EXHIBIT D-9
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Allegheny Energy Unit 1 and Unit 2, L.L.C. and Docket No. EC00-123-00
Allegheny Energy Supply Company, LLC
ORDER AUTHORIZING DISPOSITION
OF JURISDICTIONAL FACILITIES
(Issued November 8, 2000)
On August 14, 2000, as supplemented on September 14,
2000, Allegheny Energy Unit 1 and Unit 2, L.L.C. (Unit 1 and
Unit 2) and Allegheny Energy Supply Company, LLC (AE Supply)
(collectively, Applicants) filed a joint application
pursuant to section 203 of the Federal Power Act (FPA)<F1>
requesting Commission authorization for the intra-corporate
transfer of jurisdictional facilities from Unit 1 and Unit 2
to AE Supply. Unit 1 and Unit 2 proposes to transfer its
two generating units and associated transmission facilities
to AE Supply as part of an intra-corporate restructuring in
which Unit 1 and Unit 2 will become part of AE Supply.
Unit 1 and Unit 2 owns two 44-MW combustion turbine
generation units near Springdale, Pennsylvania, the entire
output of which is sold to AE Supply pursuant to a market-
based rate schedule on file with the Commission.<F2> AE Supply
owns and operates electric generation facilities, and
markets power in wholesale and retail markets. Both Unit 1
and Unit 2 and AE Supply are wholly-owned subsidiaries of
Allegheny Energy, Inc. (Allegheny Energy), a public utility
holding company regulated under the Public Utility Holding
Company Act of 1935, and each has been authorized by the
Commission to engage in power sales at market-based rates.<F3>
Neither Unit 1 and Unit 2 nor AE Supply has a franchised
service territory.
As part of an effort to consolidate all of the
generating facilities owned by subsidiaries of Allegheny
Energy into AE Supply, Unit 1 and Unit 2 proposes to
transfer to AE Supply its two 44-MW generating facilities
and associated transmission facilities
_______________________________
<F1> 16 U.S.C. 824b (1994).
<F2> The Commission accepted for filing Unit 1 and Unit 2's
service agreement with AE Supply under its market-based rate
sales tariff by unpublished letter order dated August 10,
2000, in AEP Operating Companies, et al., Docket No. ER00-
2931-000, et al.
<F3> See, Allegheny Energy Unit 1 and Unit 2, L.L.C., et al.,
89 FERC 61,272 (1999); and Allegheny Energy Supply
Company, 88 FERC 61,303 (1999).
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Docket No. EC00-123-000 2
(i.e., a 138 kV substation, including step-up transformers,
breakers and interconnection facilities). As a result of
the transaction, the corporate existence of Unit 1 and Unit
2 will cease and AE Supply will be the surviving company.
According to the application, AE Supply will assume the
outstanding debt of Unit 1 and Unit 2 in exchange for Unit 1
and Unit 2's generation and transmission facilities.
Applicants state that the proposed transaction is
consistent with the public interest and will not have an
adverse effect on competition, rates or regulation. With
respect to competition, Applicants state that the proposed
transaction will have no adverse affect on competition
because the intra-corporate transfer of generation assets
from Unit 1 and Unit 2 to its affiliate, AE Supply, will not
result in a change in generation market concentration
levels. With regard to rates, Applicants state that the
proposed transaction will not have an adverse affect on
rates because Unit 1 and Unit 2's only customer is the
prospective recipient of the transferred assets, AE Supply.
Applicants state that other than obviating the service
agreement between Unit 1 and Unit 2 and AE Supply, currently
the only customer of Unit 1 and Unit 2, the proposed
transfer will have no impact upon any contact for the
purchase, sale, or interchange of electric energy in
interstate commerce. With respect to regulation, Applicants
state that although Unit 1 and Unit 2 will cease to exist as
a result of the proposed transaction, AE Supply's wholesale
transactions will continue to be subject to the jurisdiction
of the Commission, and its retail services will continue to
be subject to the jurisdiction of the applicable state
regulatory commissions. Therefore, Applicants claim that
the proposed transaction will not adversely affect
regulation.
Notices of the application and the supplement were
published in the Federal Register with comments due on or
before October 5, 2000. No comments were received.
After consideration, it is concluded that the proposed
transaction is consistent with the public interest and is
hereby authorized, subject to the following conditions:
(1) The proposed transaction is authorized upon the terms
and conditions and for the purposes set forth in the
application;
(2) The foregoing authorization is without prejudice to the
authority of the Commission or any other regulatory body
with respect to rates, service, accounts, valuation,
estimates or determinations of costs, or any other matter
whatsoever now pending or which may come before the
Commission;
(3) Nothing in this order shall be construed to imply
acquiescence in any estimate or determination of cost or any
valuation of property claimed or asserted;
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Docket No. EC00-123-000 3
(4) The Commission retains authority under sections 203(b)
and 309 of the FPA to issue supplemental orders as
appropriate; and
(5) Applicants shall promptly notify the Commission of the
date the disposition of jurisdictional facilities is
consummated.
Authority to act on this matter is delegated to the
Director, Division of Corporate Applications, pursuant
to 18 C.F.R. 375.307. This order constitutes final
agency action. Requests for rehearing by the
Commission may be filed within thirty (30) days of the
date of issuance of this order, pursuant to 18 C.F.R.
385.713.
Michael C. McLaughlin, Director
Division of Corporate Applications
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