U-9C-3 1 form_u9c3.htm RULE 58




UNITED STATES
SECURITES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM U-9C-3

QUARTERLY REPORT PURSUANT TO RULE 58

For the quarter ended September 30, 2004




ALLEGHENY ENERGY, INC.
(Name of registered holding company)

800 Cabin Hill Drive, Greensburg, PA 15601
(Address of principal executive offices)




Inquiries concerning this Form U-9C-3 should be directed to: Thomas R. Gardner
Allegheny Energy, Inc.
800 Cabin Hill Drive
Greensburg PA 15601

ITEM 1 — ORGANIZATION CHART

Name
of Reporting
Company
 Energy or
Gas-related
Company
 Date of
Organization
 State
Of
Organization
 Percentage
of Voting
Securities Held
Allegheny Energy, Inc.      (1)                

Allegheny Ventures, Inc.		    (2)        

    Allegheny Energy Solutions, Inc.		    (3)   Energy July 23, 1997   Delaware 100%  

Allegheny Energy Supply		  
  Company, LLC    (4)        

    Buchanan Energy Company of		  
      Virginia, LLC    (5) EnergyMarch 14, 2002 Virginia 100%  

    Allegheny Energy Supply		  
      Development Services, LLC    (6) EnergyOctober 11, 2001   Delaware   100%  


Nature of Business:

(1) Allegheny Energy, Inc. holds directly all of the outstanding securities in Allegheny Ventures, Inc. and holds directly 98.42% of the outstanding voting securities in Allegheny Energy Supply Company, LLC.

(2)
Allegheny Ventures, Inc. holds directly all of the outstanding securities in Allegheny Energy Solutions, Inc.

(3)
Allegheny Energy Solutions, Inc. currently develops competitive generation solutions (i.e. distributed generation, cogeneration, prime power, green power and uninterrupted power source (UPS)) for customers through products such as reciprocating generators, microturbines, steam turbines, combustion turbines, fuel cells, wind turbines and solar cells.

(4)
Allegheny Energy Supply Company, LLC holds 100% ownership in Buchanan Energy Company of Virginia, LLC and Allegheny Energy Supply Development Services, LLC.

(5)
Buchanan Energy Company of Virginia, LLC is a 50% owner of Buchanan Generation, LLC. The generating facility is a merchant power plant from which the capacity, energy and ancillary services are sold to wholesale markets.

(6)
Allegheny Energy Supply Development Services, LLC currently develops electric generation facilities.





ITEM 2 — ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL CONTRIBUTIONS

Company
Contributing
Capital
 Company
Receiving
Capital
 Amount
of Capital
Contribution
None    


ITEM 3 — ASSOCIATE TRANSACTIONS

Part I — Transactions performed by reporting companies on behalf of associate companies

Reporting
Company
Rendering
Services
 Associate
Company
Receiving
Services
 Types of
Services
Rendered
 Direct
Costs
Charged
 Indirect
Costs
Charged
 Cost
of
Capital
 Total
Amount
Billed

No services have been provided by the reporting companies to an associate company to date.


Part II — Transactions performed by associate companies on behalf of reporting companies

Associate
Company
Rendering
Services
 Reporting
Company
Receiving
Services
 Types of
Services
Rendered
 Direct
Costs
Charged
 Indirect
Costs
Charged
 Cost
Of
Capital
 Total
Amount
Billed
(in thousands)
Allegheny Energy
Service Corporation
Allegheny Energy
Solutions, Inc.
Technical support; planning
and implementation of
financial programs; counsel
on corporate, legal and
regulatory matters; general
and administrative
services.
$89
$5,839
 
$5,928

Allegheny Energy
Service Corporation
Allegheny Ventures, Inc.

Technical support; planning
and implementation of
financial programs; counsel
on corporate, legal and
regulatory matters; general
and administrative
services.
$578
$303
 
$881

Allegheny Energy
Service Corporation
Allegheny Energy
Supply Company, LLC
Technical support; planning
and implementation of
financial programs; counsel
on corporate, legal and
regulatory matters; general
and administrative
services.
$10,465
$22,543
 
$33,008





ITEM 4 – SUMMARY OF AGGREGATE INVESTMENT

(in thousands)

Investments in energy-related companies:

Total consolidated capitalization as of September 30, 2004		     $ 6,512,090        line 1    
                                                                                                       
Total capitalization multiplied by 15%                
(line 1 multiplied by 0.15)   $ 976,814        line 2  
                                                                                                       
Greater of $50 million or line 2        $ 976,814   line 3  
                                                                                                       
Total current aggregate investment:                
(categorized by major line of energy-related business)  

Allegheny Ventures, Inc.: (including Allegheny Energy Solutions, Inc.)		   $ 12,028           

Allegheny Energy Supply Company, LLC: (including, Buchanan Energy Company of Virginia, LLC and 		            
Allegheny Energy Supply Development Services, LLC)   $ 30,588           
                                                                                                       
   Total current aggregate investment        $ 42,616
   line 4  
                                                                                                    
  
Difference between the greater of $50 million or 15%                
of capitalization and the total aggregate investment                
of the registered holding company system                
(line 3 less line 4)        $ 934,198   line 5  



Investments in gas-related companies:

None


ITEM 5 — OTHER INVESTMENTS

Major Line
of Energy-Related
Business
 Other
Investment in Last
U-9C-3 Report
 Other
Investment in This
U-9C-3 Report
 Reason for Difference in
Other Investment
None.

ITEM 6 — FINANCIAL STATEMENTS AND EXHIBITS

(A)     Current Period Financial Statements:

Allegheny Energy Solutions, Inc. Statements of Operations for the Three and Nine Months Ended September 30, 2004

Allegheny Energy Solutions, Inc. Balance Sheet at September 30, 2004

Allegheny Ventures, Inc. Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2004

Allegheny Ventures, Inc. Consolidated Balance Sheet at September 30, 2004

Buchanan Energy of Virginia, LLC Statements of Operations for the Three and Nine Months Ended September 30, 2004

Buchanan Energy of Virginia, LLC Balance Sheet at September 30, 2004

Allegheny Energy Supply Development Services, LLC Statements of Operations for the Three and Nine Months Ended September 30, 2004

Allegheny Energy Supply Development Services, LLC Balance Sheet at September 30, 2004

Allegheny Energy Supply Company, LLC Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2004

Allegheny Energy Supply Company, LLC Consolidated Balance Sheet at September 30, 2004











ALLEGHENY ENERGY SOLUTIONS, INC
STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)

Three months ended
September 30, 2004
 Nine months ended
September 30, 2004
Operating revenues     $ 11,510   $ 20,356  

Operating expenses:		  
    Operations and maintenance    11,441    23,690  
    Depreciation and amortization    43    129  
    Taxes other than income taxes    33    70  
      Total operating expenses    11,517    23,889  
Operating loss    (7  )  (3,533  )

Other income, net		    26    483  
Income (loss) before income taxes    19    (3,050 )
Income tax benefit    331    1,405  
Net income (loss)   $ 350   $ (1,645 )

ALLEGHENY ENERGY SOLUTIONS, INC
BALANCE SHEET
(in thousands)
(unaudited)

September 30, 2004
ASSETS        
Current assets:  
    Cash and cash equivalents   $ 5,740  
    Accounts receivable:  
      Other    3,898  
      Allowance for uncollectible accounts    (4 )
      Accounts receivable from affiliates, net    5,499  
    Deferred income taxes    1,187  
    Taxes receivable    2,123  
    Other    5  
      Total current assets    18,448  
Property, plant and equipment:  
    In service, at original cost    860  
    Accumulated depreciation    (301 )
      Total property, plant and equipment    559  
Other assets    27  
Deferred income taxes    1,549  
Total assets   $ 20,583  
LIABILITIES AND STOCKHOLDER’S EQUITY  
Current liabilities:  
    Accounts payable   $ 1,447  
    Accrued taxes    8  
    Other    3,443  
      Total current liabilities    4,898  
Other liabilities    5  
Stockholder’s equity    15,680  
Total liabilities and stockholder’s equity   $ 20,583  

ALLEGHENY VENTURES, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)

Three months ended
September 30, 2004
 Nine months ended
September 30, 2004
Operating revenues     $ 15,818   $ 31,872  

Operating expenses:		  
    Operations and maintenance    14,787    39,721  
    Depreciation and amortization    684    2,090  
    Taxes other than income taxes    233    660  
      Total operating expenses    15,704    42,471  
Operating income (loss)    114    (10,599 )

Other income (expense), net		    245    (1,458 )

Interest expense		    --    2  
Income (loss) before income taxes    359    (12,059 )

Income tax benefit		    214    5,041  
Net income (loss)   $ 573   $ (7,018 )


ALLEGHENY VENTURES, INC
CONSOLIDATED BALANCE SHEET
(in thousands)
(unaudited)

September 30, 2004
ASSETS        
Current assets:  
    Cash and cash equivalents   $ 9,209  
    Accounts receivable:  
      Customer    2,267  
      Other    5,003  
      Allowance for uncollectible accounts    (383 )
    Materials and supplies    3,092  
    Deferred income taxes    2,719  
    Prepaid taxes    181  
    Taxes receivable    4,456  
    Other    21  
      Total current assets    26,565  
Property, plant, and equipment:  
    In service, at original cost    40,814  
    Accumulated depreciation    (8,046 )
      Subtotal    32,768  
    Construction work in progress    2,532  
      Total property, plant and equipment    35,300  
Investments and other assets:  
    Unregulated investments    3,144  
    Other    365  
      Total investments and other assets    3,509  
Deferred charges:  
    Deferred income taxes    20,887  
    Other    71  
      Total deferred charges    20,958  
Total assets   $ 86,332  
LIABILITIES AND STOCKHOLDER’S EQUITY  
Current liabilities:  
    Accounts payable   $ 3,585  
    Accounts payable to affiliates, net    6,013  
    Other    3,073  
      Total current liabilities    12,671  
Other liabilities    1,185  
Stockholder’s equity    72,476  
Total liabilities and stockholder’s equity   $ 86,332  

BUCHANAN ENERGY COMPANY OF VIRGINIA, LLC
STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)

Three months ended
September 30, 2004
 Nine months ended
September 30, 2004
Operating revenues     $ --   $ --  

Operating expenses		    --    --  
Operating income (loss)    --    --  

Other expenses, net		    (310 )  (869 )
Loss before income taxes    (310 )  (869 )
Income tax benefit    119    233  
Net loss   $ (191 ) $ (636 )

BUCHANAN ENERGY COMPANY OF VIRGINIA, LLC
BALANCE SHEET
(in thousands)
(unaudited)

September 30, 2004
ASSETS        
Taxes receivable   $ 56  

Unregulated investments		    27,250  

Deferred income taxes		    1,665  
Total assets   $ 28,971  
LIABILITIES AND MEMBER’S EQUITY  
Taxes payable   $ 2,532  

Member’s equity		    26,439  
Total liabilities and member’s equity   $ 28,971  


ALLEGHENY ENERGY SUPPLY DEVELOPMENT SERVICES, LLC
STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)

Three months ended
September 30, 2004
 Nine months ended
September 30, 2004
Operating revenues     $ --   $ --  

Operating expenses		    --    (106 )
Operating income    --    106  

Other income, net		    --    113  
Income before income taxes    --    219  

Income tax expense		    10    171  
Net (loss) income   $ (10 ) $ 48  


ALLEGHENY ENERGY SUPPLY DEVELOPMENT SERVICES, LLC
BALANCE SHEET
(in thousands)
(unaudited)

September 30, 2004
ASSETS        
Current assets:  
    Cash and cash equivalents   $ 8,198  
    Deferred income taxes    4,360  
    Taxes receivable    62  
      Total current assets    12,620  
Deferred income taxes    3,247  
Total assets   $ 15,867  

LIABILITIES AND MEMBER’S EQUITY		  
Current liabilities:  
    Accounts payable to affiliates, net   $ 539  
    Taxes payable    230  
      Total current liabilities    769  
Deferred credits and other liabilities    185  
Minority interest    10  

Member’s equity		    14,903  

Total liabilities and member’s equity		   $ 15,867  


ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)

Three months ended
September 30, 2004
 Nine months ended
September 30, 2004
Operating revenues     $ 345,502   $ 961,452  

Operating expenses:		  
    Fuel consumed in electric generation    129,412    369,621  
    Purchased power and transmission    26,689    74,987  
    Operations and maintenance    66,412    241,281  
    Depreciation and amortization    27,705    82,411  
    Taxes other than income taxes    12,667    35,174  
      Total operating expenses    262,885    803,474  
Operating income    82,617    157,978  

Other income, net		    288    1,173  

Interest expense		    47,248    166,955  
Income (loss) from continuing operations before  
income taxes and minority interest    35,657    (7,804 )

Income tax expense (benefit)		    7,938    (14,893 )

Minority interest in net income of subsidiaries		    1,546    4,488  
Income from continuing operations    26,173    2,601  

Loss from discontinued operations, net of tax		    (402,344 )  (416,181 )
Net loss   $ (376,171 ) $ (413,580 )


ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in thousands)
(unaudited)

September 30, 2004
ASSETS        
Current assets:  
    Cash and cash equivalents   $ 167,210  
    Accounts receivable:  
      Wholesale and other    26,069  
      Allowance for uncollectible accounts    (2,608 )
    Materials and supplies    49,114  
    Fuel    31,413  
    Deferred income taxes    24,603  
    Prepaid taxes    18,949  
    Assets held for sale    2,928  
    Commodity contracts    26,071  
    Collateral deposits    121,144  
    Restricted funds    11,320  
    Other    7,054  
      Total current assets    483,267  
Property, plant and equipment:  
    Generation    4,645,889  
    Transmission    77,777  
    Other    15,150  
    Accumulated depreciation    (2,197,590 )
      Subtotal    2,541,226  
    Construction work in progress    101,325  
      Total property, plant and equipment    2,642,551  
Investments and other assets:  
    Assets held for sale    325,019  
    Goodwill    367,287  
    Investments in unconsolidated affiliate    26,168  
    Other    18,771  
      Total investments and other assets    737,245  
Deferred charges:  
    Commodity contracts    4,829  
    Deferred income taxes    68,617  
    Other    37,481  
      Total deferred charges    110,927  
Total assets   $ 3,973,990  


ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (continued)
(in thousands)
(unaudited)

September 30, 2004
LIABILITIES AND MEMBERS’ EQUITY        
Current liabilities:  
    Long-term debt due within one year   $ 12,391  
    Accounts payable    118,404  
    Accounts payable to affiliates, net    32,698  
    Accrued taxes    20,230  
    Commodity contracts    53,450  
    Accrued interest    56,256  
    Other    16,162  
      Total current liabilities    309,591  
Long-term debt    3,037,069  

Deferred credits and other liabilities:		  
    Commodity contracts    59,446  
    Investment tax credit    57,760  
    Other    116,276  
      Total deferred credits and other liabilities    233,482  
Minority interest    44,251  

Members’ equity		    349,597  
Total liabilities and members’ equity   $ 3,973,990  


SIGNATURE

     Pursuant to the requirements of the Public Utilities Holding Company Act of 1935, Allegheny Energy, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.







November 29, 2004		 ALLEGHENY ENERGY,INC.


BY: /S/ Thomas R. Gardner
THOMAS R. GARDNER
Vice President, Controller &
Chief Accounting Officer





















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