[Federal Register Volume 69, Number 191 (Monday, October 4, 2004)]
[Notices]
[Pages 59282-59283]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2463]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27897]


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

September 28, 2004.
    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 October 20, 2004, 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 October 20, 2004, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

Allegheny Energy, Inc. (70-10247)

    Allegheny Energy, Inc. (``Allegheny''), a registered holding 
company under the Act, 800 Cabin Hill Drive, Greensburg, Pennsylvania 
15601, has filed a declaration (``Declaration'') under section 12(d) 
and rule 44 of the Act.
    Allegheny requests authorization to sell its nine percent ownership 
interest in Ohio Valley Electric Corporation (``OVEC'') to Buckeye 
Power Generating, LLC (``Buckeye Power''), an affiliate of Buckeye 
Power Inc. OVEC is a public utility company under the Act.
    OVEC was formed in the early 1950s by a group of holding companies 
and utilities located in the Ohio Valley region in response to the 
request of the United States Atomic Energy Commission (``AEC'') to 
supply the electric power and energy necessary to meet the needs of a 
uranium enrichment plant being built by the AEC in Pike County, Ohio. 
The holding companies that directly or indirectly own 10 percent or 
more of OVEC's stock, each of which is a registered holding company, 
are: Allegheny (12.5%),\1\ American Electric Power Company, Inc. 
(``AEP'') (44.2%) and FirstEnergy Corp. (``FirstEnergy'') (20.5%).\2\
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    \1\ In addition to the nine percent ownership interest in OVEC 
that is the subject of this Declaration, Allegheny owns another 
direct 3.5 percent interest in OVEC. Monongahela receives power from 
OVEC under an entitlement to power associated with this 3.5 percent 
interest. Allegheny is not proposing to transfer this 3.5 percent 
interest at this time.
    \2\ The following is a complete list of owners of OVEC's stock: 
Allegheny (12.5%); AEP (39.9%); Cincinnati Gas & Electric Company 
(9.0%); Columbus Southern Power Company, a subsidiary of AEP (4.3%); 
The Dayton Power and Light Company (4.9%); Kentucky Utilities 
Company (2.5%); Louisville Gas and Electric Company (4.9%); Ohio 
Edison Company, a subsidiary of FirstEnergy (16.5%); Southern 
Indiana Gas and Electric Company (1.5%); and The Toledo Edison 
Company, a subsidiary of FirstEnergy (4.0%). Each of these companies 
is either an original owner of OVEC's stock or a successor to an 
original owner. These companies are referred to in this Declaration 
as the ``Sponsoring Companies.''
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    OVEC owns two coal-fired generating stations: (1) The Kyger Creek 
Plant in Cheshire, Ohio, which has a generating capacity of 1,075 
megawatts, and (2) the Clifty Creek Plant in Madison, Indiana, which 
has a generating capacity of 1,290 megawatts and is owned by OVEC's 
wholly-owned subsidiary, Indiana-Kentucky Electric Corporation. 
Originally, the Department of Energy (``DOE'') purchased essentially 
all of the generating capacity of OVEC's generating facilities. 
However, DOE terminated its purchase agreement on April 30, 2003, and 
each of the Sponsoring Companies currently is entitled to its specified 
share of all net power and energy produced by OVEC's two generating 
stations.\3\
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    \3\ By letter dated September 29, 2000, the DOE notified OVEC 
that it had elected to terminate the power agreement as of April 30, 
2003. Allegheny understands that the DOE currently maintains its 
uranium enrichment plant in ``cold standby'' status and is exploring 
various options for the plant and the Ohio site. OVEC currently 
provides retail service to DOE through an ``arranged power'' 
agreement under which OVEC procures power and energy for DOE at cost 
from third parties.
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    Buckeye Power, Inc., is a member-owned generation and transmission 
cooperative based in Columbus, Ohio that supplies power and energy to 
all the electric distribution cooperatives that serve customers in 
Ohio. The certified service territory of these distribution 
cooperatives covers nearly 40 percent of the land area in the State and 
encompasses 77 of Ohio's 88 counties.
    On May 17, 2004, Allegheny signed a purchase agreement (``Purchase 
Agreement'') under which Allegheny will sell a nine percent equity 
interest in OVEC, and Allegheny Energy Supply Company, LLC (``AE 
Supply''), will assign its rights to nine percent of the power 
generated by OVEC, to Buckeye Power for $102 million in cash and the 
assumption of approximately $37 million in debt by Buckeye Power 
(``Purchase Price''). Of the total cash component of the Purchase 
Price, $7,140,000 represents the price for the transfer of Allegheny's 
nine percent equity interest in OVEC, the transaction for which 
authority is being sought in this Application. The remainder represents 
the price for the assignment of AE Supply's rights under the OVEC 
Inter-Company Power Agreement (``OVEC Power Agreement'') to nine 
percent of the power generated by OVEC.\4\
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    \4\ AE Supply will retain the right to nine percent of the power 
from OVEC until March 12, 2006, at which time Buckeye Power will 
begin to receive the power. The time for receipt of power by Buckeye 
Power may be accelerated upon occurrence of certain events relating 
to the financial condition of Allegheny.
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    Allegheny maintains that the sale and assignment of these various 
interests is consistent with Allegheny's strategic goals of improving 
its financial strength

[[Page 59283]]

by reducing debt and of refocusing its attention on the generation 
assets it owns and operates within the PJM Interconnection (``PJM'') 
territory. Allegheny will use the net proceeds from the OVEC sale to 
reduce outstanding debt and for general corporate purposes.
    Allegheny states that the Purchase Price and other definitive terms 
for the sale of OVEC reflected in the Purchase Agreement--negotiated by 
representatives of the parties over a number of months--are the result 
of arm's-length bargaining, and the Purchase Price constitutes fair and 
adequate consideration for the sale and assignment of Allegheny's 
interests in OVEC.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
 [FR Doc. E4-2463 Filed 10-1-04; 8:45 am]
BILLING CODE 8010-01-P