Holding Company Act Release 27585
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35-27585; 70-7888)
Allegheny Energy, Inc., et al.
Supplemental Order Authorizing New Participant in System Money Pool and Increasing Maturity Date for Notes
October 24, 2002
Allegheny Energy, Inc. ("Allegheny"), Hagerstown, Maryland, a registered public utility holding company; its direct wholly owned public utility company subsidiaries Monongahela Power Company ("Monongahela Power"), Fairmont, West Virginia, The Potomac Edison Company ("Potomac Edison"), Hagerstown, Maryland and West Penn Power Company ("West Penn"), Greensburg, Pennsylvania; its indirect wholly owned public utility subsidiaries Mountaineer Gas Company (Mountaineer Gas"),1 Charleston, West Virginia and Allegheny Generating Company ("AGC"),2 Hagerstown, Maryland; and Allegheny Energy Service Corporation, ("AESC"), a direct service company subsidiary of Allegheny, Greensburg, Pennsylvania (collectively "Applicants") have filed a post-effective amendment with the Securities and Exchange Commission ("Commission") under sections 6, 7, 9(a)(1), 10, 12(d), 12(f) and 13 of the Public Utility Holding Company Act of 1935, as amended ("Act"), and rules 45, 53 and 54 under the Act to their application-declaration originally filed under sections 6(a), 7, 9(a), 10 and 12(b) of the Act and rules 43, 45, 53 and 54 under the Act ("Application"). The Commission issued a notice of the post-effective amendment on September 27, 2002 (HCAR No. 27570).
By orders dated January 29, 1992 (HCAR No. 25462), February 28, 1992 (HCAR No. 25481), July 14, 1992 (HCAR No. 25581), November 5, 1993 (HCAR No. 25919), November 28, 1995 (HCAR No. 26418), April 18, 1996 (HCAR No. 26505), December 23, 1997 (HCAR No. 26804), May 19, 1999 (HCAR No. 27030), October 8, 1999 (HCAR No. 27084), and December 17, 2001 (HCAR No. 27475) ("Prior Orders"), the Commission authorized, among other things, Allegheny, Monongahela, Potomac Edison, West Penn, AGC and AESC to establish and participate in a system money pool ("Money Pool") and to issue short-term debt in the form of notes payable to banks ("Notes") and commercial paper ("Commercial Paper"). The Prior Orders provide that Notes have a maturity of not more than 270 days after the date of issuance or renewal.
In this post-effective amendment, Applicants seek authorization, through December 31, 2005, for Mountaineer Gas to participate in the Money Pool and to expand the term for Notes issued in this file from 270 days to 364 days. Applicants are not seeking any other changes to the Money Pool agreement previously approved.
Applicants seek authority to add Mountaineer Gas to the Money Pool as a borrower and a lender, subject to the terms and conditions of the Money Pool agreement authorized in the Prior Orders. Applicants state Mountaineer Gas, like Monongahela, Potomac Edison, and West Penn, will use the proceeds of the borrowings from the Money Pool to operate its business as a natural gas utility, including the financing of construction and property acquisitions. Mountaineer's authority to issue short-term debt is limited to an aggregate amount not to exceed $100 million, 3 which limit will apply to any borrowings from the Money Pool.
Applicants also seek to modify the Prior Orders to conform the Notes maturity to the general short-term debt maturity of 364 days.4 Applicants state the modification will allow Applicants to obtain bank financing consistent with the terms and documentation typically required by lending institutions, providing Applicants more ready access to bank financing or competitive rates and terms.
Allegheny states, for purposes of rule 54, that the conditions specified in rule 53(a) are satisfied and that none of the adverse conditions specified in rule 53(b) exist. As a result, the Commission will not consider the effect on the Allegheny system of the capitalization or earnings of any Allegheny subsidiary that is an exempt wholesale generator or foreign utility company, as each is defined in sections 32 and 33 of the Act, respectively, in determining whether to approve the proposed transaction.
Applicants state that no fees, commissions and expenses are anticipated in connection with the proposed transactions. The Pennsylvania Public Utility Commission, the State Corporation Commission of Virginia and the Public Service Commission of West Virginia each approved Mountaineer Gas' participation in the Money Pool. Applicants state that no other state or federal commission, other than this Commission, has jurisdiction over the proposed transactions.
Due notice of the filing of the post-effective amendment to the Application has been given in the manner prescribed by rule 23 under the Act, and no hearing has been requested of or ordered by the Commission. Based on the facts in the record, the Commission finds that the applicable standards of the Act are satisfied and that no adverse findings are necessary.
IT IS ORDERED that the post-effective amendment to the Application be permitted to become effective immediately, subject to the terms and conditions prescribed in rule 24 under the Act.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
Margaret H. McFarland
1 Mountaineer Gas is wholly owned by Monongahela.
2 AGC is jointly owned by Monongahela (27%) and Allegheny Energy Supply Company, LLC (73%) both direct wholly owned public utility subsidiaries of Allegheny.
3 HCAR No. 27210 (August 14, 2000) in SEC File No. 70-9625.
4 Allegheny was authorized in SEC File No. 70-9897 (HCAR No. 27486, December 31, 2001) to issue short-term debt with a general maturity of not more than 364 days. Allegheny was specifically authorized to issue Notes and Commercial Paper with a maturity of not more that 270 days after the date of issuance or renewal. The Notes maturity was later extended to 364 days in HCAR No. 27521 (April 17, 2002).