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), Start Printed Page 4240512(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. For the twelve months ended December 31, 1999, Monongahela Power contributed $673 million or 24% of Allegheny's revenues.
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.
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.Start Signature
For the Commission by the Division of Investment Management, pursuant to delegated authority.
Jonathan G. Katz,
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).Back to Citation
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.”Back to Citation
[FR Doc. 00-17281 Filed 7-7-00; 8:45 am]
BILLING CODE 8010-01-M