<PAGE>
File Nos. 69-362
69-412
69-419
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-3A-2
Statement by Holding Company Claiming Exemption under
Rule U-3A-2 from the Provisions of the Public Utility
Holding Company Act of 1935
To Be Filed Annually prior to March 1
DQE, Inc.
(File No. 69-362),
Duquesne Enterprises, Inc.
(File No. 69-412)
and
DQE Energy Services, Inc.
(File No. 69-419)
(Name of Companies)
For the year ended December 31, 1998
Each of DQE, Inc.; Duquesne Enterprises, Inc.; and DQE Energy Services,
Inc.; hereby files with the Securities and Exchange Commission, pursuant to Rule
2, its statement claiming exemption as a holding company from the provisions of
the Public Utility Holding Company Act of 1935 (the "Act"), and submits the
following information:
ITEM 1. Name, State of organization, location and nature of business of
claimant and every subsidiary thereof, other than any exempt wholesale
generator ("EWG") or foreign utility company in which claimant
directly or indirectly holds an interest.
DQE, Inc. ("DQE"); Duquesne Enterprises, Inc. ("DE"); and DQE Energy
Services, Inc. ("DES") are public utility holding companies incorporated in the
Commonwealth of Pennsylvania. DQE is not engaged in any business independent of
that conducted through its subsidiaries. DQE has eight wholly owned
subsidiaries: Duquesne Light Company ("Duquesne Light"); AquaSource, Inc.
(AquaSource); DE; DES; DQEnergy Partners, Inc. ("DQEnergy Partners"); Montauk,
Inc. ("Montauk"); DQE Capital Corporation ("DQE Capital") and Brighter Light
Corporation ("Brighter Light").
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(1) Duquesne Light and Subsidiaries. Duquesne Light is a public utility
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company as defined by the Pennsylvania Public Utility Code and the Public
Utility Holding Company Act of 1935 ("PUHCA"). Duquesne Light is engaged in the
generation, transmission, distribution and sale of electric energy and serves an
area of approximately 800 square miles, which includes the City of Pittsburgh
and municipalities in Allegheny, Beaver and, to a limited extent, Westmoreland
Counties, Pennsylvania. The population of the area served by Duquesne Light,
based on 1990 census data, is approximately 1,510,000, of which 370,000 reside
in the City of Pittsburgh. At December 31, 1998, Duquesne Light had 3,358
employees, including 1,157 employees at its Beaver Valley Power Station.
Duquesne Light and four other electric utilities serving western Pennsylvania
and northern and central Ohio have provided for the construction of jointly-
owned base load generating units and for coordination in the operation of their
respective electrical systems.
Duquesne Light has one wholly owned subsidiary, Monongahela Light & Power
Company, which is registered to do business as Duquesne Ventures ("DV"). DV has
three wholly owned subsidiaries: Diemen-Flevo Co. ("Diemen-Flevo"); Oakridge
Resources, Inc. ("Oakridge Resources"); and EnviroGas Recovery, Inc.
("EnviroGas"). Duquesne Light is also the general partner of Duquesne Capital
Limited Partnership ("Duquesne Capital L.P.").
Diemen-Flevo is engaged in making investments to accumulate funds for the
decommissioning of fossil-fueled power stations. Diemen-Flevo is the beneficial
owner of the Diemen-Flevo Trust, which is a party to financial transactions
involving certain commercial equipment leases, including the sale and lease-back
of non-voting, non-controlling interests in two generating facilities in the
Netherlands. The subject lease transactions are passive investments which
generate certain tax benefits.
Oakridge Resources is engaged in the leasing of coal properties to an
unaffiliated construction and mining company. Oakridge Resources also owns a 50
percent joint venture interest in Laurel Ventures, which interest was acquired
as consideration for contributing certain coal properties owned by DQE. Laurel
Ventures is engaged in the sale and marketing of coal.
EnviroGas is engaged in gathering, processing and selling coal bed methane
gas on a wholesale basis to gas pipeline companies. EnviroGas has acquired the
rights to the methane gas and has entered into agreements with the owners of the
real property containing the coal beds to collect such gas. In addition,
through its 100 percent membership interest in LFG Capital, L.L.C., EnviroGas is
also engaged in landfill gas recovery projects in Pennsylvania.
Duquesne Light, DV, Oakridge Resources and EnviroGas are organized under
the laws of Pennsylvania. Duquesne Capital L.P., Diemen-Flevo and LFG Capital,
L.L.C. are organized under the laws of Delaware.
(2) AquaSource and Subsidiaries. AquaSource is a water resource
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management company that acquires, develops and manages water and wastewater
utility companies. AquaSource has six wholly owned subsidiaries: AquaSource
Utility, Inc.; AquaSource Services and Technologies, Inc.; AquaSource
Engineering and Construction, Inc.; The Reynolds Group; Polaris Water Company
Inc.; and Pure Water Corporation.
AquaSource Utility, with its subsidiaries, owns utility assets and holds
investments in regulated utility companies. AquaSource Utility has 36 wholly
owned subsidiaries: Altex Environmental Corporation; AquaSource/CB, Inc.;
AquaSource/DWC, Inc.; AquaSource/GWS, Inc.; Aqua Source/H2M, Inc.;
AquaSource/HCUW, Inc.; AquaSource/IWS, Inc.; AquaSource/S&B, Inc.; Arrendondo
Utility Company, Inc.; AquaSource Utility-North Carolina, Inc.; AquaSource
Utility-Pennsylvania, Inc.; Britmore Utility, Inc.; Brookside Sewer District,
Inc.; Brushy Creek Utility, Inc.; Buffalo Creek Utility, Inc.; Candlelight
Service Company; Creekside Utilities, Inc.; Crystal River Utilities, Inc.;
Forest Water and Sewer Service Corporation; Industrial Utilities Service, Inc.;
Jasmine Lakes Utilities Corp.; Lake
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Palestine Water Company; Lake Vista Utility Company; Lakeside Utilities, Inc.;
Leisurewoods Water Company; Meadow Woods Water Supply, Inc.; Peek Road
Utilities, Inc.; Pine Trails Utility Co., Inc.; Redwood Utilities, Inc.;
Rivercrest Water Systems, Inc.; Shady Hollow Estates Water Supply Corporation;
Suburban Austin Water Systems, Inc.; Western Hills Water System, Inc.; Wild Oaks
Water Company, Inc.; Williams Water Company; and Woodcreek Utilities, Inc.
Lakeside Utilities has two wholly owned subsidiaries: Sandy Creek Utilities,
Inc. and Tal/Tex, Inc.
AquaSource Services and Technologies, with its subsidiaries, employs the
operational personnel and performs the daily operations and management for
AquaSource utility and for third party water and wastewater systems. AquaSource
Services and Technologies has 10 wholly owned subsidiaries: AquaSource/AU,
Inc.; AquaSource/HCUC, Inc.; AquaSource/MMS, Inc.; AquaSource/TEE, Inc.;
Associated Water Services, Inc.; Lab-Tech Corporation; Muniservice Corporation;
Teb-Co Services, Inc.; Water Management Services of Missouri, Inc.; and Water
Quality Management. AquaSource/MMS has one wholly owned subsidiary: AquaSource
Operations Services, Inc.
AquaSource Engineering and Construction, with its subsidiaries, fabricates
new facilities and performs major repairs for the water operations. AquaSource
Engineering and Construction has six wholly owned subsidiaries: AquaSource/B&S,
Inc.; AquaSource/H2M Construction, Inc.; AquaSource/Whisenant, Inc.; AquaSource
Development Company; Brune Pump Company; and Quindaro Enterprises, Inc.
The Reynolds Group, with its subsidiaries, owns water and wastewater
facilities, operates such facilities for third parties, and designs and builds
water and wastewater facilities. The Reynolds Group has five wholly owned
subsidiaries: Capitol Engineering, Inc.; Indiana Water Infrastructure Group,
Inc.; Reynolds Construction Management, Inc.; Reynolds International, Inc.; and
Reynolds Operations Corporation. Indiana Water Infrastructure Group has six
wholly owned subsidiaries: Country View Sewage Plant Inc.; Chimney Wood Sewage
Works, Inc.; Wastewater One, LLC; Water One, Inc.; Wildwood Shores Utilities
Corp; and Wymberley Sanitary Works, Inc. The Reynolds Group also owns an 80
percent limited liability company interest in Hendricks County Wastewater, LLC.
Each of Polaris Water Company and Pure Water Corporation produces and sells
bottled water.
AquaSource is organized under the laws of Delaware. AquaSource Utility and
29 of its subsidiaries are organized under the laws of Texas. Arrendondo
Utility Company, Crystal River Utilities and Jasmine Lake Utilities are
organized under the laws of Florida. AquaSource Utility-North Carolina,
AquaSource Utility-Pennsylvania, Brookside Sewer District and Wild Oaks Water
Company are organized, respectively, under the laws of North Carolina,
Pennsylvania, South Carolina and New York. AquaSource Services and Technologies
and its subsidiaries are organized under the laws of Texas except for Associated
Water Services, Water Management Services of Missouri and Water Quality
Management, which are organized, respectively, under the laws of Connecticut,
Missouri and Colorado. AquaSource Engineering and Construction and all its
subsidiaries are organized under the laws of Texas. The Reynolds Group and all
its subsidiaries are organized under the laws of Indiana. Polaris Water
Company is organized under the laws of British Columbia, Canada. Pure Water
Corporation is organized under the laws of Washington.
(3) DE and Subsidiaries. DE is building businesses in the energy services
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and technologies and electronic commerce industries, and in communications. DE
has five wholly owned subsidiaries: Allegheny Development Corporation ("ADC");
Property Ventures, Ltd. ("Property Ventures"); JLK Technology, Inc. ("JLK"); On-
Demand Energy, Inc. ("On-Demand"); and Keystone Power Services, Inc.
("Keystone").
ADC owns the energy facilities for the Pittsburgh International Airport.
ADC is not a public utility company for purposes of the Pennsylvania Public
Utility Code. DQE has, however, elected to treat
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ADC as an electric utility company for purposes of the PUHCA. See DQE, Inc.,
Holding Co. Act Release No. 26257 (Mar. 24, 1995) (authorizing the acquisition
of ADC under Sections 9(a)(2) and 10 of the Act). ADC's utility operations,
which are located within the service territory of Duquesne Light, are currently
integrated with those of Duquesne Light.
Property Ventures owns and develops real estate in southwestern
Pennsylvania.
JLK was formed to hold a 50 percent limited partnership interest in Kommco,
L.P., a joint venture formed with ITRON, Inc. to offer wireless communications
for regional monitoring and control services.
On-Demand markets energy-related products such as demand controls and
energy-efficient lighting.
Keystone holds a 50 percent interest in Control Solutions, LLC, a
commercial and industrial heating, ventilation and air conditioning service and
energy controls company.
DE owns 40 percent of the voting securities of Lab Cor, Inc., which
provides inorganic air analytical laboratory services. DE also owns
approximately 25 percent of the voting securities of Recra Environmental
("Recra"), which provides environmental testing and measurement services. DE
also owns approximately 14 percent of the voting securities of BroadPoint
Communications, Inc., which markets set FreeWay/SM/ advertiser-sponsored long
distance telephone service. DE also owns 19 percent of the voting securities of
North American Power Brokers, Inc., which provides a low-bid Internet auction
based approach to purchasing natural gas and electricity through its own
website.
DE, ADC, Property Ventures, Keystone and On-Demand are organized under the
laws of Pennsylvania. BroadPoint Communications, JLK, Kommco and North American
Power Brokers are organized under the laws of Delaware. Recra is organized
under the laws of New York. Lab Cor, Inc. is organized under the laws of
Oregon. Control Solutions is organized under the laws of Ohio.
(4) DES and Subsidiaries. DES is a diversified energy services company
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offering a wide range of energy solutions for industrial, utility and consumer
markets worldwide. DES initiatives include energy facility development and
operation, domestic and international independent power production and the
production and supply of innovative fuels. DES has six wholly owned
subsidiaries: DQE Power International, Inc. ("Power International"); Duquesne
Energy, Inc. ("DEN"); DH Energy, Inc. ("DH Energy"); MT Energy, Inc. ("MT
Energy"); DH Canada, Inc. ("DH Canada"); and Monmouth Energy, Inc. ("Monmouth"),
which is an EWG and discussed in Item 4 below.
Power International was initially formed to pursue power projects in
selected international markets, and has eight wholly owned subsidiaries:
ElectroGen International-DQE Power Limited, ElectroGen International-DQE Power
Gamma Limited, ElectroGen International-DQE Power Delta Limited, ElectroGen
International-DQE Power Epsilon Limited, ElectroGen International-DQE Power
Quang Ninh Limited, ElectroGen International-DQE Power Quang Ninh B.V., DQE
Energy Limited and DQE Energy Two Limited. Power International also owns a 50%
interest in ElectroGen International, L.L.C., which in turn has one wholly owned
subsidiary, ElectroGen International Limited, which were formed to identify and
develop project opportunities in Asia and the Pacific rim.
ElectroGen International-DQE Power Limited owns a 50 percent joint-venture
interest in ElectroGen Maveli Limited, which was formed to develop power
projects in Pakistan and India. ElectroGen International-DQE Power Gamma
Limited, ElectroGen International-DQE Power Delta Limited and ElectroGen
International-DQE Power Epsilon Limited were formed to develop power projects
outside the United States. ElectroGen International-DQE Power Quang Ninh
Limited owns a 50 percent joint-venture interest in ElectroGen Quang Ninh Sdn.
Bhd., and these two companies, together
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with ElectroGen International-DQE Power Quang Ninh B.V. were formed to develop
power projects in Vietnam. DQE Energy and DQE Energy Two own, respectively, 99
percent and one percent limited liability company interests in DQE Energy do
Brasil, a now inactive company originally formed to develop a recently
terminated transaction in Brazil.
Although Power International and its subsidiaries were originally formed to
pursue international power projects, none currently has active operations.
DEN produces E-Fuel/R/, a coal-based synthetic fuel. DEN is also engaged
in developing fuel and fuel-related technologies.
DH Energy agreed with Heinz U.S.A. to provide energy services to the Heinz
factory complex in Pittsburgh, Pennsylvania. DQE has elected to treat DH Energy
as an electric utility company for purposes of the PUHCA. See DQE, Inc.,
Holding Co. Act Release No. 26728 (June 10, 1997) (authorizing the acquisition
of DH Energy). The utility operations of DH Energy are currently integrated
with those of Duquesne Light.
MT Energy agreed to operate the Pittsburgh Airport facilities pursuant to
an operating and maintenance agreement with ADC. DQE has elected to treat MT
Energy as an electric utility company for purposes of the PUHCA. See DQE, Inc.,
Holding Co. Act Release No. 26728 (June 10, 1997). The utility operations of MT
Energy are currently integrated with those of Duquesne Light.
DH Canada agreed with H.J. Heinz Company of Canada Ltd. to provide steam,
compressed air and operations and maintenance services to the Heinz factory
complex in Leamington, Ontario.
DES, DEN, MT Energy and DH Energy are organized under the laws of
Pennsylvania. Power International and ElectroGen International, L.L.C., are
organized under the laws of Delaware. DH Canada is organized under the laws of
New Brunswick, Canada. ElectroGen International-Quang Ninh Limited, ElectroGen
International-DQE Power Limited, ElectroGen International Limited, ElectroGen
International-DQE Power Gamma Limited, ElectroGen International-DQE Power Delta
Limited, ElectroGen International-DQE Power Epsilon Limited, DQE Energy and DQE
Energy Two are organized under the laws of the Cayman Islands. ElectroGen
International-DQE Power Quang Ninh B.V. is organized under the laws of The
Netherlands. ElectroGen Maveli is organized under the laws of Mauritius.
ElectroGen Quang Ninh Sdn. Bhd. is organized under the laws of Malaysia. DQE
Energy do Brasil is organized under the laws of Brazil.
(5) DQEnergy Partners and Subsidiaries. DQEnergy Partners is working with
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a wide range of gas, electricity and telecommunications distribution system
owners to help them better meet the needs of their customers and communities.
DQEnergy Partners has two wholly owned subsidiaries: DQE Communications, Inc.
and Secure Energy, Inc.
DQE Communications owns a 49 percent general partnership interest in
Pittsburgh Fiber, a joint venture with a telecommunications company to provide
certain telecommunications services in the Pittsburgh area, and to construct,
own, operate and maintain a fiber optic-based digital transmission network for
the provision of such services.
Secure Energy conducts marketing initiatives on behalf of DQEnergy Partners
and its affiliate companies. The activities of Secure Energy are intended to
ensure that DQE's investments are fully utilized and presented to customers as a
single branded package on a regional basis and, with strategic partners, on a
national basis. Secure Energy aggregates a mix of products offered by DQE's
non-utility affiliates (e.g., demand controls, energy-efficient lighting and the
WeatherProof Bill/SM/) and others, combining them into a single product package
for DQE delivery system customers.
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DQEnergy Partners owns a 50 percent interest in WeatherWise USA LLC, which
markets weather-related services throughout the country. Such weather-related
services include, for example, the WeatherProof Bill/SM/, which allows customers
to pay a predetermined, guaranteed amount for their annual energy usage,
regardless of the variation in the weather.
DQEnergy Partners, DQE Communications, Secure Energy and Pittsburgh Fiber
are organized under the laws of Pennsylvania. WeatherWise USA is organized
under the laws of Delaware.
(6) Montauk and Subsidiaries. Montauk makes long-term investments in
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affordable housing projects, sale/leasebacks, lease/leasebacks and investments
in alternative energy.
Montauk has two wholly owned subsidiaries: (i) Bushton Company
("Bushton"), which holds various investments and acts as general partner in
certain limited partnerships, and (ii) Monticello Corporation. Monticello
Corporation is the one percent general partner of Monticello Leasing L.P.
("Monticello L.P."), which is the beneficial owner of an unnamed trust (the
"Monticello L.P. Trust"), with Fleet National Bank of Connecticut as Trustee.
The Monticello L.P. Trust holds legal title to a bucket wheel excavator and
cross-pit spreader in a transaction involving a sale and leaseback to Texas
Utilities Mining Company ("Texas Utilities").
Bushton has the following wholly owned subsidiaries:
- Monticello Two Corporation ("Monticello Two"), which is the 99 percent
limited partner of Monticello L.P. Monticello Corporation, a direct
subsidiary of Montauk as discussed above, is the general partner of
Monticello L.P.
- Carthage Field Corporation ("Carthage"), which holds approximately 42
percent of the beneficial interest in Seagull Series 1995 Trust, a
Delaware business trust which owns certain interests in oil and gas
investments. These interests are nonvoting and noncontrolling.
- Utrecht Company ("Utrecht"), which holds the sole beneficial interest
in UNA Facility Trust No. 2, with the Wilmington Trust Company as
Trustee. The UNA Facility Trust No. 2 is a party to a financial
transaction involving the lease and leaseback of nonvoting,
noncontrolling interests in a generating facility in the Netherlands
known as Hemwegcentrale Unit 8.
- Schiphol Corporation ("Schiphol"), which holds the sole beneficial
interest in the UNA Facility Trust No. 5, with the Wilmington Trust
Company as Trustee. The UNA Facility Trust No. 5 is a party to a
financial transaction involving the lease and leaseback of nonvoting,
noncontrolling interests in Hemwegcentrale Unit 8.
- Alkmaar, Inc. ("Alkmaar"), which is the sole beneficiary of the HVC
Facility Trust No. 3 ("HVC Trust"), with the Wilmington Trust Company
as Trustee. The HVC Trust is a party to certain financial
transactions involving the lease and leaseback of nonvoting,
noncontrolling interests in a waste-to-energy facility located in the
Netherlands.
- Amagansett, Inc. ("Amagansett"), which owns certain passive limited
liability company interests in landfill gas recovery investments.
Amagansett also owns 100 percent of the voting securities of Pigeon
Point LFG, Inc. and a 99 percent limited liability company interest in
COP LFG, LLC, both of which make passive investments in landfill gas
recovery projects. Amagansett also owns a 50 percent limited
liability company interest in Fresh Gas LLC ("Fresh Gas"), which is
involved in the collection and sale of landfill gas to a single
utility customer on a wholesale basis.
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- Maasvlakte Corporation ("Maasvlakte"), which holds the beneficial
interest in EZH Facility Trust No. 1997 A-3 and EZH Facility Trust No.
1997 A-6 (together, the "EZH Trusts"), with the Wilmington Trust
Company as Trustee. The EZH Trusts are party to certain financial
transactions involving the lease and leaseback of nonvoting,
noncontrolling interests in a power facility in the Netherlands.
- Holyhead Corp. ("Holyhead"), which holds the beneficial interest in
Stena Explorer Trust 1997-A ("Explorer Trust"), with the Wilmington
Trust Company as Trustee. The Explorer Trust is party to certain
financial transactions involving the lease and leaseback of nonvoting,
noncontrolling interests in HSS Stena Explorer, a high-speed ferry
that runs across the Irish Sea. Holyhead also holds a beneficial
interest in Stena Voyager Trust 1997-A ("Voyager Trust"), with the
Wilmington Trust Company as Trustee. The Voyager Trust is party to
certain financial transactions involving the lease and leaseback of
nonvoting, noncontrolling interests in HSS Stena Voyager, another
high-speed ferry that runs across the Irish Sea.
- Diemen No. 33 Corporation ("Diemen No. 33"), which holds the
beneficial interest in UNA Diemen 33 Trusts Nos. 1 and 2, with the
Wilmington Trust Company as Trustee. The trusts are party to certain
financial transactions involving the lease and leaseback of nonvoting,
noncontrolling interests in a power facility in the Netherlands.
- Liberation I, LLC, which holds the sole beneficial interest in CLI
Equipment Trust No. 1, CLI Equipment Trust V and CLI Equipment Trust
VII. The trusts are party to certain financial transactions involving
the lease and leaseback of computer equipment and municipal equipment.
Bushton owns a one percent limited liability company interest in COP LFG,
LLC, described above.
Bushton is also the general partner of several limited partnerships which,
in turn, are limited partners in the following limited partnerships that invest
in affordable housing: Bushton BCP Investment Partnerships I-VI, L.P.
(collectively, "Bushton BCP L.P."); Bushton BFG Investment Partnerships I-IV,
L.P. (collectively, "Bushton BFG L.P."); and Bushton TRG Investment Partnerships
I-V, L.P. (collectively, "Bushton TRG L.P.").
Bushton is general partner in Bushton ECH Investment Partnership I, L.P.,
which in turn is the managing member of Bushton Acquisition LLC. Bushton
Acquisition is a limited partner in various limited partnerships that invest in
affordable housing.
Bushton is also the sole beneficiary under a business trust that was formed
to facilitate certain financial transactions, the Bushton Equipment Trust 1991-
D, with First Chicago National Bank as Trustee. The Bushton Equipment Trust
1991-D holds an undivided interest with four other trusts in a natural gas plant
in Kansas that is leased to Enron Corporation.
Bushton is also a limited partner in limited partnerships that invest in
affordable housing, oil and gas and waste-to-energy facilities. Because these
limited partnership interests in affordable housing, oil and gas and waste-to-
energy facilities are nonvoting and noncontrolling, the subject limited
partnerships are not subsidiaries of DQE within the meaning of the PUHCA. In
addition, Bushton has title to certain railroad cars that are leased to
Occidental Petroleum.
Montauk, Bushton, Monticello Corporation, Monticello L.P., Monticello Two,
Carthage, Utrecht, Schiphol, Alkmaar, Amagansett, Maasvlakte, Holyhead, Diemen
No. 33, COP LFG, Liberation I, Pigeon
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Point and Bushton Acquisition are organized under the laws of Delaware. Fresh
Gas is organized under the laws of New York.
(7) DQE Capital Corporation. DQE Capital was formed in April 1999 as a
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Delaware corporation, and is a financial services company that will provide
financing for DQE and its affiliates.
As of December 31, 1998, DV, Duquesne Capital L.P., and Brighter Light did
not have active operations.
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ITEM 2. Properties
None of DQE, DE or DES owns any properties used for the generation,
transmission and distribution of electric energy for sale, or for the
production, transmission and distribution of natural or manufactured gas.
Duquesne Light anticipates divesting its generation-related property
through an auction and through a power station exchange with FirstEnergy
Corporation. More information regarding the divestiture is set forth in DQE's
Annual Report on Form 10-K for the year ended December 31, 1998.
The principal properties of Duquesne Light consist of electric generating
stations, transmission and distribution facilities and supplemental properties
and appurtenances, comprising as a whole an integrated electric utility system,
located substantially in Allegheny and Beaver counties in southwestern
Pennsylvania. Duquesne Light owns all or a portion of the following generating
units, except its interest in Beaver Valley Unit No. 2, which is leased.
<TABLE>
<CAPTION>
Duquesne Light's Share of Net Plant Output
Net Demonstrated Capability Year Ended
December 31, 1998 December 31, 1998
Name and Location Type (Megawatts) (Megawatt-hours)
- ------------------------------------ ------------- --------------------------------- ---------------------
Summer Winter
---------------- ---------------
<S> <C> <C> <C> <C>
Cheswick Coal 562 570 2,294,365
Springdale, PA
Elrama Coal 474 487 2,326,506
Elrama, PA
Sammis Unit 7 (1) Coal 187 187 1,363,910
Stratton, OH
Eastlake Unit 5 (1) Coal 186 186 989,035
Eastlake, OH
Beaver Valley Unit 1 (1) Nuclear 385 385 1,328,159
Shippingport, PA
Beaver Valley Unit 2 (1) Nuclear 113 113 244,879
Shippingport, PA
Perry Unit 1 (1) Nuclear 161 164 1,400,345
North Perry, OH
Bruce Mansfield Unit 1 (1) Coal 228 228 1,344,605
Shippingport, PA
Bruce Mansfield Unit 2 (1) Coal 62 62 287,293
Shippingport, PA
Bruce Mansfield Unit 3 (1) Coal 110 110 604,720
Shippingport, PA
Brunot Island Oil 166 178 5,740
Brunot Island, PA ----- ----- ----------
Total 2,634 2,670 12,189,557
===== ===== ==========
</TABLE>
__________________________
(1) Amounts represent Duquesne Light's share of the unit which is owned by
Duquesne Light in common with one or more other electric utilities (or, in
the case of Beaver Valley Unit 2, leased by Duquesne Light).
Duquesne Light owns 24 transmission substations (including interests in
common in the step-up transformers at Sammis Unit 7, Eastlake Unit 5, Beaver
Valley Unit 1, Beaver Valley Unit 2, Perry Unit 1, Bruce Mansfield Unit 1, Bruce
Mansfield Unit 2 and Bruce Mansfield Unit 3) and 562
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distribution substations. Duquesne Light has 714 circuit-miles of transmission
lines, comprised of 345,000, 138,000 and 69,000 volt lines. Street lighting and
distribution circuits of 23,000 volts and less include approximately 50,000
miles of lines and cable.
Duquesne Light owns, but does not operate, the Warwick Mine, including
4,849 acres owned in fee of unmined coal lands and mining rights, located on the
Monongahela River in Greene County, Pennsylvania.
Substantially all of Duquesne Light's properties are subject to a mortgage
lien of an Indenture of Mortgage and Deed of Trust dated as of April 1, 1992.
Certain pollution control facilities are subject to an additional mortgage lien.
The principal properties of ADC consist of heating and chilling facilities
and, to a limited extent, electrical facilities, consisting of one busduct and
three unitized capacitors, comprising as a whole a total energy services
facility to provide hot water, chilled water and electric energy to the
Pittsburgh International Airport, located in Allegheny County in southwestern
Pennsylvania.
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ITEM 3. Electric energy sold, purchased and distributed.
None of DQE, DE or DES sold, distributed or purchased (except for its own
use) any kwh of electric energy during 1998.
(a) During 1998, Duquesne Light sold to customers 12,690,007,459 kwh of
electric energy at retail and no kwh of electric energy at wholesale,
with associated revenues of approximately $1,072.4 million. During
1998, Duquesne Light sold to other utilities 1,909,342 kwh of electric
energy at wholesale, with associated revenues of approximately $36.2
million. During 1998, ADC sold 89,895,043 kwh of electric energy at
retail to a single customer, the County of Allegheny. During 1998, DH
Energy sold 20,114,000 kwh of electric energy at retail to a single
customer, Heinz USA. Although treated as an electric utility under
the PUHCA, MT Energy only operates the airport energy facility owned
by ADC, and did not sell any electric energy at wholesale or retail
during 1998.
(b) During 1998, none of Duquesne Light, ADC, MT Energy or DH Energy sold
at retail any electric energy outside the Commonwealth of
Pennsylvania, the jurisdiction in which Duquesne Light, ADC, MT Energy
and DH Energy are incorporated.
(c) During 1998, Duquesne Light sold at wholesale 606,266,000 kwh of
electric energy outside the Commonwealth of Pennsylvania or at the
Commonwealth line, with associated revenues of approximately $12.2
million. During 1998, none of ADC, DH Energy or MT Energy sold, or
had the ability to sell, at wholesale, any electric energy outside the
Commonwealth of Pennsylvania or at the Commonwealth line.
(d) During 1998, Duquesne Light purchased 1,187,867,000 kwh of electric
energy outside the Commonwealth of Pennsylvania or at the Commonwealth
line, with associated expenses of approximately $44.7 million. During
1998, none of ADC, DH Energy or MT Energy purchased any electric
energy outside the Commonwealth of Pennsylvania or at the Commonwealth
line.
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ITEM 4. Information for the reporting period with respect to claimant and each
interest it holds directly or indirectly in an EWG or a foreign
utility company, stating monetary amounts in United States dollars.
(a) DE holds no interest directly or indirectly in an EWG or a
foreign utility company. DQE and DES hold no interest directly
or indirectly in a foreign utility company.
Monmouth Energy, Inc. ("Monmouth") is the sole EWG within the DQE
system, and is located in Neptune, New Jersey. Its facility is
capable of producing a nominal 10.0 megawatts of power from
approximately 5.9 million standard cubic feet a day (dry basis)
of landfill gas.
(b) DES owns 100 percent of Monmouth's common stock. DQE owns 100
percent of DES' common stock.
(c) As of December 31, 1998, DES had invested $11.1 million in
Monmouth for construction of the facility. DQE has made no
direct investment.
There are no direct or indirect guarantees by DQE or DES of
Monmouth's security.
There is no direct or indirect recourse to DES or DQE or any
other system company for any debt or other financial obligation
of Monmouth.
(d) Monmouth's capitalization in 1998 was $11.1 million. Monmouth's
net income after tax in 1998 was $0.9 million.
(e) There are no service, sales or construction contracts between
Monmouth and any system company.
12
<PAGE>
EXHIBIT A
A consolidating statement of income and surplus of DQE for 1998,
together with a consolidating balance sheet of DQE as of December 31, 1998,
is attached as Exhibit 99.1 (which should be read in conjunction with the
Footnotes to Consolidated Financial Statements filed as part of the DQE
Annual Report on Form 10-K for the year ended December 31, 1998 (Securities
and Exchange Commission File No. 1-10290), and incorporated herein by
reference).
A consolidating statement of income and surplus of DE for 1998,
together with a consolidating balance sheet of DE as of December 31, 1998,
is attached as Exhibit 99.2.
A consolidating statement of income and surplus of DES for 1998,
together with a consolidated balance sheet of DES as of December 31, 1998,
is attached as Exhibit 99.3.
Consolidating financial statements of Duquesne Light, AquaSource,
DQEnergy Partners and Montauk for 1998 have been filed separately pursuant
to a request for confidential treatment.
EXHIBIT B
The required Financial Data Schedules are attached as Exhibit 27.1,
Exhibit 27.2 and Exhibit 27.3.
EXHIBIT C
An organizational chart showing the relationship of each EWG or foreign
utility company to associate companies in the holding-company system.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
------
| DQE |
------
|
---------------------------------------------------------------------------------------------------------
| | | | | | | |
- ---------------- ----- ------------- ------ ----------- ---------- ----------- --------------
| Duquesne Light| | DE | | AquaSource | | DES | | DQEnergy | | Montauk | | Brighter | | DQE |
- ---------------- ----- ------------- ------ | Partners | ---------- | Light | | Capital |
| ----------- ----------- | Corporation |
----------------- --------------
| Monmouth (EWG) |
-----------------
</TABLE>
13
<PAGE>
Each of the above-named claimants has caused this statement to be duly
executed on its behalf by its authorized officers on this 29th day of April,
1999.
ATTEST: DQE, INC.
/s/ Diane S. Eismont By: /s/ Gary L. Schwass
- ---------------------- -----------------------------
Diane S. Eismont Gary L. Schwass
Secretary Executive Vice President and
Chief Financial Officer
CORPORATE SEAL
ATTEST: DUQUESNE ENTERPRISES, INC.
/s/ Diane S. Eismont By: /s/ Thomas A. Hurkmans
- ---------------------- -------------------------
Diane S. Eismont Thomas A. Hurkmans
Secretary President
CORPORATE SEAL
ATTEST: DQE ENERGY SERVICES, INC.
/s/ Diane S. Eismont By: /s/ Alexis Tsaggaris
- ---------------------- -----------------------
Diane S. Eismont Alexis Tsaggaris
Secretary President
CORPORATE SEAL
Name, title and address of officer to whom notice and correspondence concerning
this statement should be addressed:
President and
David D. Marshall Chief Executive Officer
- ---------------------------------------------------------------------
(Name) (Title)
DQE
Cherrington Corporate Center
500 Cherrington Parkway, Suite 100
Coraopolis, PA 15108-3184
- ---------------------------------------------------------------------
(Address)
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> OPUR3
<CIK> 0000846930
<NAME> DQE, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 5,247,563
<TOTAL-OPERATING-REVENUES> 1,269,598
<NET-INCOME> 114,140
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> OPUR3
<CIK> 0000898598
<NAME> DUQUESNE ENTERPRISES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 132,954
<TOTAL-OPERATING-REVENUES> 41,426
<NET-INCOME> 7,575
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> OPUR3
<CIK> 0001041647
<NAME> DQE ENERGY SERVICES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 68,387
<TOTAL-OPERATING-REVENUES> 11,527
<NET-INCOME> (2,941)
</TABLE>
<PAGE>
DQE AND SUBSIDIARY COMPANIES EXHIBIT 99.1
CONSOLIDATING INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Duquesne Duquesne
Light Company Enterprises Montauk &
DQE & Subsidiaries & Subsidiaries & Subsidiaries
--- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Operating Revenues $ 0 $1,176,793,500 $42,068,159 $21,949,240
Operating Expenses:
Operating Expense 13,305,975 537,493,332 25,806,095 21,221,955
Maintenance 0 74,908,340 0 0
Depreciation and Amortization 125,718 207,631,279 4,041,677 1,681,344
Taxes Other Than Income Taxes 126,245 80,034,585 762,456 102,941
--------------------------------------------------------------
Total Operating Expenses 13,557,938 900,067,536 30,610,228 23,006,240
--------------------------------------------------------------
Operating Income (13,557,938) 276,725,964 11,457,931 (1,057,000)
--------------------------------------------------------------
Other Income 7,678,504 54,647,555 3,456,450 74,736,498
--------------------------------------------------------------
Income Before Interest and Other Charges (5,879,434) 331,373,519 14,914,381 73,679,498
--------------------------------------------------------------
Interest and Other Charges:
Interest Expense 0 80,186,623 2,157,847 10,812,449
Preferred and Preference Stock Dividends 0 4,035,504 0 150,000
Monthly Income Preferred Securities Dividend Requirements 0 12,562,500 0 0
--------------------------------------------------------------
Total Interest and Other Charges 0 96,784,627 2,157,847 10,962,449
--------------------------------------------------------------
Income Before Income Taxes (5,879,434) 234,588,892 12,756,534 62,717,049
Income Taxes (2,708,296) 90,076,687 5,181,084 9,678,468
--------------------------------------------------------------
Net Income Before Extraordinary Item (3,171,138) 144,512,205 7,575,450 53,038,581
--------------------------------------------------------------
Extraordinary Item (Net of Tax) 0 (82,548,001) 0 0
--------------------------------------------------------------
Net Income ($3,171,138) $61,964,204 $7,575,450 $53,038,581
==============================================================
<CAPTION>
DQE Energy DQEnergy Consolidation
Services, Inc. Partners AquaSource Eliminations
-------------- -------- ---------- -------------
<S> <C> <C> <C> <C>
Operating Revenues $11,405,756 $199,464 $30,810,058 ($13,627,884)
Operating Expenses:
Operating Expense 15,986,743 455,664 27,671,324 (17,591,144)
Maintenance 0 0 0 0
Depreciation and Amortization 1,145,911 108,129 2,421,849 0
Taxes Other Than Income Taxes 0 13,809 278,236 0
-----------------------------------------------------------
Total Operating Expenses 17,132,654 577,602 30,371,409 (17,591,144)
-----------------------------------------------------------
Operating Income (5,726,898) (378,138) 438,649 3,963,260
-----------------------------------------------------------
Other Income 1,800,499 (919,498) 2,412,607 (7,807,688)
-----------------------------------------------------------
Income Before Interest and Other Charges (3,926,399) (1,297,636) 2,851,256 (3,844,428)
-----------------------------------------------------------
Interest and Other Charges:
Interest Expense 605,909 48,143 518,786 (877,128)
Preferred and Preference Stock Dividends 0 0 0 0
Monthly Income Preferred Securities Dividend Requirements 0 0 0 0
-----------------------------------------------------------
Total Interest and Other Charges 605,909 48,143 518,786 (877,128)
-----------------------------------------------------------
Income Before Income Taxes (4,532,308) (1,345,779) 2,332,470 (2,967,300)
Income Taxes (1,591,681) (471,000) 816,365 0
-----------------------------------------------------------
Net Income Before Extraordinary Item (2,940,627) (874,779) 1,516,105 (2,967,300)
-----------------------------------------------------------
Extraordinary Item (Net of Tax) 0 0 0 0
-----------------------------------------------------------
Net Income ($2,940,627) ($874,779) $1,516,105 ($2,967,300)
===========================================================
<CAPTION>
DQE &
Subsidiary
Companies
---------
<S> <C>
Operating Revenues $1,269,598,293
Operating Expenses:
Operating Expense 624,349,944
Maintenance 74,908,340
Depreciation and Amortization 217,155,907
Taxes Other Than Income Taxes 81,318,272
--------------
Total Operating Expenses 997,732,463
--------------
Operating Income 271,865,830
--------------
Other Income 136,004,927
--------------
Income Before Interest and Other Charges 407,870,757
--------------
Interest and Other Charges:
Interest Expense 93,452,629
Preferred and Preference Stock Dividends 4,185,504
Monthly Income Preferred Securities Dividend Requirements 12,562,500
--------------
Total Interest and Other Charges 110,200,633
--------------
Income Before Income Taxes 297,670,124
Income Taxes 100,981,627
--------------
Net Income Before Extraordinary Item 196,688,497
--------------
Extraordinary Item (Net of Tax) (82,548,001)
--------------
Net Income $ 114,140,496
==============
</TABLE>
These financial statements should be read in conjunction with the DQE Annual
Report on Form 10-k.
<PAGE>
DQE AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Duquesne Duquesne
Light Company Enterprises Montauk &
DQE & Subsidiaries & Subsidiaries & Subsidiaries
<S> <C> <C> <C> <C>
Assets:
Current Assets:
Cash and Temporary Cash Investments $13,361,446 $53,150,760 $4,190,345 $27,892,656
Receivables 1,471,440 125,955,774 12,830,646 39,127,685
Materials & Supplies:
Coal 0 25,701,911 0 0
Operating and Construction 0 58,746,772 0 0
Other Current Assets 36,000,000 7,670,102 796,128 11,378,822
------------------------------------------------------------------
Total Current Assets 50,832,886 271,225,319 17,817,119 78,399,163
------------------------------------------------------------------
Long-Term Investments:
Affordable Housing 0 18,850,505 0 112,544,016
Natural Gas Reserve 0 25,637,542 0 77,631,911
Leveraged Leases 0 0 0 388,112,648
Other Leases 0 20,565,242 0 18,218,057
Other 1,506,278,750 137,202,949 13,174,073 8,609,618
------------------------------------------------------------------
Total Long-Term Investments 1,506,278,750 202,256,238 13,174,073 605,116,250
------------------------------------------------------------------
Property, Plant and Equipment:
Electric Plant in Service 0 4,368,726,181 0 0
Water Plant in Service 0 0 0 0
Construction Work in Progress 0 79,644,188 0 0
Property Held Under Capital Leases 0 123,373,875 0 0
Property Held for Future Use 0 10,976,473 0 0
Other 598,559 6,419,162 86,807,974 42,136,093
------------------------------------------------------------------
Total 598,559 4,589,139,880 86,807,974 42,136,093
Less Accumulated Depreciation and Amortization (272,676) (3,141,841,155) (17,405,868) (3,790,206)
------------------------------------------------------------------
Property, Plant and Equipment - Net 325,883 1,447,298,725 69,402,106 38,345,887
------------------------------------------------------------------
Other Non-Current Assets:
Transition Costs 0 2,132,980,000 0 0
Regulatory Assets 0 64,567,980 0 0
Other 205,276 56,799,968 28,567,868 9,896,838
------------------------------------------------------------------
Total Other Non-Current Assets 205,276 2,254,347,948 28,567,868 9,896,838
------------------------------------------------------------------
Total Assets $1,557,642,795 $4,175,128,230 $128,961,166 $731,758,138
==================================================================
<CAPTION>
EXHIBIT 99.1 (cont'd)
DQE &
DQE Energy DQEnergy Consolidation Subsidiary
Services, Inc. Partners AquaSource Eliminations Companies
<S> <C> <C> <C> <C> <C>
Assets:
Current Assets:
Cash and Temporary Cash Investments $ 3,400,181 $ 204,367 $ 6,590,508 $ 0 $ 108,790,263
Receivables 2,177,421 880,757 10,621,276 (27,270,553) 165,794,447
Materials & Supplies:
Coal 0 0 0 0 25,701,911
Operating and Construction 0 0 0 0 58,746,772
Other Current Assets 292,157 362,962 7,116,737 (47,898,169) 15,718,739
-----------------------------------------------------------------------------------
Total Current Assets 5,869,759 1,448,086 24,328,521 (75,168,722) 374,752,132
-----------------------------------------------------------------------------------
Long-Term Investments:
Affordable Housing 0 0 0 0 131,394,521
Natural Gas Reserve 0 0 0 0 103,269,453
Leveraged Leases 0 0 0 0 388,112,648
Other Leases 0 0 0 0 38,783,299
Other 0 4,123,950 9,641,082 (1,580,153,209) 98,877,213
-----------------------------------------------------------------------------------
Total Long-Term Investments 0 4,123,950 9,641,082 (1,580,153,209) 760,437,134
-----------------------------------------------------------------------------------
Property, Plant and Equipment:
Electric Plant in Service 0 0 0 0 4,368,726,181
Water Plant in Service 0 0 91,849,999 0 91,849,999
Construction Work in Progress 0 0 0 0 79,644,188
Property Held Under Capital Leases 0 0 0 0 123,373,875
Property Held for Future Use 0 0 0 0 10,976,473
Other 62,054,882 5,941,951 0 5,608,734 209,567,355
-----------------------------------------------------------------------------------
Total 62,054,882 5,941,951 91,849,999 5,608,734 4,884,138,071
Less Accumulated Depreciation and Amortization (1,267,521) (241,521) (1,660,371) (848,250) (3,167,327,568)
-----------------------------------------------------------------------------------
Property, Plant and Equipment - Net 60,787,361 5,700,430 90,189,628 4,760,484 1,716,810,503
-----------------------------------------------------------------------------------
Other Non-Current Assets:
Transition Costs 0 0 0 0 2,132,980,000
Regulatory Assets 0 0 0 0 64,567,980
Other 1,351,630 0 107,832,426 (6,638,700) 198,015,306
----------------------------------------------------------------------------------
Total Other Non-Current Assets 1,351,630 0 107,832,426 (6,638,700) 2,395,563,286
----------------------------------------------------------------------------------
Total Assets $68,008,750 $11,272,466 $ 231,991,657 ($1,657,200,147) $ 5,247,563,055
==================================================================================
</TABLE>
These financial statements should be read in conjunction with the DQE Annual
Report on Form 10-K.
<PAGE>
DQE AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET
FOR THE YEAR ENDED DECEMBER 31, 1998 EXHIBIT 99.1 (cont'd)
<TABLE>
<CAPTION>
Duquesne Duquesne
Light Company Enterprises Montauk &
DQE & Subsidiaries & Subsidiaries & Subsidiaries
--- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Liabilities and Capitalization:
Current Liabilities:
Notes Payable $0 $0 $24,000,000 $1,400,000
Current Maturities and Sinking Fund Req. 0 96,136,839 435,125 1,000,000
Accounts Payable (2,130,276) 105,624,311 8,419,997 3,203,852
Accrued Liabilities (26,304,643) 116,055,867 6,945,101 5,018,722
Dividends Declared 30,015,274 39,596,677 0 0
Other 0 6,863,979 0 0
------------------------------------------------------------------
Total Current Liabilities 1,580,355 364,277,673 39,800,223 10,622,574
------------------------------------------------------------------
Non-Current Liabilities:
Deferred Income Taxes - Net (16,935,371) 610,271,753 (4,527,945) 194,637,612
Deferred Investment Tax Credits 0 24,075,930 0 0
Capital Lease Obligations 0 36,596,369 0 0
Deferred Income 0 117,507,941 0 25,468,094
Other 0 765,769,055 2,945,690 15,492,410
------------------------------------------------------------------
Total Non-Current Liabilities (16,935,371) 1,554,221,048 (1,582,255) 235,598,116
------------------------------------------------------------------
Capitalization:
Long-Term Debt 0 1,160,347,531 15,848,525 174,000,000
------------------------------------------------------------------
Non-Redeemable Preferred Stock 35,274,200 215,108,294 0 0
Non-Redeemable Preference Stock 0 26,913,776 0 0
Deferred Employee Stock Ownership Plan (ESOP) Benefit 0 (14,240,121) 0 0
- ------------------------------------------------------- ------------------------------------------------------------------
Total Preferred and Preference Stock of Subsidiaries 35,274,200 227,781,949 0 0
------------------------------------------------------------------
Common Shareholders Equity:
Common Stock/Capital Surplus 1,033,560,813 840,853,945 77,486,787 290,122,751
Retained Earnings 869,671,448 27,646,084 (2,592,114) 21,414,697
Less Treasury Stock (365,508,650) 0 0 0
------------------------------------------------------------------
Total Common Shareholders Equity 1,537,723,611 868,500,029 74,894,673 311,537,448
------------------------------------------------------------------
Total Liabilities and Capitalization $1,557,642,795 $4,175,128,230 $128,961,166 $731,758,138
==================================================================
<CAPTION>
DQE &
DQE Energy DQEnergy Consolidation Subsidiary
Services, Inc. Partners AquaSource Eliminations Companies
---------------- -------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Liabilities and Capitalization:
Current Liabilities:
Notes Payable $2,812,611 $418,764 $312,375 ($24,418,764) $4,524,986
Current Maturities and Sinking Fund Req. 0 0 3,250,000 0 100,821,964
Accounts Payable 5,526,290 618,446 2,689,500 (2,851,789) 121,100,331
Accrued Liabilities 221,789 (1,626,883) (1,071,593) (11,295,435) 87,942,925
Dividends Declared 0 0 0 (36,602,734) 33,009,217
Other 0 0 0 0 6,863,979
---------------------------------------------------------------------------------
Total Current Liabilities 8,560,690 (589,673) 5,180,282 (75,168,722) 354,263,402
---------------------------------------------------------------------------------
Non-Current Liabilities:
Deferred Income Taxes - Net (377,984) (5,624) 9,342,973 (15,388,237) 777,017,177
Deferred Investment Tax Credits 0 0 0 0 24,075,930
Capital Lease Obligations 0 0 0 0 36,596,369
Deferred Income 0 0 13,603,000 0 156,579,035
Other 0 522,292 1,821,260 0 786,550,707
---------------------------------------------------------------------------------
Total Non-Current Liabilities (377,984) 516,668 24,767,233 (15,388,237) 1,780,819,218
---------------------------------------------------------------------------------
Capitalization:
Long-Term Debt 0 0 21,321,976 (6,638,700) 1,364,879,332
---------------------------------------------------------------------------------
Non-Redeemable Preferred Stock 0 0 500,000 0 250,882,494
Non-Redeemable Preference Stock 0 0 0 0 26,913,776
Deferred Employee Stock Ownership Plan (ESOP)
Benefit 0 0 0 0 (14,240,121)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Preferred and Preference Stock of
Subsidiaries 0 0 500,000 0 263,556,149
---------------------------------------------------------------------------------
Common Shareholders Equity:
Common Stock/Capital Surplus 65,535,000 14,670,914 179,142,116 (1,501,022,332) 1,000,349,994
Retained Earnings (5,708,956) (3,325,443) 1,080,050 (38,514,318) 869,671,448
Less Treasury Stock 0 0 0 (20,467,838) (385,976,488)
---------------------------------------------------------------------------------
Total Common Shareholders Equity 59,826,044 11,345,471 180,222,166 (1,560,004,488) 1,484,044,954
---------------------------------------------------------------------------------
Total Liabilities and Capitalization $68,008,750 $11,272,466 $231,991,657 ($1,657,200,147) $5,247,563,055
=================================================================================
</TABLE>
These financial statements should be read in conjunction with the DQE Annual
Report on Form 10-K.
<PAGE>
EXHIBIT 99.2
DUQUESNE ENTERPRISES AND SUBSIDIARY COMPANIES
CONSOLIDATING INCOME STATEMENT
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
Property
Allegheny Keystone JLK Ventures
Duquesne Development Power Technology Ltd. &
Enterprises Corporation Services Inc. Subsidiaries
----------- ----------- -------- ---- ------------
<S> <C> <C> <C> <C> <C>
Operating Revenues $ 2,386 $11,613 $16,999 $400 $ 9,996
Operating Expenses:
Operation Expense (939) 7,513 15,221 246 8,744
Depreciation and amortization 38 756 354 55 2,696
Taxes other than income taxes 232 134 0 0 378
------- ------- ------- ---- -------
Total operating expenses (669) 8,403 15,575 301 11,818
Operating Income 3,055 3,210 1,424 99 (1,822)
Other Income 8,399 0 (488) 28 3,992
------- ------- ------- ---- -------
Income Before Interest and Other Charges 11,454 3,210 936 127 2,170
Interest and Other Charges:
Interest Expense 668 0 406 0 1,373
Preferred and Preference stock dividends 0 0 0 0 0
------- ------- ------- ---- -------
Total Interest and Other Charges 668 0 406 0 1,373
------- ------- ------- ---- -------
Income Before Income Taxes 10,786 3,210 530 127 797
Federal income taxes 2,774 1,031 167 44 241
State income taxes 879 269 53 0 21
------- ------- ------- ---- -------
Net Income $ 7,133 $ 1,910 $ 310 $ 83 $ 535
<CAPTION>
Duquesne
Enterprises &
On-Demand DQE Consolidation Subsidiary
Energy Communications Eliminations Companies
--------- -------------- ------------ ---------
<S> <C> <C> <C> <C>
Operating Revenues $1,365 $ 508 ($1,841) $41,426
Operating Expenses:
Operation Expense 2,122 440 292 33,639
Depreciation and amortization 33 110 0 4,042
Taxes other than income taxes 5 13 0 762
------ ----- ------- -------
Total operating expenses 2,160 563 292 38,443
Operating Income (795) (55) (2,133) 2,983
Other Income 0 0 0 11,931
------ ----- ------- -------
Income Before Interest and Other Charges (795) (55) (2,133) 14,914
Interest and Other Charges:
Interest Expense 0 3 (292) 2,158
Preferred and Preference stock dividends 0 0 0 0
------ ----- ------- -------
Total Interest and Other Charges 0 3 (292) 2,158
------ ----- ------- -------
Income Before Income Taxes (795) (58) (1,841) 12,756
Federal income taxes (278) (20) 0 3,959
State income taxes 0 0 0 1,222
------ ----- ------- -------
Net Income ($517) ($38) ($1,841) $ 7,575
</TABLE>
<PAGE>
DUQUESNE ENTERPRISES AND SUBSIDIARY COMPANIES EXHIBIT 99.2 (cont,d)
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
Property
Allegheny Keystone JLK Ventures
Duquesne Development Power Technology Ltd. &
Enterprises Corporation Services Inc. Subsidiaries
-------------- --------------- ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Current Assets:
Cash and Temporary Cash Investments $ 3,425 $ 0 $ 615 $ 0 $ 150
Receivables 8,929 5,197 10,085 0 3,883
Other Current Assets 3,713 0 299 0 0
-------- --------- -------- ---- --------
Total Current Assets 16,067 5,197 10,999 0 4,033
Fixed Assets:
Energy Facility 0 11,121 0 0 0
Energy Management Equipment 0 0 3,455 0 0
Buildings and Land 0 0 0 0 71,203
Construction Work in Progress 0 0 0 0 0
Office Furniture and Equipment 352 52 0 0 91
Accumulated Depreciation and Amortization (153) (5,220) (1,677) 0 (10,322)
-------- --------- -------- ---- --------
Net Fixed Assets 199 5,953 1,778 0 60,972
Other Assets:
Investments in Subsidiaries 70,663 0 0 0 0
Goodwill 0 0 19,460 0 0
Other Investments 12,491 0 9,316 338 0
Other Deferred Debits 332 3 710 0 1,234
-------- --------- -------- ---- --------
Total Other Assets 83,486 3 29,486 338 1,234
Total Assets $ 99,752 $ 11,153 $ 42,263 $338 $ 66,239
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Notes Payable $ 24,000 $ 0 $ 0 $ 0 $ 0
Current Maturities & Sinking Fund Req. 0 0 0 0 435
Accounts Payable 4,925 2,928 6,546 278 8,541
Accrued Liabilities 6,992 154 53 0 (71)
-------- --------- -------- ---- --------
Total Current Liabilities 35,917 3,082 6,599 278 8,905
Long-Term Debt 0 0 9,629 0 8,719
Other Liabilities (226) 596 2,574 0 (758)
Stockholders' Equity:
Common Stock 0 96 0 0 0
Paid-in Capital & Treasury Stock 77,548 6,889 23,150 0 50,321
Retained Earnings (13,487) 490 311 60 (948)
-------- --------- -------- ---- --------
Total Stockholders' Equity 64,061 7,475 23,461 60 49,373
Total Liabilities and Stockholders' Equity $ 99,752 $ 11,153 $ 42,263 $338 $ 66,239
<CAPTION>
Duquesne
Enterprises &
On-Demand Consolidation Subsidiary
Energy Eliminations Companies
--------- --------------- -------------
<S> <C> <C> <C>
ASSETS:
Current Assets:
Cash and Temporary Cash Investments $ 0 $ 0 $ 4,190
Receivables 277 (15,148) 13,223
Other Current Assets 5 0 4,017
-------- --------- --------
Total Current Assets 282 (15,148) 21,430
Fixed Assets:
Energy Facility 0 0 11,121
Energy Management Equipment 330 0 3,785
Buildings and Land 0 0 71,203
Construction Work in Progress 100 100
Office Furniture and Equipment 204 0 699
Accumulated Depreciation and Amortization (34) 0 (17,406)
-------- --------- --------
Net Fixed Assets 600 0 69,502
Other Assets:
Investments in Subsidiaries 0 (70,663) 0
Goodwill 0 0 19,460
Other Investments 584 (2,500) 20,229
Other Deferred Debits 70 (16) 2,333
-------- --------- --------
Total Other Assets 654 (73,179) 42,022
Total Assets $ 1,536 ($ 88,327) $132,954
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Notes Payable $ 0 $ 0 $ 24,000
Current Maturities & Sinking Fund Req. 0 0 435
Accounts Payable 175 (15,147) 8,246
Accrued Liabilities (8) 0 7,120
-------- --------- --------
Total Current Liabilities 167 (15,147) 39,801
Long-Term Debt 0 (2,500) 15,848
Other Liabilities 225 0 2,411
Stockholders' Equity:
Common Stock 46 (142) 0
Paid-in Capital & Treasury Stock 1,666 (82,088) 77,486
Retained Earnings (568) 11,550 (2,592)
-------- --------- --------
Total Stockholders' Equity 1,144 (70,680) 74,894
Total Liabilities and Stockholders' Equity $ 1,536 ($ 88,327) $132,954
</TABLE>
<PAGE>
1
Exhibit 99.3
4/27/99
DQE Energy Services, Inc. Consolidating Income Statement
- ------------------------
For the Twelve Months Ending December 31, 1998
<TABLE>
<CAPTION>
DQEES DH ENERGY MT ENERGY DQEPI DEN MONMOUTH
<S> <C> <C> <C> <C> <C> <C>
REVENUES 120,750.00 2,707,919.68 862,557.93 137,857.98 2,624,454.99 997,835.28
- -------- ---------- ------------ ---------- ---------- ------------ ----------
TOTAL REVENUE 120,750.00 2,707,919.68 862,557.93 137,857.98 2,624,454.99 997,835.28
COST OF GOODS SOLD 0.00 0.00 0.00 0.00 2,266,954.26 0.00
SALARIES 1,023,243.16 42,984.00 372,280.45 96,737.24 196,808.64 37,292.71
DEPRECIATION 33,533.71 97,267.47 0.00 0.00 612,982.43 179,865.88
EMPLOYEE EXPENSES 65,172.62 2,455.12 1,280.50 30,082.24 79,289.06 426.36
LETTER OF CREDIT FEE'S 0.00 0.00 0.00 0.00 0.00 5,864.00
OFFICE SUPPLIES AND EXPENSES 57,883.76 0.00 2,114.39 7,740.80 17,567.09 0.00
PAYROLL FRINGES AND TAXES 304,570.83 9,431.99 37,181.74 (39,992.30) 78,087.95 9,322.30
RENT EXPENSE 110,330.31 0.00 0.00 8,361.02 39,703.84 0.00
TELEPHONE EXPENSE 26,836.32 0.00 1,635.28 4,200.44 17,244.46 8,835.10
OFFICE EQUIPMENT LEASES 0.00 0.00 88.89 0.00 0.00 0.00
INSURANCE EXPENSE 503.00 0.00 0.00 575.78 0.00 10,850.06
ADVERTISING & PROMOTIONAL 23,378.03 311.60 0.00 0.00 11,945.13 0.00
COMPUTER SERVICES 7,866.25 0.00 0.00 0.00 0.00 0.00
DUES & MEMBERSHIPS 2,567.50 0.00 0.00 170.94 250.00 0.00
SUBSCRIPTIONS & PUBLICATIONS 3,785.41 0.00 0.00 247.09 323.79 0.00
POSTAGE 9,023.89 0.00 126.40 247.81 1,608.92 0.00
CONTRIBUTION 2,500.00 0.00 0.00 0.00 0.00 0.00
TRANSPORTATION 0.00 0.00 0.00 5,445.37 0.00 0.00
AUTO EXPENSE 0.00 0.00 0.00 480.80 0.00 0.00
MISCELLANEOUS EXPENSE 5,179.10 773.35 287.68 2,728.98 190,633.72 0.00
DLC-OTHER SERVICES 48,790.21 0.00 0.00 3,294.07 126,664.22 0.00
DQE COST ALLOCATION 58,164.50 0.00 0.00 0.00 0.00 0.00
LONG TERM INCENTIVE 603,389.43 0.00 0.00 0.00 0.00 0.00
OUTSIDE ACCOUNTING SERVICES 20,841.39 0.00 0.00 359.34 451.46 0.00
OUTSIDE LEGAL SERVICES 728.00 0.00 0.00 22,475.24 28,174.15 165.00
OTHER OUTSIDE SERVICES 91,397.82 7,700.00 0.00 38,936.56 41,735.65 1,337.38
CONTRACT OPERATOR FEES 0.00 0.00 0.00 0.00 744,871.38 0.00
STATE CAPITAL STOCK TAX 11,855.00 54,160.00 14,871.68 0.00 45,450.00 0.00
PGH BUSINESS PRIVILEGE TAX 0.00 18,000.00 0.00 0.00 0.00 0.00
OPERATING EXP. - MT ENERGY,INC 0.00 0.00 160,572.19 0.00 0.00 0.00
OPERATING EXP. - DH ENERGY,INC 0.00 1,128,374.59 0.00 0.00 0.00 0.00
OPERATING EXP. - DEN 0.00 0.00 0.00 0.00 1,442,836.07 0.00
OPERATING EXP. - MONMOUTH 0.00 0.00 0.00 0.00 0.00 582,312.50
OPERATING EXP. - DHCANADA 0.00 0.00 0.00 0.00 0.00 0.00
-------------- -------------- ----------- --------------- -------------- -----------
TOTAL OPERATING EXPENSES 2,511,540.24 1,361,458.12 590,439.20 182,091.42 5,943,582.22 836,271.29
TOTAL OPERATING INCOME (LOSS) (2,390,790.24) 1,346,461.56 272,118.73 (44,233.44) (3,319,127.23) 161,563.99
INTEREST EARNED 49,757.93 0.00 0.00 0.00 14,999.40 0.00
OTHER (EXPENSE)/INCOME 0.00 0.00 0.00 (1,405,596.15) 0.00 0.00
OTHER EXPENSE/(INCOME) 0.00 0.00 0.00 0.00 (437,276.07) 0.00
INTEREST EXPENSE 0.00 500,580.81 0.00 0.00 0.00 0.00
-------------- -------------- ----------- --------------- -------------- -----------
NET INCOME BEFORE TAX (2,341,032.31) 845,880.75 272,118.73 (1,449,829.59) (2,866,851.76) 161,563.99
FEDERAL INCOME TAXES (434,852.31) 266,482.04 85,726.92 (502,055.61) (1,003,398.12) 52,023.60
STATE INCOME TAXES 0.00 84,503.49 27,184.66 0.00 0.00 12,925.12
FIT EXPENSE-SEC 29 0.00 (82,586.25) 0.00 0.00 (316,942.41) (842,252.00)
-------------- -------------- ----------- --------------- -------------- -----------
NET INCOME AFTER TAX ($1,906,180.00) $ 577,481.47 $159,207.15 ($ 947,773.98) ($1,546,511.23) $938,867.27
============== ============== =========== =============== ============== ===========
<CAPTION>
DHCANADA ELIMINATIONS TOTAL
<S> <C> <C> <C>
REVENUES 4,075,129.60 0.00 11,526,505.46
- -------- ------------ ---- -------------
TOTAL REVENUE 4,075,129.60 0.00 11,526,505.46
COST OF GOODS SOLD 0.00 0.00 2,266,954.26
SALARIES 49,575.46 0.00 1,818,921.66
DEPRECIATION 222,261.60 0.00 1,145,911.09
EMPLOYEE EXPENSES 1,572.96 0.00 180,278.86
LETTER OF CREDIT FEE'S 0.00 0.00 5,864.00
OFFICE SUPPLIES AND EXPENSES 428.38 0.00 85,734.42
PAYROLL FRINGES AND TAXES 8,955.19 0.00 407,557.70
RENT EXPENSE 0.00 0.00 158,395.17
TELEPHONE EXPENSE 2,103.49 0.00 60,855.09
OFFICE EQUIPMENT LEASES 0.00 0.00 88.89
INSURANCE EXPENSE 7,272.25 0.00 19,201.09
ADVERTISING & PROMOTIONAL 0.00 0.00 35,634.76
COMPUTER SERVICES 0.00 0.00 7,866.25
DUES & MEMBERSHIPS 156.87 0.00 3,145.31
SUBSCRIPTIONS & PUBLICATIONS 0.00 0.00 4,356.29
POSTAGE 588.48 0.00 11,595.50
CONTRIBUTION 0.00 0.00 2,500.00
TRANSPORTATION 0.00 0.00 5,445.37
AUTO EXPENSE 0.00 0.00 480.80
MISCELLANEOUS EXPENSE 0.00 0.00 199,602.83
DLC-OTHER SERVICES 0.00 0.00 178,748.50
DQE COST ALLOCATION 0.00 0.00 58,164.50
LONG TERM INCENTIVE 0.00 0.00 603,389.43
OUTSIDE ACCOUNTING SERVICES 0.00 0.00 21,652.19
OUTSIDE LEGAL SERVICES 0.00 0.00 51,542.39
OTHER OUTSIDE SERVICES 0.00 0.00 181,107.41
CONTRACT OPERATOR FEES 0.00 0.00 744,871.38
STATE CAPITAL STOCK TAX 0.00 0.00 126,336.68
PGH BUSINESS PRIVILEGE TAX 0.00 0.00 18,000.00
OPERATING EXP. - MT ENERGY,INC 0.00 0.00 160,572.19
OPERATING EXP. - DH ENERGY,INC 0.00 0.00 1,128,374.59
OPERATING EXP. - DEN 0.00 0.00 1,442,836.07
OPERATING EXP. - MONMOUTH 0.00 0.00 582,312.50
OPERATING EXP. - DHCANADA 4,008,760.72 0.00 4,008,760.72
-------------- ----- ---------------
TOTAL OPERATING EXPENSES 4,301,675.40 0.00 15,727,057.89
TOTAL OPERATING INCOME (LOSS) (226,545.80) 0.00 (4,200,552.43)
INTEREST EARNED 0.00 0.00 64,757.33
OTHER (EXPENSE)/INCOME 0.00 0.00 (1,405,596.15)
OTHER EXPENSE/(INCOME) 0.00 0.00 (437,276.07)
INTEREST EXPENSE 105,327.89 0.00 605,908.70
-------------- ----- ---------------
NET INCOME BEFORE TAX (331,873.69) 0.00 (5,710,023.88)
FEDERAL INCOME TAXES (116,155.79) 0.00 (1,652,229.27)
STATE INCOME TAXES 0.00 0.00 124,613.27
FIT EXPENSE-SEC 29 0.00 0.00 (1,241,780.66)
-------------- ----- ---------------
NET INCOME AFTER TAX ($ 215,717.90) $0.00 ($ 2,940,627.22)
============== ===== ===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
4/27/99
DQE Energy Services, Inc. Consolidating Balance Sheet
For the Twelve Months Ending December 31, 1998
DQEES DH ENERGY MT ENERGY DQEPI DEN MONMOUTH
ASSETS
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS:
ACCTS RECEIVABLE-POWER INTL 9,066.00 0.00 0.00 0.00 0.00 0.00
ACCTS RECEIVABLE-DE 4,328.30 0.00 0.00 0.00 0.00 0.00
ACCTS RECEIVABLE-DQE 3,000.00 0.00 0.00 0.00 0.00 0.00
ACCTS RECEIVABLE-ADC 10,200.00 0.00 76,049.70 0.00 0.00 0.00
ACCTS RECEIVABLE-PARTNERS 4,438.51 0.00 0.00 0.00 0.00 0.00
ACCTS RECEIVABLE-HEINZ 0.00 229,866.97 0.00 0.00 207,102.02 0.00
ACCTS RECEIVABLE-DEN 1,381,173.45 0.00 0.00 0.00 0.00 0.00
ACCTS RECEIVABLE-DH ENERGY 76,848.45 0.00 0.00 0.00 0.00 0.00
ACCTS RECEIVABLE DH CANADA 12,909.36 0.00 0.00 0.00 0.00 0.00
ACCTS RECEIVABLE-MT ENERGY 35,643.31 0.00 0.00 0.00 0.00 0.00
ACCTS RECEIVABLE-MONMOUTH 5,076.50 0.00 0.00 0.00 0.00 0.00
ACCOUNTS RECEIVABLE-DLC 0.00 0.00 0.00 0.00 86,511.10 0.00
ACCOUNTS RECEIVABLE - GST 0.00 0.00 0.00 0.00 0.00 0.00
A/R DEN CUSTOMERS 0.00 0.00 0.00 0.00 391,636.23 0.00
ACCOUNTS REVEIVABLE - GPU 0.00 0.00 0.00 0.00 0.00 223,882.97
ACCTS RECEIVABLE-OTHER 6,093.00 0.00 0.00 56.20 191,228.50 0.00
FEDERAL TAX RECEIVABLE-DQEES 0.00 0.00 0.00 1,564,385.04 0.00 22,947.83
FEDERAL TAX RECEIVABLE - DQE 183,490.24 0.00 0.00 0.00 0.00 0.00
FEDERAL TAX RECEIVABLE - MT 15,306.25 0.00 0.00 0.00 0.00 0.00
FEDERAL TAX RECEIVABLE - DH 68,907.95 0.00 0.00 0.00 0.00 0.00
FEDERAL TAX REC. - SEC. 29 194,494.15 82,586.25 0.00 0.00 0.00 1,201,332.00
------------ ---------- ---------- ------------ ------------ ------------
TOTAL RECEIVABLES 2,010,975.47 312,453.22 76,049.70 1,564,441.24 876,477.85 1,448,162.80
CASH 714,803.95 118,746.04 302,565.87 727,043.60 910,971.35 368,818.96
PREPAID EXPENSES 8,900.20 1,666.70 0.00 0.00 0.00 0.00
------------ ---------- ---------- ------------ ------------ ------------
TOTAL CURRENT ASSETS 2,734,679.62 432,865.96 378,615.57 2,291,484.84 1,787,449.20 1,816,981.76
INVENTORY 0.00 38,358.40 0.00 0.00 242,631.74 0.00
CONSTRUCTION WORK IN PROGRESS 0.00 3,330,265.97 0.00 0.00 0.00 298,270.97
CONSTRUCT WIP-DEN 0.00 0.00 0.00 0.00 41,266,103.95 0.00
OFFICE FURNITURE & EQUIPMENT 468,636.92 0.00 0.00 22,357.17 161,719.18 0.00
ACC DEPREC-OFF FURN & EQUIP (97,134.01) 0.00 0.00 0.00 (214,599.39) 0.00
PLANT, PROPERTY & EQUIP. 0.00 1,091,760.25 0.00 29,659.26 28,000.98 10,794,713.19
ACCM.DEPREC. PP&E 0.00 (123,470.66) 0.00 0.00 (400,000.00) (179,865.88)
PREDICTIVE OVERHALL PP&E 0.00 312,408.10 0.00 0.00 0.00 0.00
ACCUM. DEPR. PREDICT OVERHALL 0.00 (30,190.05) 0.00 0.00 0.00 0.00
PROJECT DEVELOPMENT COSTS 181,123.23 0.00 0.00 962,113.56 0.00 0.00
-------------- ------------- ----------- ------------- -------------- --------------
TOTAL FIXED ASSETS 552,626.14 4,619,132.01 0.00 1,014,129.99 41,083,856.46 10,913,118.28
CLOSURE DEPOSITS 0.00 0.00 0.00 0.00 66,759.00 0.00
PATENTS 0.00 0.00 0.00 0.00 34,742.36 0.00
LICENSES 0.00 0.00 0.00 0.00 101,334.35 0.00
TRADEMARKS 0.00 0.00 0.00 0.00 5,558.20 0.00
INVESTMENTS 63,005,316.23 0.00 0.00 0.00 0.00 0.00
-------------- ------------- ----------- ------------- -------------- --------------
TOTAL ASSETS $66,292,621.99 $5,051,997.97 $378,615.57 $3,305,614.83 $43,079,699.57 $12,730,100.04
============== ============= =========== ============= ============== ==============
<CAPTION>
1
Exhibit 99.3 (cont'd) Cat # BALSHTconsol
DHCANADA ELIMINATIONS TOTAL
<S> <C> <C> <C>
CURRENT ASSETS:
ACCTS RECEIVABLE-POWER INTL 0.00 (9,066.00) 0.00
ACCTS RECEIVABLE-DE 0.00 0.00 4,328.30
ACCTS RECEIVABLE-DQE 0.00 0.00 3,000.00
ACCTS RECEIVABLE-ADC 0.00 0.00 86,249.70
ACCTS RECEIVABLE-PARTNERS 0.00 0.00 4,438.51
ACCTS RECEIVABLE-HEINZ 670,807.02 0.00 1,107,776.01
ACCTS RECEIVABLE-DEN 0.00 (1,381,173.45) 0.00
ACCTS RECEIVABLE-DH ENERGY 0.00 (76,848.45) 0.00
ACCTS RECEIVABLE DH CANADA 0.00 (12,909.36) 0.00
ACCTS RECEIVABLE-MT ENERGY 0.00 (35,643.31) 0.00
ACCTS RECEIVABLE-MONMOUTH 0.00 (5,076.50) 0.00
ACCOUNTS RECEIVABLE-DLC 0.00 0.00 86,511.10
ACCOUNTS RECEIVABLE - GST 72,220.27 0.00 72,220.27
A/R DEN CUSTOMERS 0.00 0.00 391,636.23
ACCOUNTS REVEIVABLE - GPU 0.00 0.00 223,882.97
ACCTS RECEIVABLE-OTHER 0.00 0.00 197,377.70
FEDERAL TAX RECEIVABLE-DQEES 116,155.79 (1,703,488.66) 0.00
FEDERAL TAX RECEIVABLE - DQE 0.00 0.00 183,490.24
FEDERAL TAX RECEIVABLE - MT 0.00 (15,306.25) 0.00
FEDERAL TAX RECEIVABLE - DH 0.00 (68,907.95) 0.00
FEDERAL TAX REC. - SEC. 29 0.00 (1,283,918.25) 194,494.15
---------------- ---------------- ----------------
TOTAL RECEIVABLES 859,183.08 (4,592,338.18) 2,555,405.18
CASH 257,230.81 0.00 3,400,180.58
PREPAID EXPENSES 599.75 0.00 11,166.65
---------------- ---------------- ----------------
TOTAL CURRENT ASSETS 1,117,013.64 (4,592,338.18) 5,966,752.41
INVENTORY 0.00 0.00 280,990.14
CONSTRUCTION WORK IN PROGRESS 595,264.44 0.00 4,223,801.38
CONSTRUCT WIP-DEN 0.00 0.00 41,266,103.95
OFFICE FURNITURE & EQUIPMENT 0.00 0.00 652,713.27
ACC DEPREC-OFF FURN & EQUIP 0.00 0.00 (311,733.40)
PLANT, PROPERTY & EQUIP. 3,655,722.53 0.00 15,599,856.21
ACCM.DEPREC. PP&E (222,261.60) 0.00 (925,598.14)
PREDICTIVE OVERHALL PP&E 0.00 0.00 312,408.10
ACCUM.DEPRE. PEDICT. OVERHALL 0.00 0.00 (30,190.05)
PROJECT DEVELOPMENT COSTS 0.00 0.00 1,143,236.79
---------------- ---------------- ----------------
TOTAL FIXED ASSETS 4,028,725.37 0.00 62,11,588.25
CLOSURE DEPOSITS 0.00 0.00 66,759.00
PATENTS 0.00 0.00 34,742.36
LICENSES 0.00 0.00 101,334.35
TRADEMARKS 0.00 0.00 5,558.20
INVESTMENTS 0.00 (63,005,316.23) 0.00
---------------- ---------------- ----------------
TOTAL ASSETS $ 5,145,739.01 ($ 67,597,654.41) $ 68,386,734.57
================ ================ ================
</TABLE>
<PAGE>
2
EXHIBIT 99.3
4/27/99
DQE Energy Services, Inc. Consolidating Balance Sheet
- ------------------------
December 31, 1998
<TABLE>
<CAPTION>
DQEES DH ENERGY MT ENERGY DQEPI DEN MONMOUTH
LIABILITIES & OWNERS' EQUITY
<S> <C> <C> <C> <C> <C> <C>
CURRENT LIABILITIES:
ACCOUNTS PAYABLE-DLC 0.00 0.00 0.00 0.00 14,729.28 0.00
ACCOUNTS PAYABLE-DQE 63,395.53 0.00 0.00 0.00 0.00 0.00
ACCOUNTS PAYABLE-DQEES 0.00 76,848.45 35,643.31 9,066.00 1,381,173.45 5,076.50
ACCOUNTS PAYABLE - HEINZ 0.00 127,000.00 0.00 0.00 0.00 0.00
ACCOUNTS PAYABLE-OTHERS 323,615.00 297,942.48 0.00 724,000.00 2,297,131.47 317,250.95
FEDERAL TAX PAYABLE-POWER INTL 1,564,385.04 0.00 0.00 0.00 0.00 0.00
PAYROLL WITHHOLDINGS 31,511.03 0.00 0.00 24,588.86 23,631.85 2,167.47
FEDERAL TAX PAYABLE - MONMOUTH 22,947.83 0.00 0.00 0.00 0.00 0.00
FED TAX PAYABLE DH CANADA 116,155.79 0.00 0.00 0.00 0.00 0.00
ACCOUNTS PAYABLE - GST 0.00 0.00 0.00 0.00 0.00 0.00
ACCTS PAYABLE-FIT SEC 29 CR 1,283,918.25 0.00 0.00 0.00 0.00 0.00
FEDERAL INCOME TAXES PAYABLE 0.00 68,907.95 15,306.25 0.00 0.00 0.00
STATE INCOME TAXES PAYABLE 0.00 83,980.77 27,184.66 0.00 0.00 12,925.12
ACCRUED CAPITAL STOCK TAX 7,546.00 27,162.00 8,737.00 0.00 45,450.00 0.00
BRAZIL FEDERAL TAX PAYABLE 0.00 0.00 0.00 8,804.04 0.00 0.00
------------- ------------ ---------- ------------ ------------- -------------
TOTAL CURRENT LIABILITIES 3,413,474.47 681,841.65 86,871.22 766,458.90 3,762,116.05 337,420.04
NOTES PAYABLE - LONG TERM 0.00 0.00 0.00 0.00 0.00 0.00
DEFFERED COMPENSATION PAYABLE 603,389.43 0.00 0.00 0.00 0.00 0.00
------------- ------------ ---------- ------------ ------------- -------------
TOTAL LIABILITIES 4,016,863.90 681,841.65 86,871.22 766,458.90 3,762,116.05 337,420.04
OWNERS' EQUITY:
ADDITIONAL PAID IN CAPITAL 65,535,000.00 3,452,499.26 36,772.63 5,436,311.61 41,125,000.00 11,094,732.73
RETAINED EARNINGS (1,353,061.91) 340,175.59 95,764.57 (1,949,381.70) (260,905.25) 359,080.00
YTD NET INCOME (1,906,180.00) 577,481.47 159,207.15 (947,773.98) (1,546,511.23) 938,867.27
------------- ------------ ---------- ------------ ------------- -------------
TOTAL OWNERS' EQUITY 62,275,758.09 4,370,156.32 291,744.35 2,539,155.93 39,317,583.52 12,392,680.00
------------- ------------ ---------- ------------ ------------- -------------
TOAL LIAB & OWNERS' EQUITY $66,292,621.99 $5,051,997.97 $378,615.57 $3,305,614.83 $43,079,699.57 $12,730,100.04
============= ============ ========== ============ ============= =============
<CAPTION>
DHCANADA ELIMINATIONS TOTAL
<S> <C> <C> <C>
CURRENT LIABILITIES:
ACCOUNTS PAYABLE-DLC 0.00 0.00 14,729.28
ACCOUNTS PAYABLE-DQE 0.00 0.00 63,395.53
ACCOUNTS PAYABLE-DQEES 12,909.36 (1,520,717.07) 0.00
ACCOUNTS PAYABLE - HEINZ 0.00 0.00 127,000.00
ACCOUNTS PAYABLE-OTHERS 618,531.00 0.00 4,578,470.90
FEDERAL TAX PAYABLE-POWER INTL 0.00 (1,564,385.04) 0.00
PAYROLL WITHHOLDINGS 0.00 0.00 81,899.21
FEDERAL TAX PAYABLE - MONMOUTH 0.00 (22,947.83) 0.00
FED TAX PAYABLE DH CANADA 0.00 (116,155.79) 0.00
ACCOUNTS PAYABLE - GST 57,405.69 0.00 57,405.69
ACCTS PAYABLE-FIT SEC 29 CR 0.00 (1,283,918.25) 0.00
FEDERAL INCOME TAXES PAYABLE 0.00 (84,214.20) 0.00
STATE INCOME TAXES PAYABLE 0.00 0.00 124,090.55
ACCRUED CAPITAL STOCK TAX 0.00 0.00 88,895.00
BRAZIL FEDERAL TAX PAYABLE 0.00 0.00 8,804.04
------------ -------------- -------------
TOTAL CURRENT LIABILITIES 688,846.05 (4,592,338.18) 5,144,690.20
NOTES PAYABLE - LONG TERM 2,812,610.86 0.00 2,812,610.86
DEFFERED COMPENSATION PAYABLE 0.00 0.00 603,389.43
------------ -------------- -------------
TOTAL LIABILITIES 3,501,456.91 (4,592,338.18) 8,560,690.49
OWNERS' EQUITY:
ADDITIONAL PAID IN CAPITAL 1,860,000.00 (63,005,316.23) 65,535,000.00
RETAINED EARNINGS 0.00 0.00 (2,768,328.70)
YTD NET INCOME (215,717.90) 0.00 (2,940,627.22)
------------ -------------- -------------
TOTAL OWNERS' EQUITY 1,644,282.10 (63,005,316.23) 59,826,044.08
------------ -------------- -------------
TOAL LIAB & OWNERS' EQUITY $5,145,739.01 ($67,597,654.41) $68,386,734.57
============ ============== =============
</TABLE>
