[Federal Register Volume 65, Number 132 (Monday, July 10, 2000)]
[Notices]
[Pages 42404-42405]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17281]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27195]


Filings Under the Public Utility Holding Company Act of 1935, as 
Amended (``Act'')

June 30, 2000.
    Notice is hereby given that the following filing(s) has/have been 
made with the Commission pursuant to provisions of the Act and rules 
promulgated under the Act. All interested persons are referred to the 
application(s) and/or declaration(s) for complete statements of the 
proposed transaction(s) summarized below. The application(s) and/or 
declaration(s) and any amendment(s) is/are available for public 
inspection through the Commission's Branch of Public Reference.
    Interested persons wishing to comment or request a hearing on the 
application(s) and/or declaration(s) should submit their views in 
writing by July 25, 2000, to the Secretary, Securities and Exchange 
Commission, Washington, DC 20549-0609, and serve a copy on the relevant 
applicant(s) and/or declarant(s) at the address(es) specified below. 
Proof of service (by affidavit or, in the case of an attorney at law, 
by certificate) should be filed with the request. Any request for 
hearing should identify specifically the issues of facts or law that 
are disputed. A person who so requests will be notified of any hearing, 
if ordered, and will receive a copy of any notice or order issued in 
the matter. After July 25, 2000, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

Allegheny Energy, Inc., et al. (70-9625)

    Allegheny Energy, Inc. (``Allegheny''), 10435 Downsville Pike, 
Hagerstown, Maryland 21470, a registered public utility holding 
company, Monongahela Power Company (``Monongahela Power''), 1310 
Fairmont Avenue, Fairmont, West Virginia 23219, a wholly owned 
combination gas and electric utility subsidiary of Allegheny and 
Mountaineer Gas Company (``Mountaineer Gas''), 414 Summers Street, 
Charleston, West Virginia 25301, an indirectly owned gas utility 
subsidiary of Energy Corporation of America (``ECA''), a Colorado 
public utility holding company claiming exemption from registration 
under section 3(a)(1) by rule 2 under the Act (collectively, 
``Applicants''), have filed an application-declaration under sections 
3(a)(2), 6, 7, 9(a), 10, 11(b),

[[Page 42405]]

12(b) and 13(b) of the Act and rules 45, 54, 90 and 91 under the Act.
    Allegheny proposes to acquire 100% of the outstanding securities of 
Mountaineer Gas. Mountaineer Gas is a directly owned subsidiary of 
Eastern Systems Corporation (``ESC''), a West Virginia holding company 
claiming exemption from registration under section 3(a)(1) by rule 2 
under the Act and an indirectly owned subsidiary of ECA. Allegheny, ESC 
and ECA have entered into a stock purchase agreement under which 
Monongahela Power, as Allegheny's assignee, proposes to acquire 100% of 
the outstanding securities of Mountaineer Gas for approximately $223 
million in cash and the assumption of $100 million in long-term debt 
(``Transaction''). The purchase price is subject to adjustment after 
closing based upon the closing date balance sheet.
    Allegheny has three regulated public utility companies: Mononghela 
Power, a combination electric and gas utility which provides service to 
customers in West Virginia and Ohio; West Penn Power Company, an 
electric utility which provides service to customers in Pennsylvania; 
and The Potomac Edison Company, an electric utility which provides 
services to customers in Maryland, West Virginia, and Virginia. 
Collectively, the Allegheny system utilities do business as Allegheny 
Power. Allegheny Power, operating as a combination electric and gas 
system, delivers electric and gas to 1.4 million customers. Allegheny 
has several nonutility subsidiaries as well. For the twelve months 
ended December 31, 1999, Allegheny's revenues were approximately $2.8 
billion.
    Monongahela Power is headquartered in Fairmont, West Virginia. 
Monongahela Power provides electric service to approximately 351,000 
West Virginia customers and approximately 28,000 Ohio customers. 
Monongahela Power, through its West Virginia Power gas division, 
provides natural gas service to approximately 24,000 customers in West 
Virginia.\1\ For the twelve months ended December 31, 1999, Monongahela 
Power contributed $673 million or 24% of Allegheny's revenues.
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    \1\ See Allegheny Energy, Inc., et al., Holding Co. Act Release 
No. 27121 (Dec. 23, 1999) (approving the retention of the purchased 
electric and gas assets of West Virginia Power).
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    Mountaineer Gas provides utility service to approximately 200,000 
customers throughout West Virginia, including the cities of Wheeling, 
Martinsburg, Beckley, Huntington and Charleston. Mountaineer Gas' 
principal place of business is located in Charleston, West Virginia. 
Mountaineer Gas wholly owns Mountaineer Gas Services, which is 
primarily engaged in providing energy procurement and marketing 
services to Mountaineer Gas and owns approximately 375 wells and has 
gas storage facilities under contract. For the twelve months ended 
December 31, 1999, Mountaineer Gas had revenues of approximately $174 
million. Mountaineer Gas' regulated activities contributed $162 
million, or 94% of those revenues.
    Allegheny seeks authorization to issue up to $162 million in long-
term debt securities. Additionally, Allegheny seeks authorization to 
make a capital contribution of up to $165 million to Monongahela Power. 
The contribution will be funded through the requested debt securities 
issuance and $3 million in general funds. The contribution will be made 
in a combination of cash, guarantees or loans.
    Monongahela Power seeks authority to issue up to $165 million in 
long-term debt securities for the purpose of acquiring Mountaineer Gas. 
Additionally, Monongahela Power seeks authorization to issue loans and 
guarantees to Mountaineer Gas in an aggregate amount up to $100 
million. The amount of loans and guarantees issued is contingent upon 
the amount of Mountaineer Gas' debt assumed in the Transaction.
    Upon completion of the acquisition, Mountaineer Gas seeks authority 
to issue up to $100 million in short-term debt. The short-term debt 
will be in the form of commercial paper and bank borrowings. The 
Applicants state that the short-term debt will be used primarily for 
financing ongoing operations.
    All of the requested financing authority will have interest rates, 
fees, and expenses comparable to those obtainable by comparable 
entities issuing comparable securities with the same or similar terms 
and maturities.
    The acquisition of the securities of Mountaineer Gas will be 
accounted for under the purchase method of accounting.
    Following the acquisition of 100% of the securities of Mountaineer 
Gas, Mountaineer Gas will become a wholly owned subsidiary of 
Monongahela Power. Because Monongahela Power will acquire more than 10% 
of the stock of Mountaineer Gas, the Applicants are requesting an order 
under section 3(a)(2) of the Act exempting Monongahela Power from the 
provisions of the Act applicable to holding companies.\2\
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    \2\ A ``holding company'' is defined in section 2(a)(7) of the 
Act to include any company that directly or indirectly owns 10% or 
more of the outstanding voting securities of a public utility 
company. Section 2(a)(5) defines a ``public-utility company'' to 
mean an electric utility company or a gas utility company. Section 
3(a)(2) provides an exemption if the holding company is 
``predominantly a public-utility company whose operations as such do 
not extend beyond the State in which it is organized and States 
contiguous thereto.''
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    Once Mountaineer Gas becomes a subsidiary of Monongahela Power, the 
Applicants propose that Allegheny Energy Service Corporation, 
Allegheny's service company, will act as a service company for 
Mountaineer Gas.

    For the Commission by the Division of Investment Management, 
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 00-17281 Filed 7-7-00; 8:45 am]
BILLING CODE 8010-01-M