OMB Approval
OMB 3235-0153
Expires Nov 30, 1984
Form U-13-60
Mutual and Subsidiary Service Companies
Revised February 7, 1980
ANNUAL REPORT
FOR THE PERIOD
Beginning January 1, 1999 and Ending December 31, 1999
TO THE
U. S. SECURITIES AND EXCHANGE COMMISSION
OF
Allegheny Energy Service Corporation
(Exact Name of Reporting Company)
A Subsidiary Service Company
("Mutual" or "Subsidiary")
Date of Incorporation November 22, 1963.
If not Incorporated, Date of Organization N/A
State or Sovereign Power under which Incorporated or Organized Maryland
10435 Downsville Pike
Location of Principal Executive Offices of Reporting Company Hagerstown,MD
21740-1766
Name, title, and address of officer to whom correspondence concerning this
report should be addressed :
10435 Downsville Pike
Thomas J. Kloc, VP & Controller Hagerstown, MD 21740-1766
(Name) (Title) (Address)
Name of Principal Holding Company Whose Subsidiaries are served by Reporting
Company :
Allegheny Energy, Inc.
SEC 1926 (6-82)
<PAGE>
1
INSTRUCTIONS FOR USE OF FORM U-13-60
1. Time of Filing. Rule 94 provides that on or before the
first day of May in each calendar year, each mutual service
company and each subsidiary service company as to which the
Commission shall have made a favorable finding pursuant to
Rule 88, and every service company whose application for
approval or declaration pursuant to Rule 88 is pending shall
file with the Commission an annual report on Form U-13-60
and in accordance with the Instructions for that form.
2. Number of Copies. Each annual report shall be filed in
duplicate. The company should prepare and retain at least
one extra copy for itself in case correspondence with
reference to the report become necessary.
3. Period Covered by Report. The first report filed by any
company shall cover the period from the date the Uniform
System of Accounts was required to be made effective as to
that company under Rules 82 and 93 to the end of that
calendar year. Subsequent reports should cover a calendar
year.
4. Report Format. Reports shall be submitted on the forms pre
pared by the Commission. If the space provided on any sheet
of such form is inadequate, additional sheets may be
inserted of the same size as a sheet of the form or folded
to such size.
5. Money Amounts Displayed. All money amounts required to be
shown in financial statements may be expressed in whole dollars,
in thousands of dollars or in hundred thousands of dollars, as
appropriate and subject to provisions of Regulation S-X ('210.3-
01(b)).
6. Deficits Displayed. Deficits and other like entries shall
be indicated by the use of either brackets or a parenthesis with
corresponding reference in footnotes. (Regulation S-X, '210.3-
01(c))
7. Major Amendments or Corrections. Any company desiring to
amend or correct a major omission or error in a report after it
has been filed with the Commission shall submit an amended report
including only those pages, schedules, and entries that are to be
amended or corrected. A cover letter shall be submitted
requesting the Commission to incorporate the amended report
changes and shall be signed by a duly authorized officer of the
company.
8. Definitions. Definitions contained in Instruction 01-8 to
the Uniform System of Accounts for Mutual Service Companies and
Subsidiary Service Companies, Public Utility Holding Company Act
of 1935, as amended February 2, 1979 shall be applicable to words
or terms used specifically within this Form U-13-60.
9. Organization Chart. The service company shall submit with
each annual report a copy of its current organization chart.
10. Methods of Allocation. The service company shall submit
with each annual report a listing of the currently effective
methods of allocation being used by the service company and
on file with the Securities and Exchange Commission pursuant
to the Public Utility Holding Company Act of 1935.
11. Annual Statement of Compensation for Use of Capital Billed.
The service company shall submit with each annual report a
copy of the annual statement supplied to each associate
company in support of the amount of compensation for use of
capital billed during the calendar year.
<PAGE>
2
LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS
SCHEDULE OR PAGE
DESCRIPTION OF SCHEDULES AND ACCOUNTS ACCT. NO. NO.
COMPARATIVE BALANCE SHEET Schedule I 4-5
Service Company Property Schedule II 6-7
Accumulated Provision for Depreciation and
Amortization of Service Company Property Schedule III 8
Investments Schedule IV 9
Accounts Receivable from Associate Companies Schedule V 10
Fuel Stock Expenses Undistributed Schedule VI 11
Stores Expense Undistributed Schedule VII 12
Miscellaneous Current and Accrued Assets Schedule VIII 13
Miscellaneous Deferred Debits Schedule IX 14
Research, Development, or Demonstration
Expenditures Schedule X 15
Proprietary Capital Schedule XI 16
Long-Term Debt Schedule XII 17
Current and Accrued Liabilities Schedule XIII 18
Notes to Financial Statements Schedule XIV 19
COMPARATIVE INCOME STATEMENT Schedule XV 20
Analysis of Billing - Associate Companies Account 457 21
Analysis of Billing - Nonassociate Companies Account 458 22
Analysis of Charges for Service - Associate
and Nonassociate Companies Schedule XVI 23
Schedule of Expense by Department or
Service Function Schedule XVII 24-25
Departmental Analysis of Salaries Account 920 26
Outside Services Employed Account 923 27
Employee Pensions and Benefits Account 926 28
General Advertising Expense Account 930.1 29
Miscellaneous General Expense Account 930.2 30
Rents Account 931 31
Taxes Other Than Income Taxes Account 408 32
Donations Account 426.1 33
Other Deductions Account 426.5 34
Notes to Statement of Income Schedule XVIII 35
<PAGE>
3
LISTING OF INSTRUCTIONAL FILING REQUIREMENTS
PAGE
DESCRIPTION OF REPORTS OR STATEMENTS NO.
ORGANIZATION CHART 36
METHODS OF ALLOCATION 37
ANNUAL STATEMENT OF COMPENSATION FOR USE
OF CAPITAL BILLED 38
<PAGE>
4
ANNUAL REPORT OF Allegheny Energy Service Corporation
SCHEDULE I - COMPARATIVE BALANCE SHEET
Give balance sheet of the Company as of December 31 of the current and
prior year.
<TABLE>
<CAPTION>
ACCOUNT ASSETS AND OTHER DEBITS AS OF DECEMBER 31
1999 1998
SERVICE COMPANY PROPERTY
<S> <C> <C>
101 Service company property (Schedule II) 6,491,732 2,713,072
107 Construction work in progress (Schedule II) 0 0
Total Property 6,491,732 2,713,072
108 Less accumulated provision for depreciation
and amortization of service company
property (Schedule III) 0 899,797
Net Service Company Property 6,491,732 1,813,275
INVESTMENTS
123 Investments in associate companies
(Schedule IV) 0 0
124 Other investments (Schedule IV) 0 81,412
Total Investments 0 81,412
CURRENT AND ACCRUED ASSETS
131 Cash 6,458 0
134 Special deposits 500,000 0
135 Working funds 159,429 101,891
136 Temporary cash investments (Schedule IV) 0 0
141 Notes receivable 0 0
143 Accounts receivable 1,709,171 2,556,846
144 Accumulated provision of uncollectible
accounts 0 0
146 Accounts receivable from associate
companies (Schedule V) 66,933,435 46,572,027
152 Fuel stock expenses undistributed (Schedule VI) 0 0
154 Materials and supplies 0 0
163 Stores expense undistributed (Schedule VII) 0 0
165 Prepayments 1,478,852 38,383
174 Miscellaneous current and accrued
assets (Schedule VIII) 0 0
Total Current and Accrued Assets 70,787,345 49,269,147
DEFERRED DEBITS
181 Unamortized debt expense 0 0
184 Clearing accounts 0 0
186 Miscellaneous deferred debits (Schedule IX) 28,464,318 1,115,743
188 Research, development, or demonstration
expenditures (Schedule X) 0 0
190 Accumulated deferred income taxes 10,707,322 13,279,511
Total Deferred Debits 39,171,640 14,395,254
TOTAL ASSETS AND OTHER DEBITS 116,450,717 65,559,088
</TABLE>
<PAGE>
5
ANNUAL REPORT OF Allegheny Energy Service Corporation
SCHEDULE I - COMPARATIVE BALANCE SHEET
<TABLE>
<CAPTION>
ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL AS OF DECEMBER 31
1999 1998
PROPRIETARY CAPITAL
<S> <C> <C>
201 Common stock issued (Schedule XI) 50,000 50,000
211 Miscellaneous paid-in capital (Schedule XI) 0 0
215 Appropriated retained earnings (Schedule XI) 0 0
216 Unappropriated retained earnings
(Schedule XI) 0 0
Total Proprietary Capital 50,000 50,000
LONG-TERM DEBT
223 Advances from associate
companies (Schedule XII) 0 0
224 Other long-term debt (Schedule XII) 0 0
225 Unamortized premium on long-term debt 0 0
226 Unamortized discount on long-term
debt-debit 0
227 Obligations under capital leases-noncurrent 258,637 152,099
Total Long-Term Debt 258,637 152,099
CURRENT AND ACCRUED LIABILITIES
231 Notes payable 0 0
232 Accounts payable 49,513,093 36,604,899
233 Notes payable to associate
companies (Schedule XIII) 0 0
234 Accounts payable to associate
companies (Schedule XIII) 6,710,920 53,395
236 Taxes accrued 151,047 1,490,695
237 Interest accrued 0 0
238 Dividends declared 0 0
241 Tax collections payable 3,201,396 5,469,376
242 Miscellaneous current and accrued
liabilities (Schedule XIII) 752,102 13,033,721
Total Current and Accrued Liabilities 60,328,558 56,652,086
DEFERRED CREDITS
253 Other deferred credits 55,813,522 8,704,903
255 Accumulated deferred investment tax credits 0 0
Total Deferred Credits 55,813,522 8,704,903
282 ACCUMULATED DEFERRED INCOME TAXES 0 0
TOTAL LIABILITIES AND PROPRIETARY CAPITAL 116,450,717 65,559,088
</TABLE>
<PAGE>
6
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE II - SERVICE COMPANY PROPERTY
BALANCE AT RETIRE- BALANCE
BEGINNING MENTS OTHER AT CLOSE
DESCRIPTION OF YEAR ADDITIONS OR SALES CHANGES1/ OF YEAR
SERVICE COMPANY PROPERTY
ACCOUNT
301 ORGANIZATION
303 MISCELLANEOUS
INTANGIBLE PLANT
304 LAND AND LAND
RIGHTS
305 STRUCTURES AND
IMPROVEMENTS
306 LEASEHOLD
IMPROVEMENTS 836,368 (836,368) 0
307 EQUIPMENT2/ 1,817,014 249,294 (3,739) (1,295,837) 766,732
308 OFFICE FURNITURE
AND EQUIPMENT 59,690 (59,690) 0
309 AUTOMOBILES, OTHER
VEHICLES AND
RELATED GARAGE
EQUIPMENT
310 AIRCRAFT AND
AIRPORT EQUIPMENT2/ 0 5,725,000 0 0 5,725,000
311 OTHER SERVICE
COMPANY PROPERTY
SUBTOTAL 2,713,072 5,974,294 (899,797) (1,295,837) 6,491,732
107 CONSTRUCTION WORK
IN PROGRESS
TOTAL 2,713,072 5,974,294 (899,797) (1,295,837) 6,491,732
1 / PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
All retirement amounts represent capitalized lease assets that were
transferred to Potomac Edison's general ledger due to the transferring
of Allegheny Eneryg,Inc.'s corporate headquarters to Hagerstown, MD.
Amortization of capitalized leases and adjustments.
<PAGE>
7
SCHEDULE II - CONTINUED
2/ SUBACCOUNTS ARE REQUIRED FOR EACH CLASS OF EQUIPMENT OWNED.
THE SERVICE COMPANY SHALL PROVIDE A LISTING BY SUBACCOUNT OF
EQUIPMENT ADDITIONS DURING THE YEAR AND THE BALANCE AT THE
CLOSE OF THE YEAR:
<TABLE>
<CAPTION>
BALANCE
AT CLOSE
SUBACCOUNT DESCRIPTION ADDITIONS OF YEAR
<S> <C> <C>
Capitalized lease for data processing equipment 249,294 766,732
Corporate Jet 5,725,000 5,725,000
TOTAL 5,974,294 6,491,732
</TABLE>
3/ DESCRIBE OTHER SERVICE COMPANY PROPERTY:
None.
4/ DESCRIBE CONSTRUCTION WORK IN PROGRESS:
None.
<PAGE>
8
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE III
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY
<TABLE>
<CAPTION>
ADDITIONS OTHER
BALANCE AT CHARGED CHANGES BALANCE
BEGINNING TO ADD AT CLOSE
DESCRIPTION OF YEAR ACCT 403 RETIREMENT1/ (DEDUCT) OF YEAR
ACCOUNT
<S> <C> <C> <C> <C>
301 ORGANIZATION
303 MISCELLANEOUS
INTANGIBLE
PLANT
304 LAND AND LAND
RIGHTS
305 STRUCTURES AND
IMPROVEMENTS
306 LEASEHOLD
IMPROVEMENTS 836,368 (836,368) 0
307 EQUIPMENT 3,979 (3,979) 0
308 OFFICE
FURNITURE
AND FIXTURES 59,450 (59,450) 0
309 AUTOMOBILES,
OTHER VEHICLES
AND RELATED
GARAGE EQUIP.
310 AIRCRAFT AND
AIRPORT
EQUIPMENT
311 OTHER SERVICE
COMPANY
PROPERTY
TOTAL 899,797 0 (899,797) 0 0
</TABLE>
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
All retirement amounts represent capitalized lease assets that
were transferred to Potomac Edison's general ledger due to the
transferring of Allegheny Energy, Inc's corporate headquarters
to Hagerstown, MD.
Depreciation was not amortized on the corporate jet due to the
fact the Allegheny Energy Service Corporation was guaranteed a
100% return on the jet's initial purchase price to be applied
to the company's new jet which was delivered in 02/00.
<PAGE>
9
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE IV - INVESTMENTS
INSTRUCTIONS:Complete the following schedule concerning investments.
Under Account 124 "Other Investments", state each
investment separately, with description, including, the
name of issuing company, number of shares or principal
amount, etc.
Under Account 136, "Temporary Cash Investments", list
each investment separately.
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE
OF YEAR OF YEAR
ACCOUNT 123 - INVESTMENT IN ASSOCIATE COMPANIES
None.
0 0
ACCOUNT 124 - OTHER INVESTMENTS
West Virginia Worker's Compensation Fund 81,412 0
0 0
0 0
81,412 0
ACCOUNT 136 - TEMPORARY CASH INVESTMENTS
None.
0 0
TOTAL 81,412 0
<PAGE>
10
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE V - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
INSTRUCTIONS: Complete the following schedule listing accounts receivable
from each associate company. Where the service company has
provided accommodation or convenience payments for associate
companies, a separate listing of total payments for each
associate company by subaccount should be provided.
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE
OF YEAR OF YEAR
ACCOUNT 146 - ACCOUNTS RECEIVABLE FROM
ASSOCIATE COMPANIES
Allegheny Energy, Inc. 2,118,449 1,436,280
Monongahela Power Company 11,695,423 24,100,143
The Potomac Edison Company 12,070,985 22,322,758
West Penn Power Company 20,125,895 21,100,787
Allegheny Energy Supply, Inc. 0 465,900
Allegheny Generating Company 40,171 12,671
Allegheny Pittsburgh Coal Company 3,164 25,597
Allegheny Ventures, Inc. (73,107) 98,025
AYP Energy, Inc. 525,501 341,797
Allegheny Communications Connect, Inc. 140,282 266,987
Allegheny Energy Solutions, Inc. 38,906 1,859
Allegheny Energy Units 1 & 2 0 160,842
West Virginia Power & Transmission 0 3,937
Albright Power Station 0 (35,798)
Ft. Martin Power Station 0 (3,272,247)
Harrison Power Station 0 (138,218)
Pleasants Power Station 0 157,882
Supplemental Executive Retirement Plan (113,642) (115,764)
TOTAL 46,572,027 66,933,435
ANALYSIS OF CONVENIENCE OR ACCOMODATION PAYMENTS:
Monongahela The Potomac West Penn
DESCRIPTION Power Edison Power TOTAL
Company Company Company PAYMENTS
None
TOTAL PAYMENTS 0 0 0 0
<PAGE>
11
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE VI - FUEL STOCK EXPENSES UNDISTRIBUTED
INSTRUCTIONS: Report the amount of labor and expenses incurred with
respect to fuel stock expenses during the year and
indicate amount attributable to each associate company.
Under the section headed "Summary" listed below give an
overall report of the fuel functions performed by the
service company.
DESCRIPTION LABOR EXPENSES TOTAL
ACCOUNT 152 - FUEL STOCK EXPENSES
UNDISTRIBUTED
None.
TOTAL 0 0 0
SUMMARY:
<PAGE>
12
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE VII - STORES EXPENSE UNDISTRIBUTED
INSTRUCTIONS: Report the amount of labor and expenses incurred with
respect to stores expense during the year and indicate
amount attributable to each associate company.
DESCRIPTION LABOR EXPENSES TOTAL
ACCOUNT 163 - STORES EXPENSE
UNDISTRIBUTED
None.
TOTAL 0 0 0
<PAGE>
13
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE VIII
MISCELLANEOUS CURRENT AND ACCRUED ASSETS
INSTRUCTIONS: Provide detail of items in this account. Items less
than $10,000 may be grouped, showing the number of
items in each group.
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE
OF YEAR OF YEAR
ACCOUNT 174 - MISCELLANEOUS CURRENT AND
ACCRUED ASSETS
None.
TOTAL 0 0
<PAGE>
14
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE IX - MISCELLANEOUS DEFERRED DEBITS
INSTRUCTIONS: Provide detail of items in this account. Items less
than $10,000 may be grouped by class showing the
number of items in each class.
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE
OF YEAR OF YEAR
ACCOUNT 186 - MISCELLANEOUS DEFERRED DEBITS
Pension Prepayment 0 28,207,647
Deferred Hourly wage accruals 1,115,743 256,671
TOTAL 1,115,743 28,464,318
<PAGE>
15
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE X
RESEARCH, DEVELOPMENT OR DEMONSTRATION EXPENDITURES
INSTRUCTIONS: Provide a description of each material research,
development, or demonstration project which incurred
costs by the service corporation during the year.
DESCRIPTION AMOUNT
ACCOUNT 188 - RESEARCH, DEVELOPMENT, OR
DEMONSTRATION EXPENDITURES
None
TOTAL 0
<PAGE>
16
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
SCHEDULE XI - PROPRIETARY CAPITAL
NUMBER OF PAR OR STATED
OF SHARES VALUE OUTSTANDING CLOSE OF PERIOD
ACCOUNT NUMBER CLASS OF STOCK AUTHORIZED PER SHARE NO. OF SHARES TOTAL AMOUNT
<S> <C> <C> <C> <C> <C>
201 COMMON STOCK ISSUED 50,000 10 5,000 50,000
INSTRUCTIONS: Classify amounts in each account with brief explanation, disclosing the general
nature of transactions which give rise to the reported amounts.
DESCRIPTION AMOUNT
ACCOUNT 211 - MISCELLANEOUS PAID-IN CAPITAL None. 0
ACCOUNT 215 - APPROPRIATED RETAINED EARNINGS None. 0
TOTAL
INSTRUCTIONS: Give particulars concerning net income or (loss) during the year,
distinguishing between compensation for the use of capital owed
or net loss remaining from servicing nonassociates per the
General Instructions of the Uniform System of Accounts. For
dividends paid during the year in cash or otherwise, provide rate
percentage, amount of dividend, date declared and date paid.
BALANCE AT NET INCOME BALANCE AT
DESCRIPTION BEGINNING OR DIVIDENDS CLOSE
OF YEAR (LOSS) PAID OF YEAR
ACCOUNT 216 - UNAPPROPRIATED RETAINED
EARNINGS
None.
TOTAL 0
</TABLE>
<PAGE>
17
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE XII - LONG-TERM DEBT
INSTRUCTIONS: Advances from associate companies should be reported separately
for advances on notes, and advances on open account. Names of
associate companies from which advances were received shall be
shown under the class and series of obligation column. For
Account 224 - Other long-term debt provide the name of creditor
company or organization, terms of the obligation, date of
maturity, interest rate, and the amount authorized and
outstanding.
<TABLE>
<CAPTION>
TERMS OF OBLIG DATE BALANCE AT BALANCE
NAME OF CREDITOR CLASS & SERIES OF INTEREST AMOUNT BEGINNING AT CLOSE
OF OBLIGATION MATURITY RATE AUTHORIZED OF YEAR ADDITIONS DEDUCTIONS OF YEAR
ACCOUNT 223-ADVANCES FROM
ASSOCIATE
COMPANIES:
None. 0
ACCOUNT 224- OTHER LONG-TERM
DEBT:
None. 0
<S> <C> <C> <C> <C>
TOTAL 0 0 0 0
</TABLE>
<PAGE>
18
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE XIII - CURRENT AND ACCRUED LIABILITIES
INSTRUCTIONS: Provide balance of notes and accounts payable to
each associate company. Give description and
amounts of miscellaneous current and accrued
liabilities. Items less than $10,000 may be grouped,
showing the number of items in each group.
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE
OF YEAR OF YEAR
ACCOUNT 233 - NOTES PAYABLE TO ASSOCIATE
COMPANIES 0 0
None.
TOTAL 0 0
ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE
COMPANIES
Allegheny Energy, Inc. 53,395 0
The Potomac Edison Company 0 4,822,742
West Penn Power Company 0 815,430
Monongahela Power Company 0 2,106,898
AYP Energy, Inc. 0 78,751
Albright Power Station 0 (701,376)
Ft. Martin Power Station 0 (179,095)
Harrison Power Station 0 (80,860)
Pleasants Power Station 0 (151,570)
TOTAL 53,395 6,710,920
ACCOUNT 242 - MISCELLANEOUS CURRENT AND
ACCRUED LIABILITIES
Employee benefits 11,060,054 0
Capital leases 1,660,937 507,856
Audit Expense Liability 312,730 321,504
Workers Compensation Awards 0 (77,258)
TOTAL 13,033,721 752,102
<PAGE>
19
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
INSTRUCTIONS: The space below is provided for important notes regarding
the financial statements or any account thereof. Furnish
particulars as to any significant contingent assets or
liabilities existing at the end of the year. Notes
relating to financial statements shown elsewhere in this
report may be indicated here by reference.
None other than those specifically noted on various pages.
<PAGE>
20
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE XV
STATEMENT OF INCOME
ACCOUNT DESCRIPTION CURRENT YEAR PRIOR YEAR
INCOME
457 Services rendered to associate companies 456,610,036 421,088,368
458 Services rendered to nonassociate
companies 0 0
421 Miscellaneous income or loss 0 0
Total Income 456,610,036 421,088,368
EXPENSE
101-108 Utility plant expenses 107,273,357 92,739,147
500-557 Power production expenses 90,212,223 89,314,560
560-598 Transmission & Distribution expenses 51,456,590 52,159,621
901-910 Customer accounts & services expenses 36,427,384 34,268,726
912-913 Sales expenses 3,457,949 4,967,982
920 Salaries and wages 46,748,245 44,432,598
921 Office supplies and expenses 16,790,235 12,729,464
922 Administrative expense transferred -
credit 22 208
923 Outside services employed 19,442,755 14,096,552
924 Property insurance 10,011 19,903
925 Injuries and damages 2,928,353 3,169,440
926 Employee pensions and benefits 36,807,281 33,368,616
928 Regulatory commission expense 290,157 154,884
930.1 General advertising expenses 322,295 876,993
930.2 Miscellaneous general expenses 3,794,438 3,039,080
931 Rents 20,191,937 17,871,488
935 Maintenance of structures and
equipment 4,019,030 3,939,076
403 Depreciation and amortization expense 0 0
408 Taxes other than income taxes 14,549,596 12,680,007
409 Income taxes (1,908,699) 8,155,729
410 Provision for deferred income taxes 8,007,695 428,620
411 Provision for deferred income taxes -
credit (5,435,506) (8,318,472)
411.5 Investment tax credit 0 0
421 Miscellaneous income/loss 96,600 8,080
426.1 Donations 153,829 158,845
426 Other deductions 677,994 653,198
427 Interest on long-term debt 0 0
431 Other interest expense 296,265 174,023
Total Expense 456,610,036 421,088,368
Net Income or (Loss) 0 0
<PAGE>
21
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
ANALYSIS OF BILLING
ASSOCIATE COMPANIES
ACCOUNT 457
<TABLE>
<CAPTION>
DIRECT INDIRECT COMPENSATION TOTAL
NAME OF ASSOCIATE COMPANY COSTS COSTS FOR USE AMOUNT
CHARGED CHARGED OF CAPITAL BILLED
457-1 457-2 457-3
<S> <C> <C> <C> <C>
Monongahela Power Company 115,260,595 0 0 115,260,595
Allegheny Energy Supply Compan 12,380,513 0 0 12,380,513
The Potomac Edison Company 114,176,726 0 0 114,176,726
West Penn Power Company 198,672,857 0 0 198,672,857
West Virginia Power & Trans. C 31,833 0 0 31,833
Allegheny Energy Units 1&2 613,929 0 0 613,929
Allegheny Energy, Inc. 7,029,111 0 0 7,029,111
Allegheny Energy Solutions, In 334,531 0 0 334,531
Allegheny Ventures, Inc. 2,195,618 0 0 2,195,618
Allegheny Comm. Connect, Inc. 2,028,483 0 0 2,028,483
AYP Energy, Inc. 3,447,595 0 0 3,447,595
Allegheny Generating Company 345,124 0 0 345,124
Allegheny Pittsburgh Coal Co. 93,121 0 0 93,121
TOTAL 456,610,036 0 0 456,610,036
</TABLE>
Note: Items that were shown as indirect costs in previous years have now been
allocated directly.
<PAGE>
22
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
ANALYSIS OF BILLING
NONASSOCIATE COMPANIES
ACCOUNT 458
<TABLE>
<CAPTION>
DIRECT INDIRECT COMPENSATION EXCESS TOTAL
NAME OF NONASSOCIATE COMPANY COST COST FOR USE TOTAL OR AMOUNT
CHARGED CHARGED OF CAPITAL COST DEFICIENCY BILLED
<S> <C> <C> <C> <C> <C>
458-1 458-2 458-3 458-4
None.
TOTAL
</TABLE>
INSTRUCTION: Provide a brief description of the services rendered to
each nonassociate company:
<PAGE>
23
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
<TABLE>
<CAPTION>
ASSOCIATE NONASSOCIATE TOTAL CHARGES
COMPANY CHARGES COMPANY CHARGES FOR SERVICE
DIRECT INDIRECT DIRECT INDIRECT DIRECT INDIRECT
DESCRIPTION OF ITEMS COST COST TOTAL COST COST TOTAL COST COST TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
101-108 UTILITY PLANT EXPENSES 107,273,357 - 107,273,357 - - - 107,273,357 - 107,273,357
500-557 POWER PRODUCTION EXPENSES 90,212,223 - 90,212,223 - - - 90,212,223 - 90,212,223
560-598 TRANSMISSION & DISTRIBUTION EXP 51,456,590 - 51,456,590 - - - 51,456,590 - 51,456,590
901-910 CUSTOMER ACCOUNT & SERVICES EXP 36,427,384 - 36,427,384 - - - 36,427,384 - 36,427,384
912-913 SALES EXPENSES 3,457,949 - 3,457,949 - - - 3,457,949 - 3,457,949
920 SALARIES AND WAGES 46,748,245 - 46,748,245 - - - 46,748,245 - 46,748,245
921 OFFICE SUPPLIES AND EXPENSES 16,790,235 - 16,790,235 - - - 16,790,235 - 16,790,235
922 ADMINISTRATIVE EXPENSES
TRANSFERRED - CREDIT 22 - 22 - - - 22 - 22
923 OUTSIDE SERVICES EMPLOYED 19,442,755 - 19,442,755 - - - 19,442,755 - 19,442,755
924 PROPERTY INSURANCE 10,011 - 10,011 - - - 10,011 - 10,011
925 INJURIES AND DAMAGES 2,928,353 - 2,928,353 - - - 2,928,353 - 2,928,353
926 EMPLOYEE PENSIONS AND
BENEFITS 36,807,281 - 36,807,281 - - - 36,807,281 - 36,807,281
928 REGULATORY COMMISSION EXPENSE 290,157 - 290,157 - - - 290,157 - 290,157
930.1 GENERAL ADVERTISING EXPENSES 322,295 - 322,295 - - - 322,295 - 322,295
930.2 MISCELLANEOUS GENERAL EXPENSES 3,794,438 - 3,794,438 - - - 3,794,438 - 3,794,438
931 RENTS 20,191,937 - 20,191,937 - - - 20,191,937 - 20,191,937
935 MAINTENANCE OF STRUCTURES AND
EQUIPMENT 4,019,030 - 4,019,030 - - - 4,019,030 - 4,019,030
403 DEPRECIATION AND AMORTIZATION
EXPENSE - - - - - - - - -
408 TAXES OTHER THAN INCOME TAXES 14,549,596 14,549,596 14,549,596 - 14,549,596
409 INCOME TAXES (1,908,699) - (1,908,699) - - - (1,908,699) - (1,908,699)
410 PROVISION FOR DEFERRED INCOME
TAXES 8,007,695 - 8,007,695 - - - 8,007,695 - 8,007,695
411 PROVISION FOR DEFERRED INCOME
TAXES - CREDIT (5,435,506) - (5,435,506) - - - (5,435,506) - (5,435,506)
411.5 INVESTMENT TAX CREDIT - - - - - - - - -
421 MISCELLANEOUS INCOME/LOSS 96,600 - 96,600 - - - 96,600 - 96,600
426.1 DONATIONS 153,829 - 153,829 - - - 153,829 - 153,829
426 OTHER DEDUCTIONS 677,994 - 677,994 - - - 677,994 - 677,994
427 INTEREST ON LONG-TERM DEBT - - - - - - - - -
431 OTHER INTEREST EXPENSE 296,265 - 296,265 - - - 296,265 - 296,265
- - - - -
INSTRUCTION: Total cost of service - - - - -
will equal for associate and - - - - -
nonassociate companies the total - - - - -
amount billed under their separate
analysis of billing schedules.
TOTAL EXPENSES 456,610,036 - 456,610,036 - - - 456,610,036 - 456,610,036
COMPENSATION FOR USE OF EQUITY CAPITA - - - - - - - - -
430 INTEREST ON DEBT TO ASSOC COS. - - - - - - - - -
TOTAL COST OF SERVICE 456,610,036 - 456,610,036 - - - 456,610,036 - 456,610,036
</TABLE>
Note: Items that were shown as indirect costs in previous years have
now been charged directly.
<PAGE>
24
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
<TABLE>
<CAPTION>
DEPARTMENT OR SERVICE FUNCTION
GENERATION DELIVERY ENERGY
TOTAL BUSINESS POWER BUSINESS PLANNING & SUPPLY
DESCRIPTION OF ITEMS AMOUNT OVERHEAD EXECUTIVE UNIT STATIONS UNIT COMPLIANCE DIVISION
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
101-108 UTILITY PLANT EXPENSES 107,273,357 94,623 (16,667) 2,312,915 11,827,363 83,920,350 (2,559) 475,515
500-557 POWER PRODUCTION EXPENSES 90,212,223 3,096,422 343,859 1,707,416 76,739,232 5,479,766 807,150 1,932,604
560-598 TRANS & DISTR EXPENSES 51,456,590 (109,137) 30,989 18,104 545,819 49,066,099 538,709 3,247
901-910 CUSTOMER ACCTS & SVCS
EXPENSES 36,427,384 39 2,381 14,875 6,076 33,591,488 (176,085) 278,973
912-913 SALES EXPENSES 3,457,949 - - 20,106 15,108 2,224,451 (1,069) 1,171,309
920 SALARIES AND WAGES 46,748,245 1,428,413 3,840,671 3,272,540 573,936 9,268,076 580,399 2,103,670
921 OFFICE SUPPLIES AND
EXPENSES 16,790,235 (95,212) 514,295 1,096,534 266,285 4,942,604 251,539 531,185
922 ADMINISTRATIVE EXPENSES
TRANSFERRED - CREDIT 22 - - - - 22 - -
923 OUTSIDE SERVICES EMPLOYED 19,442,755 32,919 5,785,329 676,442 592,774 2,253,707 117,694 410,795
924 PROPERTY INSURANCE 10,011 - 8,753 645 598 - - -
925 INJURIES AND DAMAGES 2,928,353 361,987 274 863 1,700 984,196 - 1,511
926 EMPLOYEE PENSIONS AND
BENEFITS 36,807,281 (37,904,680) 1,048,787 899,602 11,583,778 16,107,273 140,981 781,344
928 REGULATORY COMMISSION
EXPENSE 290,157 - 17,511 2,114 - 1,657 - 69,576
930.1 GENERAL ADVTSNG EXPENSE 322,295 - - - - 309,605 - -
930.2 MISC GENERAL EXPENSE 3,794,438 679,887 208,863 11,675 121,765 683,295 147,810 9,034
931 RENTS 20,191,937 14,851,550 84,887 616,789 65,100 3,393,486 28,947 147
935 MAINTENANCE OF STRUCTURES
AND EQUIPMENT 4,019,030 - 7,341 266,147 44,433 3,631,266 1,108 15,437
403 DEPRECIATION AND
AMORTIZATION EXPENSE - - - - - - - -
408 TAXES OTHER THAN
INCOME TAXES 14,549,596 682,509 268,240 389,387 5,650,716 5,293,415 49,710 355,190
409 INCOME TAXES (1,908,699) (1,908,699) - - - - - -
410 PROVISION FOR DEFERRED
INCOME TAXES 8,007,695 8,007,695 - - - - - -
411 PROVISION FOR DEFERRED
INCOME TAXES - CREDIT (5,435,506) (5,435,506) - - - - - -
411.5 INVESTMENT TAX CREDIT - - - - - - - -
421 MISCELLANEOUS INCOME/LOSS 96,600 54,407 (35,341) 4,727 1,568 26,937 - (11,567)
426.1 DONATIONS 153,829 - 416 - 68 262 148,259 -
426 OTHER DEDUCTIONS 677,994 2,007 617,988 1,019 29 8,410 958 -
427 INTEREST ON LONG-TERM
DEBT - - - - - - - -
430 INTEREST ON DEBT TO
ASSOCIATE COMPANIES - - - - - - - -
431 OTHER INTEREST EXPENSE 296,265 101,499 - - - - - -
INSTRUCTION: Indicate each
department or service function.
(See Instruction 01-3 General
Structure of Accounting System:
Uniform System of Accounts.)
TOTAL EXPENSES 456,610,036 (16,059,277) 12,728,576 11,311,900 108,036,348 221,186,365 2,633,551 8,127,970
Note: Overhead amounts include adjustments and clearing that
were not done at the department level.
25
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
</TABLE>
<TABLE>
<CAPTION>
DEPARTMENT OR SERVICE FUNCTION
AUDIT CORPORATE CORPORATE FINANCIAL HUMAN INFORMATION
DESCRIPTION OF ITEMS SERVICES CONTROLLER COMMUNICATIONS AFFAIRS MGMT. RESOURCES SERVICES
<S> <C> <C> <C> <C> <C> <C> <C> <C>
101-120 UTILITY PLANT EXPENSES 25,095 2,607,493 39,088 600 204,452 2,903,118 872,795
500-557 POWER PRODUCTION EXPENSES 36,487 28,772 81 24,054 12,030 (80,319) 1,389
560-598 TRANS & DISTR EXPENSES 65 12,486 9,586 1,483 - 1,254,132 1,694
901-910 CUSTOMER ACCTS & SVCS EXPENSES 13 1,524 653,543 - 3,833 874,795 28,179
912-913 SALES EXPENSES - - 2,407 - 1,313 (110,860) -
920 SALARIES AND WAGES 1,221,158 6,263,949 601,965 131,705 852,064 8,150,940 63,429
921 OFFICE SUPPLIES AND EXPENSES 125,661 3,530,418 404,485 13,008 114,659 545,029 1,606,861
922 ADMINISTRATIVE EXPENSES
TRANSFERRED - CREDIT - - - - - - -
923 OUTSIDE SERVICES EMPLOYED 703,313 1,288,351 112,534 2,965 64,562 341,474 1,896,547
924 PROPERTY INSURANCE - - - - - - -
925 INJURIES AND DAMAGES - 265 175 - 1,898 470,093 -
926 EMPLOYEE PENSIONS AND BENEFITS 168,201 962,918 256,676 30,215 135,054 40,169,117 84,233
928 REGULATORY COMMISSION EXPENSE - 4,599 - - - - -
930.1 GENERAL ADVERTISING EXPENSE - 591 11,308 - - - -
930.2 MISCELLANEOUS GENERAL EXPENSE - 33,441 690,394 (63) 12,114 201 10,155
931 RENTS 48,211 283,127 63,377 3,236 36,053 175,489 3,133
935 MAINTENANCE OF STRUCTURES AND
EQUIPMENT 1,313 11,523 4,773 125 1,514 6,244 4,946
403 DEPRECIATION AND AMORTIZATION
EXPENSE - - - - - - -
408 TAXES OTHER THAN INCOME TAXES 81,833 464,678 66,879 9,863 62,709 212,148 289
409 INCOME TAXES - - - - - - -
410 PROVISION FOR DEFERRED INCOME
TAXES - - - - - - -
411 PROVISION FOR DEFERRED INCOME
TAXES - CREDIT - - - - - - -
411.5 INVESTMENT TAX CREDIT - - - - - - -
421 MISCELLANEOUS INCOME/LOSS - - - - - - -
426.1 DONATIONS - - 650 - - - 4,174
426 OTHER DEDUCTIONS - 2,180 467 24,681 - - -
427 INTEREST ON LONG-TERM DEBT - - - - - - -
430 INTEREST ON DEBT TO ASSOCIATE
COMPANIES - - - - - - -
431 OTHER INTEREST EXPENSE - - - - - 194,766 -
INSTRUCTION: Indicate each
department or service function.
(See Instruction 01-3 General
Structure of Accounting System:
Uniform System of Accounts.)
TOTAL EXPENSES 2,411,350 15,496,315 2,918,388 241,872 1,502,255 55,106,367 4,577,824
</TABLE>
Note: Overhead amounts include adjustments and clearing that were
not done at the department level.
<PAGE>
25A
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
<TABLE>
<CAPTION>
DEPARTMENT OR SERVICE FUNCTION
TREASURY OTHER
REGULATION SERVICES & (MERGER &
AND SYSTEM RISK (Unregulated) CORPORATE
DESCRIPTION OF ITEMS LEGAL PROCURMENT RATES SECURITY MGMT AYP CAPITAL RESTRUCTURING)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
101-120 UTILITY PLANT EXPENSES 46,967 145,613 447,435 12,659 163,654 1,192,848 -
500-557 POWER PRODUCTION EXPENSES 82,203 5,120 9 - (7,292) 3,240 -
560-598 TRANS & DISTR EXPENSES 30,522 1,177 25,336 11,067 2,241 12,971 -
901-910 CUSTOMER ACCTS & SVCS EXPENSES 19,651 - 22,487 3,411 1,042,477 59,724 -
912-913 SALES EXPENSES 2,901 - - - 2,294 129,989 -
920 SALARIES AND WAGES 2,519,690 309,151 2,208,474 1,244,153 1,140,174 973,688 -
921 OFFICE SUPPLIES AND EXPENSES 472,236 596,554 727,849 289,154 660,358 196,733 -
922 ADMINISTRATIVE EXPENSES
TRANSFERRED - CREDIT - - - - - - -
923 OUTSIDE SERVICES EMPLOYED 3,648,265 79,968 248,314 6,850 438,619 741,333 -
924 PROPERTY INSURANCE - - - - - 15 -
925 INJURIES AND DAMAGES 946,883 835 - 271 150,815 6,587 -
926 EMPLOYEE PENSIONS AND BENEFITS 610,251 51,282 415,536 205,162 441,762 619,789 -
928 REGULATORY COMMISSION EXPENSE 24,739 - 169,961 - - - -
930.1 GENERAL ADVERTISING EXPENSE - - - - - 791 -
930.2 MISCELLANEOUS GENERAL EXPENSE 279,311 49,208 286,215 968 504,964 65,201 -
931 RENTS 143,923 66,758 120,013 37,315 54,963 115,433 -
935 MAINTENANCE OF STRUCTURES AND
EQUIPMENT 5,086 3,663 8,155 4,094 3,060 (1,198) -
403 DEPRECIATION AND AMORTIZATION
EXPENSE - - - - - - -
408 TAXES OTHER THAN INCOME TAXES 256,798 22,515 194,915 93,426 179,337 215,039 -
409 INCOME TAXES - - - - - - -
410 PROVISION FOR DEFERRED INCOME
TAXES - - - - - - -
411 PROVISION FOR DEFERRED INCOME
TAXES - CREDIT - - - - - - -
411.5 INVESTMENT TAX CREDIT - - - - - - -
421 MISCELLANEOUS INCOME/LOSS 55,488 - - - 381 - -
426.1 DONATIONS - - - - - - -
426 OTHER DEDUCTIONS 19,807 - 213 - 223 12 -
427 INTEREST ON LONG-TERM DEBT - - - - - - -
430 INTEREST ON DEBT TO ASSOCIATE
COMPANIES - - - - - - -
431 OTHER INTEREST EXPENSE - - - - - - -
INSTRUCTION: Indicate each
department or service function.
(See Instruction 01-3 General
Structure of Accounting System:
Uniform System of Accounts.)
TOTAL EXPENSES 9,164,721 1,331,844 4,874,912 1,908,530 4,778,030 4,332,195 -
</TABLE>
Note: Overhead amounts include adjustments and clearing that were
not done at the department level.
<PAGE>
26
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
DEPARTMENTAL ANALYSIS OF SALARIES
ACCOUNT 920
<TABLE>
<CAPTION>
DEPARTMENTAL SALARY EXPENSE NUMBER
NAME OF DEPARTMENT INCLUDED IN AMOUNTS BILLED TO PERSONNEL
Indicate each dept. TOTAL PARENT OTHER NON END OF
or service function. AMOUNT COMPANY ASSOCIATES ASSOCIATES YEAR
Corporate:
<S> <C> <C> <C> <C> <C>
Executive 894,401 46,600 847,801 4
Administration 256,261 215 256,046 2
Delivery 349,480 8,489 340,991 2
Supply 324,149 34 324,115 2
External Affairs 1,707,332 310 1,707,022 21
Finance 590,709 190,021 400,688 6
Controller 187,806 1,933 185,873 2
Legal and Corp. Secretary 769,426 30,486 738,940 11
Generating Business Unit 5,370,149 53 5,370,096 161
Power Stations 80,358,538 0 80,358,538 1,227
Energy Supply Division 4,711,595 0 4,711,595 84
Delivery Business Unit 148,643,603 489,535 148,154,068 2,978
Allegheny Ventures, Inc.
(Unregulated) 1,993,490 8,322 1,985,168 19
Support Business Units:
Audit Services 1,064,696 809 1,063,887 21
Controller 5,509,287 35,579 5,473,708 136
Corporate Communications 876,749 17,703 859,046 18
Corporate Affairs 0 0 0 0
Financial Mgmt. 909,611 237 909,374 18
Human Resources 3,041,962 635 3,041,327 53
Information Services 7,795,120 0 7,795,120 119
Legal 2,887,409 19,228 2,868,181 44
Plan. & Compliance 644,021 0 644,021 13
Procurement 1,550,752 0 1,550,752 30
Regulation & Rates 2,670,962 79 2,670,883 49
System Security 1,217,285 0 1,217,285 26
Treasury Svcs, Electronic
Commerce & Risk Mgmt. 2,029,695 104,700 1,924,995 47
TOTAL 276,354,488 954,968 275,399,520 5,093
</TABLE>
In 1997 virtually all employees of associated companies were
transferred to Allegheny Power Service Corporation. These
amounts include total salaries rather than just Account 920
amounts. These amounts may include charges to accounts
throughout the Income Statement and Balance Sheet. Therefore,
they can not be identified in total with any particular line
on Schedule XV, but are distributed among various lines.
<PAGE>
27
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed.
If the aggregate amounts paid to any one payee and included within
one subaccount is less than $100,000, only the aggregate number
and amount of all such payments included within the subaccount
need be shown. Provide a subtotal for each type of service.
FROM WHOM PURCHASED AMOUNT
Data Processing Service:
Compuware Corp. 3,533,566
IBM Corp. 2,005,613
Alstom ESCA 1,196,366
People Trac, Inc. 707,014
Inacom Information Systems 807,273
Corporate Software 416,416
Inpower, Inc. 388,504
RAD Consulting, Inc. 279,428
Comdisco, Inc. 241,621
Hyperion Solutions 234,429
Candle Corporation 234,272
Sarcom, Inc. 180,282
Lodestar Corporation 175,265
Mosaix 169,622
Primavera Systems, Inc. 164,565
Computer Assoc. International 145,264
Utilities International 138,024
Informatica Corporation 119,653
Sterling Software 112,068
Aspen Consulting, Inc. 111,163
American Management Systems 106,848
1,523,779
Miscellaneous - 118 vendors(Listed below are
misc. vendors over $10,000)
Enterprise Group, Ltd. 99,851
U.S. Bank 66,717
SAS Institute Inc. 59,710
Corporate Software & Technology 59,643
BMC Software Distribution 58,612
Cincom 58,027
Digital Inspections 51,933
Microsoft Services 48,200
Professional Service 47,820
Scientech, Inc. 45,436
American Software, Inc. 45,000
The Simplex Group 42,400
Oracle Corporation 42,014
BA Credit Corporation 41,277
Remedy Corporation 38,103
Allen Systems Group, Inc. 34,886
EDI Business Group, Inc. 32,733
Hobbs Group-Master 30,075
Jetform Corporation 27,962
Vantage Source, LLP 27,834
First Bank-VISA 23,938
RLW Analytics, Inc. 23,725
Powertech Labs, Inc. 22,135
ABB Power T&D Company, Inc. 20,956
Powertran Systems Limited 20,862
M&I Data Services 19,696
Intergraph Corporation 18,901
Netrex, Inc. 18,710
Primavera Systems, Inc. 18,285
Delorme 17,225
Bentley Systems, Inc. 15,844
Levi Ray & Shoup, Inc. 15,236
27
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed.
If the aggregate amounts paid to any one payee and included within
one subaccount is less than $100,000, only the aggregate number
and amount of all such payments included within the subaccount
need be shown. Provide a subtotal for each type of service.
FROM WHOM PURCHASED AMOUNT
Fraternal Services Company 13,992
Future Scope, Inc. 13,785
Merant, Inc. 13,261
PSG/Sarcom 12,110
CIMS Lab, Inc. 10,688
Freshwater Software, Inc. 10,559
Hummingbird Communications 10,352
Cizer Software Corporation 10,200
Teams, Inc. 10,070
Miscellaneous-77 vendors under $10,000 225,015
1,523,779
Total Data Processing Service 12,991,035
Engineering Service:
Orbital Engineering, Inc. 1,182,418
Cintar, Inc. 573,179
Dravo Lime Co. 500,000
Raytheon Engineers 277,598
MK Engineering, Inc. 130,468
Miscellaneous - 23 vendors(Listed below are
misc. vendors over $10,000) 372,722
Gai Consultants, Inc. 59,137
Badger Technology, Inc. 53,230
SE Technologies, Inc. 46,972
Kubba Consultants, Inc. 37,394
PHB Hagler Bailly Inc. 37,173
Pasek Project Management 34,373
Information Systems Serv 23,326
Black & Veatch 18,060
Hunton & Williams 12,600
General Physics Corporation 12,000
Miscellaneous-13 vendors under $10,000 38,458
372,722
Total Engineering Service 3,036,385
Legal Service:
Sullivan & Cromwell 4,232,453
Analysis Group/Economics 860,434
Verner-Liipfert 515,133
Winston & Strawn 405,737
Babst Calland Clements 393,554
Kirkpatrick & Lockhart 280,037
Carter Ledyard & Milburn 272,549
Murphy & Shaffer 290,376
Cravath Swaine & Moore 559,292
Robinson & McElwee LLP 249,827
Zevnik Horton Guibord 235,109
Jackson & Kelly PLLC 288,403
Ballard Spahr Andrews 164,459
PricewaterhouseCoopers 116,241
Schnader Harrison 113,749
PHB Hagler Bailly Inc. 108,932
27
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed.
If the aggregate amounts paid to any one payee and included within
one subaccount is less than $100,000, only the aggregate number
and amount of all such payments included within the subaccount
need be shown. Provide a subtotal for each type of service.
FROM WHOM PURCHASED AMOUNT
Miscellaneous -115 vendors(Listed below are misc.
vendors over $10,000) 1,055,950
Jones Day Reavis & Pogue 91,664
Keller & Heckman LLP 80,637
John G. Graham 62,164
Reed Smith Shaw 49,652
Eckert Seamans Cherin & Mallot 42,386
J. Christopher Lagow 41,974
Thorp Reed & Armstrong 38,917
Babst Calland Clements 38,417
Ryan McGinn Samples 37,743
Robert Hughes Associates 32,807
William A. Badger 28,520
Tegarden & Associates 27,504
Hunton & Williams 27,500
The Brattle Group 24,561
Carter Ledyard & Milburn 22,691
Peyton Paul Phillips ESQ 22,679
PricewaterhouseCoopers 21,045
Brody & Assoc 20,962
National Economic Resource Assoc 18,923
Jack's Creek/Sitkin Smel 17,907
Lippes Silverstein 17,907
Alstom ESCA 17,000
Thorp Reed & Armstrong 14,193
Phillips & Faldowski PC 13,924
Zevnik Horton Guibor 12,041
Reed Smith Shaw & McClay 11,823
Winthrop Stimson Putnam 11,370
Legal Network Ltd. 11,132
Advantis 10,992
Miscellaneous- 86 vendors under $10,000 186,914
1,055,950
Total Legal Service 10,142,236
Medical Service:
Miscellaneous - 129 vendors (Listed below are misc.
vendors over $10,000) 326,330
Spectrum Medical Ser 99,763
Aestique Executive Health 37,642
Professional Health Services 34,834
Ergonomic & Safety Services 19,809
Novaeon, Inc. 16,912
Healthsouth Mountainview 16,560
Angelo DeMezza MD 12,000
Miscellaneous - 122 vendors under $10,000 88,810
326,330
Total Medical Service 326,330
Temporary Manpower:
Parsons Energy & Chemical 1,465,265
Manpower, Inc. 167,629
Miscellaneous -14 vendors(Listed below are
misc. vendors over $10,000) 136,658
27
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed.
If the aggregate amounts paid to any one payee and included within
one subaccount is less than $100,000, only the aggregate number
and amount of all such payments included within the subaccount
need be shown. Provide a subtotal for each type of service.
FROM WHOM PURCHASED AMOUNT
Kelly Services, Inc. 30,134
Orbital Engineering, Inc. 29,278
Powerline Systems, Inc. 23,160
Manpower 19,583
Technical Solutions, Inc. 15,047
Miscellaneous - 9 vendors under $10,000 19,456
136,658
Total Temporary Manpower 1,769,552
Credit and Collections:
Payco American Corp. 645,823
Miscellaneous - 9 vendors (Listed below are
misc. vendors over $10,000) 75,874
Interactive Performance 60,384
Miscellaneous - 8 vendors under $10,000 15,490
75,874
Total Credit and Collections 721,697
Auditing:
PricewaterhouseCoopers 993,358
Miscellaneous - 5 vendors(Listed below are
misc. vendors over $10,000) 54,487
Modis Solutions 52,198
Miscellaneous - 4 vendors under $10,000 2,289
54,487
Total Auditing 1,047,845
Other Service:
Ciber 1,371,958
Hallmark Tassone, Inc. 1,261,664
Rapidigm 1,101,325
Source Services Corporation 982,459
Enterprise Group, Ltd. 903,292
EPRI 847,933
ChaseMellon Shareholder Services 646,221
Cotelligent 626,480
AC Coy, Co. 536,138
Lucent Technologies 525,308
Einhorn Design 512,085
Dollar Energy Fund, Inc. 456,062
Xerox Connect, Inc. 417,713
People3 Inc. 363,709
Tek Systems 294,419
L.J. Associates, Inc. 292,223
Business Records Man 226,926
Phoenix Solutions, Inc. 223,594
Cambridge Energy Research 215,791
CRS, Inc. 210,214
Affiliated Computer Services 366,172
GSI Energy Marketing Ltd. 193,209
Modis Solutions 191,885
27
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed.
If the aggregate amounts paid to any one payee and included within
one subaccount is less than $100,000, only the aggregate number
and amount of all such payments included within the subaccount
need be shown. Provide a subtotal for each type of service.
FROM WHOM PURCHASED AMOUNT
MK Consulting Services, Inc. 351,112
Utilities International 172,814
SEI Inc. 170,765
Management Consulting 156,424
Electric Power Research 146,000
Aspen Consulting, Inc. 127,308
Knepper Press Corporation 125,431
Crow Consulting 123,739
Vista Information Technology 118,363
Cinergy Corporation 111,442
EDI Business Group, Inc. 107,439
Ogilvy Public Relations 106,807
Sarcom, Inc. 106,496
Levitan & Associates 105,651
Electrotek Concepts, Inc. 102,654
Miscellaneous - 385 vendors(Listed below are
misc. vendors over $10,000) 5,241,525
Cambridge Technology PAR 98,600
Cinergy Supply Network 98,411
Heidrick & Struggles, Inc. 97,210
Advance Security, Inc. 96,152
Standard and Poor's 95,435
Allin Communications 156,864
Telcordia Technologies 91,000
ICF Consulting 90,000
Softmart 89,394
ADP Investor Communication 87,191
Towers Perrin, Inc. 84,571
Deloitte & Touche LLP 83,090
Whittman Hart, Inc. 81,360
Aus Consultants, Inc. 77,364
Seminars By Sam Deep 72,163
Environmental Systems Co. 70,435
New York Stock Exchange 67,580
Management Consulting 67,203
Navigant Consulting, Inc. 65,000
Meta Group, Inc. 64,590
Colorforms 63,296
Verner-Liipfert 61,793
Lan Tek Computer Service 61,281
En-Net Service LLC 60,128
Xerox Connect 59,771
Lehigh University 56,805
Air Monitor Corporation 56,770
Sedgwick of PA, Inc. 55,500
Candle Corp. 55,080
Economists, Inc. 54,324
Executrain Corp. 53,505
KMET Enterprises, Inc. 53,462
Genosys Technology Management 87,244
Merrill Corporate 52,284
General Office Petty Cash Fund 50,802
Test, Inc. 48,083
Businesswire 47,503
PNC Bank, N.A. 47,495
Chas M. Henry Printing Company 46,934
27
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed.
If the aggregate amounts paid to any one payee and included within
one subaccount is less than $100,000, only the aggregate number
and amount of all such payments included within the subaccount
need be shown. Provide a subtotal for each type of service.
FROM WHOM PURCHASED AMOUNT
Klett Lieber Rooney 45,683
Uniscribe Professional Services 43,261
Oracle Corporation 43,200
The Segal Company 42,080
Powerplan Consultants, Inc. 41,500
Black & Veatch 40,000
Gateway Rehabilitation Center 39,782
EASI 39,478
Dollar Energy Fund 38,275
Risk Advisory 35,111
Skipping Stone 34,414
Maxim Group 33,721
Culver Company, Inc. 32,871
RDA Group 32,580
Ameritech 31,500
Consult USA 31,343
The Palace Printer 30,389
General Electric International 30,000
PJM Interconnection, LLC 30,000
Manpower, Inc. 29,368
The Mathworks, Inc. 29,345
Engineering Applied Science 28,493
BGE 28,151
Cantor Fitzgerald Broker 27,123
Peter Imlay Assoc, LLC 27,121
United Healthcare Insurance Co. 26,613
National Economic Resource Assoc. 26,544
UUNet 25,137
Massachusetts Institute 25,000
M Franklin Associates 24,900
West Virginia University 24,200
Evelyn H. Krol 23,359
United Parcel Service 22,936
Harding Lawson Associate 21,500
Grayboy & Associates 21,371
Employers Service Corporation 21,055
Reddy Corporation International 21,000
Analytical Automation 20,780
Phoenix Solutions, Inc. 20,664
Coal Utilization Research 20,000
General Electric Co. 19,837
Desbrow & Assoc. 18,590
Power Technologies, Inc. 18,357
Jana O Sheffer 18,230
American Bank Note Co. 18,195
Edison Electric Institute 17,923
Clean Air Capital Market 17,890
Morgan Stanley Dean Witter 17,822
Pennsylvania Power Co. 17,287
Verio Pennsylvania Remit 16,960
Washington Consulting Group 16,685
Law Cypress Distribution 16,452
American Management 16,400
First Bank-VISA 15,924
Porter Wright Morris 15,817
Professional Service 15,786
27
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed.
If the aggregate amounts paid to any one payee and included within
one subaccount is less than $100,000, only the aggregate number
and amount of all such payments included within the subaccount
need be shown. Provide a subtotal for each type of service.
FROM WHOM PURCHASED AMOUNT
Donald L. Whipp 15,751
Pricewell 15,696
Justifacts Credential 15,393
Adam Filippo & Assoc. 15,000
Wausau Financial Systems 14,880
Telerama 14,639
Eagle Ray Software Systems 14,514
Conway Consulting 13,164
Harbinger Corp. 13,150
Productivity Point 13,000
Bruce Piasecki 12,915
Productivity Point 12,700
Thomson Financial Invest 12,600
Rec Associates 12,500
Antech Ltd. 12,124
Advance Recruiting Service 11,984
Lexecon, Inc. 11,838
PHB Hagler Bailly, Inc. 11,757
William E. Wolford Jr. 11,453
Carol Harris Temporaries 11,323
G.E. Armstrong Enterprise 11,000
Baker & O'Brien Inc. 10,735
Mountainnet, Inc. 10,420
Potomac, Inc. 10,400
Enterprise for Education 10,196
Corporate Restructuring 10,093
Miscellaneous - 264 vendors under $10,000 618,628
5,241,525
Total Other Service 20,140,751
TOTAL OUTSIDE SERVICES 50,175,831
These amounts summarize all outside services employed and may include
charges to accounts throughout the Income Statement and Balance Sheet.
Therefore, they can't be identified in total with any particular line
on Schedule XV, but are distributed among various lines.
<PAGE>
28
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
EMPLOYEE PENSIONS AND BENEFITS
ACCOUNT 926
INSTRUCTIONS: Provide a listing of each pension plan and benefit
program provided by the service company. Such
listing should be limited to $25,000.
DESCRIPTION AMOUNT
Employee welfare payments 674,461
Corporate pension plan 1,224,000
Long-term disability 1,299,544
Employee moving expense 2,052,860
Group medical 20,360,788
Group life insurance 2,271,276
Savings plan expense 7,110,991
Employee education assistance 271,625
Group dental 1,468,776
Medical salaries & fees 423,733
Postretirement benefits other than pensions 9,796,664
Supplemental Executive Retirement expense
News publications & other employee information 63,555
Meal allowance 358,590
Personal vehicle allowance 1,318,946
Benefits allocated functionally (14,339,155)
Payroll additives 2,135,167
Company vehicle allowance 207,370
Ready Response team allowance 67,150
Health & Dependent care spending plan 40,941
Miscellaneous (2)
TOTAL 36,807,281
<PAGE>
29
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
GENERAL ADVERTISING EXPENSES
ACCOUNT 930.1
INSTRUCTIONS: Provide a listing of the amount included in Account
930.1, "General Advertising Expenses", classifying
the items according to the nature of the advertising
and as defined in the account definition. If a
particular class includes an amount in excess of
$3,000 applicable to a single payee show separately
the name of the payee and the aggregate amount
applicable thereto.
DESCRIPTION NAME OF PAYEE AMOUNT
General Advertising:
Other Various 23,147
23,147
Billboard Advertising:
Other Various -
-
Newspaper Advertising:
Hallmark Tassone 182,897
Other Various 908
183,805
Publications:
Other Various 395
395
Radio Advertising:
Hallmark Tassone 104,484
Other Various -
104,484
Television Advertising:
Hallmark Tassone 10,464
Other Various -
10,464
TOTAL 322,295
<PAGE>
30
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
MISCELLANEOUS GENERAL EXPENSES
ACCOUNT 930.2
INSTRUCTIONS: Provide a listing of the amount included in Account
930.2, "Miscellaneous General Expenses", classifying
such expenses according to their nature. Payments and
expenses permitted by Sections 321(b)(2) of the Federal
Election Campaign Act, as amended by Public Law 94-283
in 1976 (2 U.S.C. Section 441(b)(2)) shall be separately
classified.
DESCRIPTION AMOUNT
Corporate membership dues 48,143
Directors fees and expenses 51,052
Research & development 147,747
Financial expenses 2,363,740
Customer service public information 134,545
Cost of service studies 315,902
Miscellaneous 733,307
TOTAL 3,794,438
<PAGE>
31
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
RENTS
ACCOUNT 931
INSTRUCTIONS: Provide a listing of the amount included in Account
931, "Rents", classifying such expenses by major
groupings of property, as defined in the account
definition of the Uniform System of Accounts.
TYPE OF PROPERTY AMOUNT
Data processing equipment 3,913,132
Microwave and telecommunications equipment 1,205,065
Office space 2,421,115
Office space-affiliated 3,376,890
Office furniture and equipment 3,424,421
Office furniture and equipment-affiliated 5,838,050
Miscellaneous 13,263
TOTAL 20,191,937
<PAGE>
32
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
TAXES OTHER THAN INCOME TAXES
ACCOUNT 408
INSTRUCTIONS: Provide an analysis of Account 408, "Taxes Other Than
Income Taxes". Separate the analysis into two groups:
(1) other than U.S. Government taxes, and (2) U.S.
Government taxes. Specify each of the various kinds
of taxes and show the amount thereof. Provide a
subtotal for each class of tax.
KIND OF TAX AMOUNT
(1) Other than U.S. Government Taxes:
State unemployment tax 1,268,606
Franchise tax 7,376
State gross premium & license 4,814
Commercial rent or occupancy tax
State capitalized taxes (473,479)
General corporation tax 3,500
Payroll taxes 676,453
Local property & municipal license tax 2,739
State use tax 5,447
Other
Total Other than U. S. Government Taxes 1,495,457
(2) U.S. Government Taxes:
FICA 20,566,306
FICA capitalized taxes (7,694,040)
Federal unemployment 289,497
Federal unemployment capitalized taxes (107,624)
Total U. S. Government Taxes 13,054,139
TOTAL 14,549,596
<PAGE>
33
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
DONATIONS
ACCOUNT 426.1
INSTRUCTIONS: Provide a listing of the amount included in Account
426.1, "Donations", classifying such expenses by its
purpose. The aggregate number and amount of all
items of less than $3,000 may be shown in lieu of
details.
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
ORSANCO Environmental Stewardship 10,000
Allegheny Highland's Trail Environmental Stewardship 15,000
Regional Trail Corp Environmental Stewardship 4,000
Mon/Yough Trail Council Environmental Stewardship 5,000
Five Star Trail Chapter Environmental Stewardship 5,000
Pennsylvania Cleanways Environmental Stewardship 6,000
Friends of the Montour Trail Environmental Stewardship 7,400
Accokeek Foundation Environmental Stewardship 10,000
Mountain Watershed Association Environmental Stewardship 10,000
Westmoreland Conservation Dist. Environmental Stewardship 10,000
Nature Conservancy of W. VirginiEnvironmental Stewardship 5,300
The Horticultural Society Environmental Stewardship 10,000
Upper St. Clair Envirn.Educ.Ctr.Environmental Stewardship 10,000
Nature Conservancy-MD/DC Chap. Environmental Stewardship 5,000
Shepherd College Environ StudiesEnvironmental Stewardship 5,000
Affiliated Computer R&D Activity 3,567
Miscellaneous (43) 32,562
TOTAL 153,829
<PAGE>
34
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
OTHER DEDUCTIONS
ACCOUNT 426.5
INSTRUCTIONS: Provide a listing of the amount included in Account
426.5, "Other Deductions", classifying such expenses
according to their nature.
DESCRIPTION NAME OF PAYEE AMOUNT
Tax related penalties Various 1,598
Civic and political action Various 676,397
TOTAL 677,994
<PAGE>
35
ANNUAL REPORT OF Allegheny Energy Service Corporation
For the Year Ended December 31, 1999
SCHEDULE XVIII
NOTES TO STATEMENT OF INCOME
INSTRUCTIONS: The space below is provided for important notes
regarding the statement of income or any account
thereof. Furnish particulars as to any significant
increase in services rendered or expenses incurred
during the year. Notes relating to financial
statements shown elsewhere in this report may be
indicated here by reference.
None other than those specifically noted on various pages.
<PAGE>
36
ANNUAL REPORT OF Allegheny Power Service Corporation
ORGANIZATION CHART
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
PRESIDENT (DELIVERY BUSINESS UNIT)
VICE PRESIDENT, CUSTOMER AFFAIRS
DIRECTOR, CUSTOMER SERVICE
DIRECTOR, MARKETING
DIRECTOR, COMPETITION PHASE-IN
DIRECTOR, ENERGY PROCUREMENT
MANAGER, COMMUNICATIONS (a)
VICE PRESIDENT, SYSTEM PLANNING & OPERATIONS
DIRECTOR, ASSET MANAGEMENT
DIRECTOR, BUSINESS DEVELOPMENT
DIRECTOR, ENGINEERING & CONSTRUCTION PROJECTS
DIRECTOR, ENGINEERING SERVICES
DIRECTOR, SYSTEM OPERATIONS
DIRECTOR, TECHNOLOGY DEVELOPMENT & SUPPORT (c)
SENIOR CONSULTANT
VICE PRESIDENT, CUSTOMER OPERATIONS
DIRECTOR, OPERATIONS (6)
DIRECTOR, OPERATIONS SERVICES
DIRECTOR, OPERATIONS SUPPORT
DIRECTOR, HUMAN RESOURCES (b)
PRESIDENT (SUPPLY BUSINESS UNIT)
VICE PRESIDENT, ENERGY SUPPLY DIVISION
DIRECTOR, MARKETING SUPPORT
DIRECTOR, BUDGETS & ACCOUNTING
<PAGE>
36A
ANNUAL REPORT OF Allegheny Power Service Corporation
ORGANIZATION CHART
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER (Continued)
PRESIDENT (SUPPLY BUSINESS UNIT) (Continued)
DIRECTOR, RETAIL DIRECT SALES
DIRECTOR, RETAIL MASS MARKET
DIRECTOR, WHOLESALE SALES/OPERATIONS
VICE PRESIDENT, GENERATION
DIRECTOR, ASSET MANAGEMENT
DIRECTOR, ENGINEERING & TECHNICAL SUPPORT
DIRECTOR, FIELD SERVICES
DIRECTOR, MARKETING & FUELS
DIRECTOR, OPERATIONS
DIRECTOR, PLANNING
DIRECTOR, HUMAN RESOURCES (b)
DIRECTOR, INFORMATION MANAGEMENT(c)
PRESIDENT (ALLEGHENY VENTURES, INC.)
VICE PRESIDENT, ALLEGHENY COMMUNICATIONS CONNECT
DIRECTOR, ALLEGHENY ENERGY SOLUTIONS
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
VICE PRESIDENT AND TREASURER
DIRECTOR, REGULATION & RATES
MANAGER INVESTOR RELATIONS
DIRECTOR, CASH MANAGEMENT
DIRECTOR, CORPORATE FINANCIAL MANAGEMENT
DIRECTOR, FINANCIAL MANAGEMENT-SUPPLY (d)
VICE PRESIDENT AND CONTROLLER
DIRECTOR, FINANCIAL PROCESSING
<PAGE>
36B
ANNUAL REPORT OF Allegheny Power Service Corporation
ORGANIZATION CHART
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER (Continued)
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER (Continued)
DIRECTOR, FINANCIAL SOLUTIONS & TECHNOLOGY (c)
DIRECTOR, FINANCIAL REPORTING & BUDGETING
DIRECTOR, TAXES
BUSINESS CONTROLLER-SUPPLY (d)
BUSINESS CONTROLLER-DELIVERY (e)
VICE PRESIDENT AND Y2K PROJECT MANAGER
DIRECTOR, STRATEGIC PLANNING
DIRECTOR, AUDIT SERVICES
VICE PRESIDENT (ADMINISTRATION)
DIRECTOR, CORPORATE COMMUNICATIONS
DIRECTOR, HR - DELIVERY (f)
DIRECTOR, HR - SUPPLY (g)
DIRECTOR, EMPLOYEE RELATIONS & STRATEGIC PARTNERSHIPS
DIRECTOR, ORGANIZATIONAL DEVELOPMENT & REWARDS
DIRECTOR, EMPLOYEE SERVICE CENTER (c)
EXECUTIVE DIRECTOR, INFORMATION SERVICES
DIRECTOR, PLANNING AND PROJECTS
DIRECTOR, PRODUCTION
DIRECTOR, RESOURCE CENTER
DIRECTOR, PROCUREMENT
DIRECTOR, SYSTEM SECURITY
<PAGE>
36C
ANNUAL REPORT OF Allegheny Power Service Corporation
ORGANIZATION CHART
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER (Continued)
VICE PRESIDENT, EXTERNAL AFFAIRS
DIRECTOR, POLICY ANALYSIS
MANAGER, GOVERNMENTAL COMMUNICATIONS (a)
VICE PRESIDENT, STATE AFFAIRS
DIRECTOR, EXTERNAL AFFAIRS PROJECTS
MANAGER, FEDERAL LEGISLATIVE AFFAIRS
MANAGER, FEDERAL REGULATORY AFFAIRS
VICE PRESIDENT AND GENERAL COUNSEL
DEPUTY GENERAL COUNSEL-SUPPLY (d)
DEPUTY GENERAL COUNSEL-DELIVERY (e)
DEPUTY GENERAL COUNSEL-CORPORATE & COMPLIANCE (h)
CORPORATE SECRETARY
(a) Reports directly to Director, Corporate Communications
(b) Dotted-line relationship to Vice President, Administration
(c) Dotted-line to Executive Director, Information Services
(d) Dotted-line relationship to President, Supply
(e) Dotted-line relationship to President, Delivery
(f) Reports directly to President, Delivery
(g) Reports directly to President, Supply
(h) Dotted-line relationship to President, Allegheny Ventures
<PAGE>
37
Annual Report of ALLEGHENY ENERGY SERVICE CORPORATION
1999 METHODS OF ALLOCATION
Costs of Rendering Services:
1. The costs of rendering services by AESC include all costs of
doing business including interest on debt but excluding a
return for the use of AESC's initial equity capital of
$50,000.
2. (a) AESC maintains a separate record of the expenses for
each department. These expenses include expenses that
are directly attributable to the department, and an
appropriate portion of those expenses that are not
directly attributable to the department but which are
necessary to its operation.
(b) The aggregate of these expenses will be referred to
hereinafter as "Departmental Expenses," and such
expenses consist of salaries of officers and other
employees, employee welfare expenses (i.e., social
security taxes, life insurance, pensions, post-
retirement benefits (other than pension), medical,
dental, and other welfare expenses), expenses of
training and development of AESC employees, rents, dues
and memberships, and all other expenses attributable to,
or necessary to the operation of, the department.
(c) Departmental Expenses do not include:
(i) Those incremental out-of-pocket expenses
that are incurred for the direct benefit and
convenience of a particular Client Company or a
group of Client Companies and are to be charged
solely to such Client Company or group of Client
Companies and;
(ii) AESC Overhead Expenses. Such
expenses include, among others, costs of maintaining
the corporate existence of AESC, taxes, and other
expenses, such as outside auditing and legal fees.
3. (a) Employees in each department are divided into two
groups:
(i) Employees directly engaged in rendering
services to Client Companies or to AESC.
(ii) Secretaries, clerical, office service and
other employees, who are not engaged directly in
rendering services to Client Companies or to AESC.
<PAGE>
37A
Annual Report of ALLEGHENY POWER SERVICE CORPORATION
METHODS OF ALLOCATION
(b) Employees directly engaged in rendering services to
Client Companies or to AESC maintain records showing
time employed in rendering services, nature of services
rendered, and identity of companies or groups of
companies served. Support staff expenses are billed
based on the billings of employees directly engaged in
rendering services for the respective department.
Allocation Factors
4. (a) Delivery and Supply Allocation Factor
(i) Departmental and incremental out-
of-pocket expenses expended for a group of
Operating Companies are allocated to each
Operating Company in the group based on the
ratio that the Allocation Factor of such
Operating Company, determined as
hereinafter provided, bears to the total of
the Allocation Factors of all the Operating
Companies in such group.
(ii) The Allocation Factor applicable to
an Operating Company during any year is the average
of the quotients of:
(1) The total expenses of such Operating
Company (excluding costs of power purchased
from other utilities and fuel costs) charged to
Operating and Maintenance Expense Accounts
under the Uniform System of Accounts prescribed
for Public Utilities and Licensees subject to
the provisions of the Federal Power Act for the
same three-year period divided by the total of
such expenses of all Operating Companies for
the same period;
(2) The total number of kwhs sold by such
Operating Company to regular customers (excluding
other Operating Companies) during the same three-
year period divided by the total number of kwhs so
sold by all Operating Companies during the three
years; and
<PAGE>
37B
Annual Report of ALLEGHENY POWER SERVICE CORPORATION
METHODS OF ALLOCATION
(3) The sum of the total amounts of electric
plant in service on the books of such Operating
Company (less reserves for depreciation and
amortization) at the close of each of the three years
immediately preceding the current year divided by the
sum of the total amounts of electric plant in service
(less reserves for depreciation and amortization) on
the books of all Operating Companies at the close of
each of such three years.
(4) If the use of the aforesaid bases of
allocation results in inequity, the bases of allocation
are adjusted so as to effect a more equitable
distribution of group service charges based upon more
appropriate functional relationships between the services
rendered and the allocation formula employed.
(b) Delivery Allocation Factor
(i) Departmental and incremental out-
of-pocket expenses expended for a group of
Operating Companies are allocated to each
Operating Company in the group based on the
ratio that the Allocation Factor of such
Operating Company, determined as
hereinafter provided, bears to the total of
the Allocation Factors of all the Operating
Companies in such group.
(ii) The Allocation Factor applicable to
an Operating Company during any year is the average
of the quotients of:
(1) The total expenses of such Operating
Company (excluding costs of power purchased
from other utilities and fuel costs) charged to
Operating and Maintenance, Transmission and
Distribution, Expense Accounts under the
Uniform System of Accounts prescribed for
Public Utilities and Licensees subject to the
provisions of the Federal Power Act for the
same three-year period divided by the total of
such expenses of all Operating Companies for
the same period;
(2) The total number of kwhs sold by such
Operating Company to regular customers (excluding
other Operating Companies) during the same three-
year period divided by the total number of kwhs so
sold by all Operating Companies during the three
years; and
<PAGE>
37C
Annual Report of ALLEGHENY POWER SERVICE CORPORATION
METHODS OF ALLOCATION
(3) The sum of the total amounts of electric plant; related to
transmission and distribution, in service on the books of such
Operating Company (less reserves for depreciation and
amortization) at the close of each of the three years
immediately preceding the current year divided by the sum of
the total amounts of electric plant in service (less reserves
for depreciation and amortization) on the books of all
Operating Companies at the close of each of such three years.
(4) If the use of the aforesaid bases of allocation results in
inequity, the bases of allocation are adjusted so as to effect
a more equitable distribution of group service charges based
upon more appropriate functional relationships between the
services rendered and the allocation formula employed.
(c) All System Companies Allocation Factor
(i) Departmental and incremental out-of-pocket expenses expended
for a group which includes all AE system companies (excluding
AESC) are allocated among the Client Companies on the basis of
the average of the prior three years' direct costs charged by
AESC to each Client Company.
(d) Power Station Allocation Factor
(i) The Allocation Factor applicable to AESC
employees who provide services to Client Companies'
Power Stations during any year is based upon the
generating capacity of each power station divided by
the System total generating capacity. One
additional summary level allocation factor will be
derived from the Power Station allocation Factor to
allocate the costs to the specific Supply companies
instead of allocating the costs down to the specific
power stations. This will be based on the ownership
of the stations, including the ownership percentages
for the joint stations.
<PAGE>
37D
Annual Report of ALLEGHENY POWER SERVICE CORPORATION
METHODS OF ALLOCATION
(e) AESC Corporate Allocation Factor
(i) Overhead Expenses (as defined in Section
2.(c)(ii) above) and cost of services rendered to
AESC are distributed among Client Companies in
direct proportion to the amounts of Departmental
Expenses charged to or allocated to such companies,
as described in Sections 5.(a)(b)(c) above,
respectively.
(f) Direct Assignment Allocation Factor
(i) This applies to other allocations that are
100% assigned to a specific company or station.
5. The total cost of a particular service rendered to a
specified Client Company is the sum of the Departmental
Expenses, Overhead Expenses, cost of services rendered to
AESC, and incremental Out-of-Pocket Expenses which are
applicable to such Company in respect of such service.
6. The total cost of a particular service rendered to a specific
group of Client Companies is the sum of the amounts of the
Departmental Expenses, Overhead Expenses, costs of services
rendered to AESC, and incremental Out-of-Pocket Expenses
which are applicable to such group of companies in respect of
such service.
7. Whenever the charges to individual Customer Companies for
services rendered are based upon estimates of AESC's costs,
such service charges are adjusted to actual cost at the end
of each year, as required by the terms of Rule 90(a)(2)
promulgated under the 1935 Act.
<PAGE>
38
ANNUAL REPORT OF Allegheny Power Service Corporation
ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED
None.
<PAGE>
39
ANNUAL REPORT OF Allegheny Power Service Corporation
SIGNATURE CLAUSE
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935 and the rules and regulations of
the Securities and Exchange Commission issued thereunder, the
undersigned company has duly caused this report to be signed on
its behalf by the undersigned officer thereunto duly
authorized.
Allegheny Energy Service Corporation
(Name of Reporting Company)
By: /s/ Thomas J. Kloc
(Signature of Signing Officer)
Thomas J. Kloc, VP & Controller
(Printed Name and Title of Signing Officer)
Date: April 7, 1999
<TABLE> <S> <C>
<ARTICLE> OPUR2
<LEGEND>
Allegheny Energy Service Corporation
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<BOOK-VALUE> PER-BOOK
<NET-SERVICE-COMPANY-PROPERTY> 6,491,732
<TOTAL-INVESTMENTS> 0
<TOTAL-CURRENT-ASSETS> 70,787,345
<TOTAL-DEFERRED-DEBITS> 39,171,640
<OTHER-ASSETS-AND-DEBITS> 0
<TOTAL-ASSETS-AND-DEBITS> 116,450,717
<TOTAL-PROPRIETARY-CAPITAL> 50,000
<TOTAL-LONG-TERM-DEBT> 258,637
<NOTES-PAYABLE> 0
<NOTES-PAYABLE-ASSOCIATE-COMP> 0
<OTHER-CURR-AND-ACCRUED-LIAB> 60,328,558
<TOTAL-DEFERRED-CREDITS> 55,813,522
<DEFERRED-INCOME-TAX> 0
<TOT-LIABIL-AND-PROPRIET-CAP> 116,450,717
<SERVICES-ASSOCIATE-COMPANIES> 456,610,036
<SERVICES-NON-ASSOCIATE-COMP> 0
<MISC-INCOME-OR-LOSS> 0
<TOTAL-INCOME> 456,610,036
<SALARIES-AND-WAGES> 46,748,245
<EMPLOYEE-PENSION-AND-BENEFIT> 36,807,281
<OTHER-EXPENSES> 373,054,510
<TOTAL-EXPENSES> 456,610,036
<NET-INCOME> 0
<TOTAL-EXPENSES-DIRECT-COST> 456,610,036
<TOTAL-EXPENSES-INDIRECT-COST> 0
<TOT-EXP-DIRECT-AND-INDIRECT> 456,610,036
<PERSONNEL-END-OF-YEAR> 5,093
</TABLE>
