Shares Value Price cable
Monongahela G $8.80 50,000 $100 $104.20 After
5/1/86
Monongahela H $7.92 50,000 $100 $103.52 After
4/1/87
Monongahela I $7.92 100,000 $100 $103.52 After
11/1/88
Monongahela J $8.60 150,000 $100 $103.33 After
12/1/91
Potomac Edison F $8.32 50,000 $100 $103.54 After
5/1/86
Potomac Edison G $8.00 100,000 $100 $103.25 After
5/1/87
West Penn G $8.08 100,000 $100 $103.27 After
7/1/86
West Penn H $7.60 100,000 $100 $103.23 After
6/1/87
West Penn I $7.64 100,000 $100 $103.16 After
11/1/88
West Penn J $8.20 200,000 $100 $103.30 After
12/1/91
Applicants request authority through December 31, 1996 to redeem the foregoing
series of preferred stock.
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The optional redemption of the above-described securities will be
undertaken only if advantageous to the respective customers and shareholders
of each Applicant by reducing the cost of their respective outstanding series
of preferred stock. The Applicants would effect such redemptions by issuing
new preferred stock with a lower dividend rate. Applicants will not enter
into the proposed refunding transactions unless, in each instance, the
estimated present value savings derived from the net difference between
interest payments on the new issue of comparable securities and on the
securities to be refunded is, on an after tax basis, greater than the present
value of all redemption and issuing costs, assuming an appropriate discount
rate. The discount rate used shall be the estimated after tax interest rate
on the securities to be issued.
As noted in the table above, at the present time each series of
preferred stock is eligible for optional redemption at specified premiums over
their respective par value. The Potomac Edison preferred stock is eligible
for optional redemption pursuant to Sections 7 and 8 of Article VI of the
Potomac Edison charter. The Monongahela preferred stock is eligible for
optional redemption pursuant to Sections 1.5(8), 1.5(4)D, 1.5(4)E, 1.5(4)F,
and 1.5(4)G of Monongahela's charter. The West Penn preferred stock is
eligible for optional redemption pursuant to Sections 5.14(G), 5.14(H),
5.14(I) and 5.14(J) of West Penn's charter.
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2. Fees, Commissions and Expenses
None, other than (i) ordinary expenses not over $500 in connection
with the preparation of this Application or Declaration, and (ii) the $2,000
filing fee for this Application or Declaration.
3. Applicable Statutory Provisions
Applicants are advised that Sections 9(a), 10 and 12(c) and Rule
42 promulgated under the Act are or may be applicable to the proposed
transactions.
4. Regulatory Approval
No commission other than the Securities and Exchange Commission
has jurisdiction over the proposed transactions.
5. Procedure
It is requested that the Commission's order granting this
Application or Declaration be issued as soon as possible. There should be no
recommended decision by a hearing or other responsible officer of the
Commission and no 30-day waiting period between the issuance of the
Commission's order and its effective date. Applicants consent to the Division
of Corporate Regulation's assisting in the preparation of the Commission's
decision and order in this matter, unless the Division opposes the
transactions covered by this Application or Declaration.
<PAGE>
6. Exhibits and Financial Statements
(a) Exhibits
A-E Not applicable
F Opinion of Nancy H. Gormley, Esquire
H Form of Notice
(b) Financial Statements are not deemed relevant or necessary
for a proper disposition of the proposed transactions by the
Commission and are omitted.
7. Information as to Environmental Effects
(a) For the reasons set forth in Item 1 above, the authorization
applied for herein does not require major federal action
significantly affecting the quality of the human environment
for purposes of Section 102(2)(C) of the National
Environmental Policy Act (42 U.S.C. 4232(2)(C)).
(b) Not applicable.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company
Act of 1935, each of the undersigned companies has duly caused this statement
to be signed on its behalf by the undersigned thereunto duly authorized.
MONONGAHELA POWER COMPANY
THE POTOMAC EDISON COMPANY
WEST PENN POWER COMPANY
By: NANCY H. GORMLEY
Nancy H. Gormley
Counsel
Dated: February 2, 1994
EXHIBIT F
February 2, 1994
Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
Referring to the Application or Declaration on Form U-1
contemporaneously filed by Monongahela Power Company (Monongahela), The
Potomac Edison Company (Potomac Edison) and West Penn Power Company (West
Penn) under the Public Utility Holding Company Act of 1935 with respect to the
proposed preferred stock redemption programs for Monongahela, Potomac Edison
and West Penn, all as described in the joint Application or Declaration of
which this Opinion is a part, I have examined such documents and questions of
law as I deemed necessary to enable me to render this opinion.
I understand that the actions taken in connection with the
proposed redemptions of preferred stock will be in accordance with the
Application or Declaration; that all amendments necessary to complete the
above-mentioned Application or Declaration will be filed with the Commission;
and that all other necessary corporate action by the Boards of Directors and
officers of Monongahela, Potomac Edison and West Penn in connection with the
redemption programs has been or will be taken prior thereto.
Based upon the foregoing, I am of the opinion that
(1) Monongahela, Potomac Edison and West Penn are validly organized
and duly existing corporations; and
(2) if the said joint Application or Declaration is permitted to
become effective and the proposed transactions are consummated in
accordance therewith: (a) all state laws applicable to the
proposed transactions will have been complied with; (b)
Monongahela, Potomac Edison and West Penn will legally acquire the
preferred stock as set forth in the Application or Declaration;
and (c) the consummation of the proposed transactions will not
violate the legal rights of the holders of any of the securities
issued by Monongahela, Potomac Edison or West Penn or by any
associate or affiliate company or any of them.
This opinion does not relate to State Blue Sky or securities laws.
<PAGE>
I consent to the use of this Opinion as part of the joint
Application or Declaration to which it is appended, which is to be filed by
Monongahela, Potomac Edison and West Penn.
Very truly yours,
NANCY H. GORMLEY
Nancy H. Gormley
Counsel for
MONONGAHELA POWER COMPANY
THE POTOMAC EDISON COMPANY
WEST PENN POWER COMPANY
EXHIBIT H
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- : )
Monongahela Power Company, et al.
Monongahela Power Company (Monongahela) 1310 Fairmont Avenue,
Fairmont, WV 26554, The Potomac Edison Company (Potomac Edison) 10435
Downsville Pike, Hagerstown, MD 21740-1766 and West Penn Power Company (West
Penn) 800 Cabin Hill Drive, Greensburg, PA 15601, wholly-owned subsidiaries
of Allegheny Power System, Inc., a registered public utility holding company,
(collectively, the "Applicants") have filed a joint Application or Declaration
pursuant to Sections 9(a), 10 and 12(c) of the Public Utility Holding Company
Act of 1935 and Rule 42 thereunder.
The Applicants request authority through December 31, 1996 to
effect the optional redemption of all of the shares of preferred stock of
certain series. The series proposed to be redeemed are as follows:
Current
Optional Date
Number Redemp- Price
Dividend of Par tion Appli-
Company Series Rate Shares Value Price cable
Monongahela G $8.80 50,000 $100 $104.20 After
5/1/86
Monongahela H $7.92 50,000 $100 $103.52 After
4/1/87
Monongahela I $7.92 100,000 $100 $103.52 After
11/1/88
Monongahela J $8.60 150,000 $100 $103.33 After
12/1/91
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Potomac Edison F $8.32 50,000 $100 $103.54 After
5/1/86
Potomac Edison G $8.00 100,000 $100 $103.25 After
5/1/87
West Penn G $8.08 100,000 $100 $103.27 After
7/1/86
West Penn H $7.60 100,000 $100 $103.23 After
6/1/87
West Penn I $7.64 100,000 $100 $103.16 After
11/1/88
West Penn J $8.20 200,000 $100 $103.30 After
12/1/91
The optional redemption of the above-described securities will be
undertaken only if advantageous to the respective customers and shareholders
of each Applicant by reducing the cost of their respective outstanding series
of preferred stock. The Applicants would effect such redemptions by issuing
new preferred stock with a lower dividend rate. Applicants will not enter
into the proposed refunding transactions unless, in each instance, the
estimated present value savings derived from the net difference between
interest payments on the new issue of comparable securities and on the
securities to be refunded is, on an after tax basis, greater than the present
value of all redemption and issuing costs, assuming an appropriate discount
rate. The discount rate used shall be the estimated after tax interest rate
on the securities to be issued.
As noted in the table above, at the present time each series of
preferred stock is eligible for optional redemption at specified premiums over
their respective par value. The Potomac Edison preferred stock is eligible
for optional redemption pursuant to Sections 7 and 8 of Article VI of the
Potomac Edison charter. The Monongahela preferred stock is eligible for
optional redemption pursuant to Sections 1.5(8), 1.5(4)D, 1.5(4)E, 1.5(4)F and
<PAGE>
1.5(4)G of Monongahela's charter. The West Penn preferred stock is eligible
for optional redemption pursuant to Sections 5.14(G), 5.14(H), 5.14(I) and
5.14(J) of West Penn's charter.
Except as described herein, no associate company or affiliate of
the Applicants or any affiliate of any such associate company has any material
interest, directly or indirectly in the proposed transactions.
This application and any amendments thereto are available for
public inspection through the Commission's Office of Public Reference.
Interested persons wishing to comment or request a hearing should submit their
views in writing by , 1994, to the Secretary, Securities and
Exchange Commission, Washington, DC 20549, and serve a copy on the Applicants
at the address specified above. Proof of service (by affidavit or, in case of
an attorney at law, by certificate) should be filed with the request. Any
request for a hearing shall identify specifically the issues of fact or law
that are disputed. A person who so requests will be notified of any hearing,
if ordered, and will receive a copy of any notice or order issued in this
matter. After said date, the application, as filed or as it may be amended,
may be granted.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
