Exhibit (a)(1)(iii)
ALLEGHENY ENERGY, INC.
ALLEGHENY CAPITAL TRUST I
NOTICE
Offer of Premium for Conversion of Outstanding
11 7/8% Mandatorily Convertible Trust Preferred Securities
of
Allegheny Capital Trust I
(CUSIP No. 017271AA5)
into
Shares of Authorized but Unissued Common Stock
of
Allegheny Energy, Inc.
and
Solicitation of Consents for Proposed Amendments to the
Indenture Governing Allegheny Energy, Inc.'s 11 7/8% Notes due 2008
THE OFFER AND CONSENT SOLICITATION WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME ON APRIL 20, 2005, OR AT SUCH OTHER TIME IF THIS DATE IS EXTENDED OR
TERMINATED BY ALLEGHENY ENERGY, INC. AND ALLEGHENY CAPITAL TRUST I (THE
"EXPIRATION DATE").
April 6, 2005
To our Clients:
This notice, the offering circular dated March 23, 2005, as amended on
April 6, 2005 (the "Offering Circular") of Allegheny Energy, Inc., a Maryland
corporation ("Allegheny") and Allegheny Capital Trust I, a statutory business
trust formed under the laws of the state of Delaware and a wholly-owned
subsidiary of Allegheny (the "Trust") and the consent and letter of transmittal
(the "Consent and Letter of Transmittal") have been delivered to you in
connection with Allegheny's offer to holders of the Preferred Securities of the
right to receive for each $1,000 in Liquidation Amount of Preferred Securities
tendered, $160.00 in cash, which represents (i) $148.44, the nominal amount of
the remaining regularly scheduled distributions from March 15, 2005 through
June 15, 2006 (the first date on which Allegheny may redeem any or all of the
11 7/8% Notes, irrespective of the aggregate principal amount of 11 7/8% Notes
outstanding, and the date that the Preferred Securities become subject to the
mandatory conversion provisions of the Declaration of Trust), and (ii) $11.56,
an incentive payment to encourage holders to tender and consent, if such
holders agree to convert their Preferred Securities into shares of Allegheny's
common stock, par value $1.25 per share, during the period commencing on the
date of the Offering Circular through the Expiration Date. Capitalized terms
not defined herein shall have the respective meanings ascribed to them in the
Offering Circular.
Enclosed for your consideration is material relating to the offer and
consent solicitation by Allegheny and the Trust, upon the terms and subject to
the conditions described in the Offering Circular and the Consent and Letter of
Transmittal
You do not have to tender all of your Preferred Securities to
participate in the offer. You may withdraw your tender of Preferred Securities
at any time prior to the Expiration Date.
By tendering your Preferred Securities, you will automatically be
consenting to the Proposed Amendments to the Indenture. A holder may not
consent to the Proposed Amendments without tendering the Preferred Securities
related thereto.
The material relating to the offer and consent solicitation is being
forwarded to you as the beneficial owner of the Preferred Securities held by us
for your account or benefit but not registered in your name. A tender of any of
the Preferred Securities and the related consent with respect to any such
Preferred Securities may only be made by us as the registered holder of record
and pursuant to your instructions. Therefore, we request instructions as to
whether you wish us to tender on your behalf the Preferred Securities held by
us for your account, pursuant to the terms and conditions set forth in the
accompanying Offering Circular and Consent and Letter of Transmittal.
We urge you to read carefully the Offering Circular, the Consent and
Letter of Transmittal and the other materials provided herewith before
instructing us to tender your Preferred Securities. Please note, we cannot
validly tender Preferred Securities without you properly completing and
submitting the Notice of Conversion no later than 12:00 midnight, New York City
time, on the Expiration Date.
Your instructions should be forwarded to us as promptly as possible in
order to permit us to tender your Preferred Securities and deliver your consent
to the Proposed Amendments in accordance with the provisions of the Offering
Circular and Consent and Letter of Transmittal. Please note that tenders of
Preferred Securities must be received by the Expiration Date. Any Preferred
Securities tendered pursuant to the offer and consent solicitation may be
withdrawn at any time before the Expiration Date.
Your attention is directed to the following:
1. The offer is for any and all of the Preferred Securities.
2. The offer is subject to the conditions described in the
Offering Circular under the caption "The Offer and Consent
Solicitation -- Conditions to the Offer and Consent
Solicitation."
3. If you desire to tender any Preferred Securities and deliver
your consent pursuant to the offer and consent solicitation,
your instructions should be forwarded to us as promptly as
possible in order to permit us to tender the Preferred
Securities and deliver a consent on your behalf no later than
12:00 midnight, New York City time, on the Expiration Date.
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4. You may not validly tender Preferred Securities without
delivering a consent to the Proposed Amendments. You may not
validly deliver a consent to the Proposed Amendments without
tendering your Preferred Securities in the offer and consent
solicitation.
5. You may not validly tender Preferred Securities without
properly completing and submitting the Notice of Conversion
no later than 12:00 midnight, New York City time, on the
Expiration Date.
If you wish to have us tender your Preferred Securities held by us for
your account or benefit and deliver your consent, please so instruct us by
completing, executing and returning to us the instruction form that appears
below, allowing sufficient time for us to tender on your behalf prior to the
Expiration Date. The accompanying Consent and Letter of Transmittal is
furnished to you for informational purposes only and may not be used by you to
tender Preferred Securities.
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INSTRUCTIONS WITH RESPECT TO THE OFFER AND
CONSENT SOLICITATION
The undersigned acknowledge(s) receipt of your letter dated , 2005,
and the enclosed materials referred to therein relating to the offer and the
consent solicitation with respect to the Preferred Securities.
This will instruct you to tender the Liquidation Amount of Preferred
Securities indicated below held by you for the account or benefit of the
undersigned and automatically deliver the undersigned's consent to the Proposed
Amendments to the Indenture with respect to the Liquidation Amount of Preferred
Securities indicated below, pursuant to the terms of and conditions set forth
in the Offering Circular and the Consent and Letter of Transmittal.
Liquidation Amount of Preferred Securities, with respect to which
consent to the Proposed Amendments is given, and which are to be tendered
unless otherwise indicated:
[ ] Please do not tender any Preferred Securities held by you for my account.
Liquidation Amount Tendered:* Offer Consideration:
----------------------------- --------------------
$_________________________________________ Common Stock plus cash
$_________________________________________ Common Stock plus cash
Total Liquidation Amount Tendered: $_____________________
* I (we) understand that if I (we) sign this instruction form without
indicating an aggregate Liquidation Amount of Preferred Securities in the space
above, all Preferred Securities held by you for my (our) account will be
tendered, regardless of the Liquidation Amount listed above, and that I (we)
will be deemed to automatically consent to the Proposed Amendments.
Signature(s):__________________________________________________________________
Name(s) (Please Print):________________________________________________________
Print Address(es):_____________________________________________________________
Area Code and Telephone Number(s):_____________________________________________
Tax Identification or Social Security Number(s):_______________________________
My Account Number With You:____________________________________________________
Date:_____________
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