UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
April 13, 1998
DQE, Inc.
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(Exact name of registrant as specified in its charter)
Pennsylvania 1-10290 25-159843
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(State or other (Commission File (I.R.S.
jurisdiction of Number) Employer
incorporation or Identification No.)
organization)
Cherrington Corporate Center, Suite 100
500 Cherrington Parkway, Coraopolis, Pennsylvania 15108-3184
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412) 262-4700
N/A
(Former name or former address, if changed since last report.)
Items 1-4. Not applicable.
Item 5. Other Events.
Duquesne to Join Midwest Independent System Operator. On
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April 13, 1998, Registrant's electric utility subsidiary,
Duquesne Light Company (Duquesne) announced that it has applied
for membership in the Midwest Independent System Operator (MISO),
a regional electricity transmission organization, and will join
upon completion of the proposed merger of Registrant with
Allegheny Energy, Inc. (AYE). Executives from Registrant and AYE
recently notified the Federal Energy Regulatory Commission (FERC)
of their intention to join the MISO, and that they would not
withdraw from the MISO without the prior approval of the FERC.
Nine companies committed to formation of the MISO by filing
for approval with the FERC in January 1998. The companies are:
Cinergy Corp.; Commonwealth Edison Company; Wisconsin Electric
Power Company; Hoosier Energy Rural Electric Cooperative; Wabash
Valley Power Association; Ameren; Kentucky Utility Company;
Louisville Gas & Electric Company; Illinois Power Company; and
Central Illinois Light Company.
Registrant Responds to Administrative Law Judges'
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Recommended Decisions. On April 14, 1998, Duquesne filed
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exceptions to the recommendations made March 25 by Pennsylvania
Public Utility Commission (PUC) administrative law judges
regarding Duquesne's restructuring plan. Also on April 14,
Registrant and AYE jointly filed exceptions to the PUC
administrative law judges' recommendation that approval of the
proposed merger be delayed by up to 18 months until market power
concerns have been addressed.
In its restructuring plan filed in August 1997, Duquesne
proposed a market-based approach to determining the value of its
generating assets, with a final market test to be applied in
2003, when electricity markets are more fully developed. The
administrative law judge did not support this approach, citing
the delay until 2003 as inappropriate, and recommended instead
either an immediate auction of Duquesne s generating assets if
the proposed DQE/AYE merger is not consummated, or an
administrative determination of the value of such assets if the
proposed DQE/AYE merger is consummated. In its exceptions,
Duquesne is seeking clarification of the administrative law
judge's recommendation. Also in its exceptions, Duquesne
reaffirms its fundamental premise that market data should be used
to set the value of its generating assets.
In their joint exceptions, Registrant and AYE commit to
mitigate the potential market power of the new company by joining
the MISO and by relinquishing control of the output of Duquesne's
570-megawatt Cheswick Power Station (Cheswick) for a minimum of
two years or until the MISO has been approved. Both actions
would occur immediately upon completion of the proposed merger.
Registrant and AYE further commit to issue a request for
proposals to sell the output of Cheswick within a month of
securing all required regulatory approvals for the proposed
merger. Duquesne will continue to own and operate Cheswick.
Both Registrant and AYE are urging the PUC to adopt the plan for
a final valuation of generating assets in 2003.
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Reply exceptions may be filed until April 24, 1998. The PUC
is scheduled to consider all exceptions and the recommended
decisions in non-binding polls at its April 30, 1998, meeting. A
final vote is set for the May 21, 1998, meeting.
Items 6-9. Not applicable.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
DQE, INC.
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(Registrant)
Date April 17, 1998 /s/Gary L. Schwass
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(Signature)
Gary L. Schwass
Executive Vice President
and Chief Financial Officer
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