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Business and Finance
Thu, November 4, 2010 FirstEnergy and Allegheny Energy Reach Settlement with Parties in Merger Case in West Virginia
AKRON, Ohio & GREENSBURG, Pa.--([ BUSINESS WIRE ])--FirstEnergy Corp. (NYSE: FE) and Allegheny Energy, Inc. (NYSE: AYE), along with all parties to their merger proceeding in West Virginia, today filed a comprehensive settlement with the West Virginia Public Service Commission (WVPSC) that resolves all issues raised in the case. The filing includes a commitment for a regional headquarters for Allegheny Powera™s West Virginia utility operations, a $7.5 million rate reduction over two years for Allegheny Powera™s West Virginia customers, enhanced customer service and reliability, and expanded support for Dollar Energy Fund.
"This agreement strengthens our commitments to the state and will ensure a strong partnership with West Virginia for years to come."
aWe are pleased to have reached agreement with the parties to our merger case in West Virginia and look forward to providing additional benefits to customers and communities in West Virginia,a said Anthony J. Alexander, President and Chief Executive Officer of FirstEnergy.
aWe appreciate the support of all the parties to the settlement,a said Paul J. Evanson, Chairman, President and Chief Executive Officer of Allegheny Energy. aThis agreement strengthens our commitments to the state and will ensure a strong partnership with West Virginia for years to come.a
In addition to the commitments made in the initial merger application, the settlement includes the following:
- A regional headquarters operation for Allegheny Powera™s West Virginia utility operations within the service territory of Monongahela Power.
- $7.5 million in rate reductions over a two-year period for Allegheny Powera™s West Virginia customers.
- Customer service as well as reliability commitments aimed at reducing the duration of outages.
- A commitment to maintain customer call center operations in Fairmont for at least five years.
- Additional funding totaling $500,000 over a four-year period for Dollar Energy Fund in West Virginia.
- Specific demand-side management and energy efficiency savings levels in Allegheny Powera™s West Virginia service territories.
Parties signing the petition include Staff of the WVPSC, the West Virginia Consumer Advocate Division, West Virginia Energy Users Group, the Utility Workers of America, AFL-CIO and UWUA System Local 102-O, West Virginia Citizen Action Group, Local Union 2357 and Local Union 50 of the International Brotherhood of Electrical Workers, the West Virginia State Building and Construction Trades Council, and the Marion County Commission.
The petition, which resolves all issues raised by these parties in the FirstEnergy-Allegheny Energy merger case, is subject to approval of the WVPSC.
The companies filed their merger application with the WVPSC on May 18, 2010. In it they committed to no net job losses at the utility operating companies for at least two years as a result of involuntary attrition related to the integration process; to expand FirstEnergya™s Power Systems Institute program in West Virginia; to maintain Allegheny Powera™s customer call center and transmission operations center in Fairmont; and continued economic development and community support.
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
In addition to historical information, this news release may contain a number of aforward-looking statementsa 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. Forward-looking statements relating to the proposed merger include, but are not limited to: statements about the benefits of the proposed merger involving FirstEnergy and Allegheny Energy, including future financial and operating results; FirstEnergya™s and Allegheny Energya™s plans, objectives, expectations and intentions; the expected timing of completion of the transaction; and other statements relating to the merger that are not historical facts. 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. Important factors could cause actual results to differ materially from those indicated by such forward-looking statements. With respect to the proposed merger, these factors include, but are not limited to: the risk that FirstEnergy or Allegheny Energy may be unable to obtain governmental and regulatory approvals required for the merger, or required governmental and regulatory approvals may delay the merger or result in the imposition of conditions that could reduce the anticipated benefits from the merger or cause the parties to abandon the merger; the risk that a condition to closing of the merger may not be satisfied; the length of time necessary to consummate the proposed merger; the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; the diversion of management time on merger-related issues; the effect of future regulatory or legislative actions on the companies; and the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect. These risks, as well as other risks associated with the merger, are more fully discussed in the joint proxy statement/prospectus that is included in the Registration Statement on Form S-4 (Registration No. 333-165640) that was filed by FirstEnergy with the SEC in connection with the merger. Additional risks and uncertainties are identified and discussed in FirstEnergya™s and Allegheny Energya™s reports filed with the SEC and available at the SECa™s website at [ www.sec.gov ]. Forward-looking statements included in this document speak only as of the date of this document. Neither FirstEnergy nor Allegheny Energy undertakes any obligation to update its forward-looking statements to reflect events or circumstances after the date of this document.
