File No. 70-9627
(Potomac Edison Asset Transfer)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 5
FORM U-1
APPLICATION/DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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Allegheny Energy, Inc. Allegheny Energy Supply Company
10435 Downsville Pike R.R. 12, P.O. Box 1000
Hagerstown, Maryland 21740 Roseytown, Penna. 15601
The Potomac Edison Company Allegheny Energy Service Company
(d/b/a Allegheny Power) 10435 Downsville Pike
10435 Downsville Pike Hagerstown, Maryland 21740
Hagerstown, Maryland 21740
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Allegheny Energy, Inc.
10435 Downsville Pike
Hagerstown, Maryland 21740
The Commission is requested to send copies of all notices, orders and
communications in connection with this Application / Declaration to:
Thomas K. Henderson, Esq.
Vice President and General Counsel
Allegheny Energy, Inc.
10435 Downsville Pike
Hagerstown, MD 21740
Robert Winter, Esq. Patricia J. Clark, Esq. Terence Burke, Esq.
Deputy General Counsel Deputy General Counsel Deputy General Counsel
Allegheny Power Allegheny Energy Supply Company Allegheny Ventures, Inc.
800 Cabin Hill Drive R.R. 12, P.O. Box 1000 10435 Downsville Pike
Greensburg, PA 15601 Roseytown, PA 15601 Hagerstown, MD 21740
Anthony Wilson, Esq.
Senior Attorney
Allegheny Energy Service Company
10435 Downsville Pike
Hagerstown, MD 21740
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ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
A. Exhibits
A-1 Certificate of Organization of Subsidiaries (filed July 27,
2000).
B-1 Fort Martin Unit No. 2 Construction and Operating Agreement,
dated December 30, 1965, between Monongahela, Potomac Edison, and
Potomac Edison (incorporated by reference to File No. 70-9483).
B-2 Pleasants Power Station Construction and Operating Agreement,
dated as of September 15, 1977, between Monongahela, Potomac
Edison and West Penn (incorporated by reference to File No.
70-9483 )
B-3 Hatfield's Ferry Power Station Construction and Operating
Agreement, dated April 20, 1968, between Monongahela, Potomac
Edison and West Penn (incorporated by reference to File No.
70-9483).
B-4 Harrison Power Station Construction and Operating Agreement,
Dated as of March 31, 1971, between Monongahela, Potomac Edison
and West Penn (incorporated by reference File No. 70-9483)
B-5 Form of Assignment of each Joint-Owner Operating Agreement (filed
July 27, 2000).
B-6 Form of Proposed Operating Agreement between Potomac Edison and
GENCO (filed July 27, 2000).
B-8 Inter-Company Power Agreement between Ohio Valley Electric
Corporation, Potomac Edison and the other parties thereto, dated
July 10, 1953, as modified (incorporated by reference File No.
70-9483)
B-9 Equity Agreement between Monongahela, Potomac Edison and West
Penn, dated June 17, 1981, as amended (incorporated by reference
File No. 70-9483)
B-10 APS Power Agreement between, Monongahela, Potomac Edison, West
Penn, and, AGC, dated August 24, 1981 ( incorporated by reference
File No. 70-9483)
B-11 Form of Service Agreement to be entered into between AESC and PE
Transferring Agent LLC. (filed July 27, 2000).
D-1 Application of Potomac Edison to Maryland PSC
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D-2 Order of Maryland PSC Approving Plan (filed July 27, 2000).
D-2A Settlement Order of Maryland PSC (filed July 28, 2000).
D-2B Virginia MOU (Replacement) (filed July 27, 2000).
D-2B(1) Order of West Virginia PSC (filed July 27, 2000).
D-3 Application of Potomac Edison to Virginia Corp. Commission
D-4 Order of Virginia Corporation Commission Approving Plan (filed
July 27, 2000).
D-5 Approval of FERC regarding Transfer of Hydro Generating
Facilities (filed July 27, 2000).
D-6 Approval by FERC regarding Transfer of Shares of AGC from Potomac
Edison to PE Transferring Agent LLC
D-7 Approval by FERC of transfer of Potomac Edison's rights under
the OVEC Agreement to PE GENCO.
F Opinion of Counsel (filed July 27, 2000).
FS-1 Allegheny Energy, Inc.'s Financial Statements (filed July 27,
2000)
FS-2 Potomac Edison's Financial Statements (filed July 27, 2000)
FS-1(a) Allegheny Energy, Inc., consolidated capital ratios actual and
pro forma (filed confidentially via Form SE)
FS-2(a) Potomac Edison capital ratios per books and pro forma (filed
confidentially via Form SE)
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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.
ALLEGHENY ENERGY, INC.
Terence A. Burke
POTOMAC EDISON POWER COMPANY
Terence A. Burke
ALLEGHENY ENERGY SUPPLY COMPANY
Terence A. Burke
ALLEGHENY ENERGY SERVICE COMPANY
Terence A. Burke
Dated: July 28, 2000
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D-2A Settlement Order of Maryland PSC
ORDER NO. 75851
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IN THE MATTER OF THE POTOMAC * BEFORE THE
EDISON COMPANY'S PROPOSED: PUBLIC SERVICE COMMISSION
(A) STRANDED COST QUANTIFICA- * OF MARYLAND
TION MECHANISM; (B) PRICE _______________
PROTECTION MECHANISM; *
AND (C) UNBUNDLED RATES. CASE NO. 8797
___________________________ * _______________
On July 1, 1998, The Potomac Edison Company ("PE" or "Company") filed
for approval of certain transition costs and pricing mechanisms as the Company
prepares to enter a competitive electric marketplace. This filing was in
response to Public Service Commission ("Commission") Order No. 73834 that
directed the four investor-owner electric companies in the State to submit their
restructuring plans. The Company filed supplemental direct testimony on December
28, 1998. The parties filed direct testimony in January, 1999 and rebuttal
testimony in March, 1999.
On April 16, 1999, the Commission Staff ("Staff") filed a letter
requesting that the procedural schedule be suspended because a majority of the
active parties had reached a consensus for resolution of the issues in this
case. The Commission granted Staff's request by letter order dated April 16,
1999 to permit the parties time to resolve the details and memorialize an
agreement. On July 9, 1999, the Commission directed the parties to file either a
written final settlement agreement or supplemental testimony by August 20, 1999.
Several subsequent extensions of time were requested by the parties and granted.
On September 23, 1999, a consensus Settlement Agreement was filed with
the Commission. The Settling Parties include PE, Staff, the Maryland Office of
People's Counsel ("OPC"), the Maryland Energy Administration and the Power Plant
Research Program of the Maryland Department of Natural Resources ("MEA/DNR"),
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the Maryland Retailers Association ("MRA"), the U.S. Department of Defense and
other Federal Executive Agencies ("DOD"), the Mid-Atlantic Power Supply
Association ("MAPSA"), Enron Energy Services, Inc. and Statoil Energy, Inc. On
October 4, 1999, PE filed unbundled rates as required by the Settlement
Agreement.1 On October 5, 1999, Staff, OPC and PE filed testimony in support of
the Settlement. On the same day, MEA/DNR, MAPSA and MRA filed comments in
support of the Settlement. Eastalco filed a letter noting that it neither
supports nor opposes the Settlement. An evidentiary hearing was held on October
14, 1999. An evening public hearing was held in Hagerstown, Maryland on October
18, 1999.
The Commission has thoroughly analyzed the Settlement, the record in
this proceeding and the recently enacted Electric Customer Choice and
Competition Act of 1999 ("1999 Act"). The Commission finds that the Settlement
provides for a sensible transition to a competitive electric generation market
with appropriate customer safeguards, represents a reasonable accommodation
among parties with adverse interests, and overall is equally protective of
ratepayers. The Commission concludes that the Settlement is not inconsistent
with its policies and the 1999 Act and comports with the outcomes envisioned
therein. Therefore, the Commission finds that the Settlement Agreement is in the
public interest and hereby approves the Settlement. A supplemental order setting
forth the Commission's specific findings and reasoning for approving the
Settlement will be issued shortly.
The Commission stresses that it is the existence of a unique set of
circumstances which leads the Commission to take this unusual step of issuing a
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1 "Unbundled rates" mean the specific rates for various electric services that
formerly were "bundled" together into one rate. Examples of the services whose
rates formerly were bundled but now will be unbundled, and shown separately on
customers' bills, include rates for electric generation, transmission and
distribution services.
<PAGE>
bifurcated order. First and foremost, the Settlement presented in this
proceeding is a consensus Settlement. No party objects to the Commission's
approval of this Settlement. While the Commission will analyze certain
provisions of the Settlement in detail in the supplemental order, that analysis
will not contradict the uncontested Settlement provisions proposed by the
parties, nor the conclusions reached herein.
Second, because under the Settlement customer choice begins July 1,
2000, time is of the essence. The Settlement at issue here was the last of four
settlements filed with the Commission. Under the terms of the Settlement, all
customers will have customer choice beginning July 1, 2000, except for customers
with certain individual contracts. The Settlement further provides that
competitive billing will also begin on July 1, 2000. The Commission's immediate
approval of the Settlement will facilitate the parties' ability to begin
offering choice and competitive billing on that date. In addition, there remains
a variety of actions which must be accomplished including consumer education,
and issues of technical implementation and preparation by competitive suppliers,
to enable those suppliers to offer supply and billing options to consumers.
Thus, prompt action on the Settlement is necessary in order for the customers in
PE's service territory to fully benefit from the availability of customer choice
on July 1, 2000.
The fact that no party protests the approval of this Settlement, that
the Company and other parties must have sufficient time to prepare for the
advent of customer choice and competitive billing and that the Commission
determines the Settlement to be in the public interest, allows the Commission to
approve the Settlement, using this expedited, bifurcated process.
IT IS, THEREFORE, this 23rd day of December in the year Nineteen
Hundred and Ninety-nine, by the Public Service Commission of Maryland,
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ORDERED: The Settlement Agreement filed on September 23, 1999 and the
unbundled rates filed on October 4, 1999 are hereby approved.
/s/ Glenn F. Ivey
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/s/ Claude M. Ligon
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/s/ Susanne Brogan
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/s/ Catherine I. Riley
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/s/ J. Joseph Curran III
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Commissioners
