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Allegheny Energy Subsidiary Completes Competitive Bid Auction for Virginia Power Supply

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  Published in Business and Finance on Tuesday, December 23rd 2008 at 10:51 GMT, Last Modified on 2008-12-23 10:52:14 by Market Wire
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GREENSBURG, Pa.--([ BUSINESS WIRE ])--Allegheny Energy, Inc. (NYSE: AYE) announced today that its Potomac Edison subsidiary has successfully completed a competitive-bid auction for power needed to supply its Virginia customers. Due to the recent decline in the market price of power, upcoming changes in customer bills will be substantially less than previously expected.

Potomac Edison requested bids to provide generation service for June 1, 2009, through June 30, 2011. The contracts awarded via the competitive bidding process mature at varying times during this 25-month period.

"Our new contracts provide Virginia customers with reliable power at favorable, predictable prices for the next several years," said Paul J. Evanson, Chairman, President and Chief Executive Officer of Allegheny Energy. "We commend the Virginia Commission and the parties to our recent settlement agreement for their thoughtful approach to protecting customers from dramatic rate increases."

As a result of the auction, the monthly bill for a Potomac Edison residential customer using 1,000 kilowatt-hours will increase by approximately 5.8 percent, or $5.20, on July 1, 2009. On July 1, 2010, customer rates will increase a modest 0.2 percent, or $0.22, based on auction results.

Potomac Edison awarded 13 supply contracts for approximately 6.9 million megawatt-hours of generation service for the 25-month period. An independent firm, Levitan & Associates, Inc., monitored the auction process. Results were presented to the Staff of the Virginia State Corporation Commission and the Office of the Attorney General, Division of Consumer Counsel, for review and acknowledgement that Potomac Edison complied with the approved procurement process.

Potomac Edison provides approximately 100,000 customers in northern Virginia with about 3 million megawatt-hours of power per year.

Allegheny Energy

Headquartered in Greensburg, Pa., Allegheny Energy is an investor-owned electric utility with total annual revenues of over $3 billion and more than 4,000 employees. The company owns and operates generating facilities and delivers low-cost, reliable electric service to 1.6 million customers in Pennsylvania, West Virginia, Maryland and Virginia. For more information, visit the company's Web site at [ www.alleghenyenergy.com ].

Forward-Looking Statements

In addition to historical information, this release contains a number of "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Words such as anticipate, expect, project, intend, plan, believe, and words and terms of similar substance used in connection with any discussion of future plans, actions, or events identify forward-looking statements. These include statements with respect to: rate regulation and the status of retail generation service supply competition in states served by Allegheny Energy's distribution business, Allegheny Power; financing plans; demand for energy and the cost and availability of raw materials, including coal; provider-of-last-resort and power supply contracts; results of litigation; results of operations; internal controls and procedures; capital expenditures; status and condition of plants and equipment; capacity purchase commitments; regulatory matters; and accounting issues. Forward-looking statements involve estimates, expectations and projections and, as a result, are subject to risks and uncertainties. There can be no assurance that actual results will not materially differ from expectations. Actual results have varied materially and unpredictably from past expectations. Factors that could cause actual results to differ materially include, among others, the following: plant performance and unplanned outages; changes in the price of power and fuel for electric generation; general economic and business conditions; changes in access to capital markets; complications or other factors that render it difficult or impossible to obtain necessary lender consents or regulatory authorizations on a timely basis; environmental regulations; the results of regulatory proceedings, including proceedings related to rates; changes in industry capacity, development and other activities by Allegheny Energy's competitors; changes in the weather and other natural phenomena; changes in customer switching behavior and their resulting effects on existing and future load requirements; changes in the underlying inputs and assumptions, including market conditions used to estimate the fair values of commodity contracts; changes in laws and regulations applicable to Allegheny Energy, its markets or its activities; the loss of any significant customers or suppliers; dependence on other electric transmission and gas transportation systems and their constraints or availability; changes in PJM, including changes to participant rules and tariffs; the effect of accounting policies issued periodically by accounting standard-setting bodies; and the continuing effects of global instability, terrorism and war. Additional risks and uncertainties are identified and discussed in Allegheny Energy's reports filed with the Securities and Exchange Commission.