Business & Finance
Business and Finance
Business and Finance
Thu, December 2, 2010 Comprehensive Settlement with Majority of Parties to Merger Case in Maryland Includes Enhanced Customer Benefits
AKRON, Ohio & GREENSBURG, Pa.--([ BUSINESS WIRE ])--FirstEnergy Corp. (NYSE: FE) and Allegheny Energy, Inc. (NYSE: AYE), along with ten parties to their merger proceeding in Maryland, today filed with the Maryland Public Service Commission a comprehensive settlement that addresses issues raised in the case. The settlement enhances commitments made in the initial merger application and includes customer credits of $6.5 million a" a $4 million increase over the initial filing a" to be provided over four years to Potomac Edisona™s residential electric distribution customers. It also maintains the companiesa™ commitment to locate a regional headquarters in Potomac Edisona™s Maryland service territory, and includes reliability enhancements and support for the development of new renewable energy resources in the state.
"We are pleased to have a settlement that builds on the customer and community commitments wea™ve already made in the state."
aWe appreciate the support of the parties to our Maryland merger case in reaching this agreement,a said Anthony J. Alexander, President and Chief Executive Officer of FirstEnergy. aWe are pleased to have a settlement that builds on the customer and community commitments wea™ve already made in the state.a
aThanks to the cooperation of all the parties to the settlement, we have reached an agreement that strengthens our commitments in Maryland, while helping to ensure a strong partnership with the state after the merger is complete,a said Paul J. Evanson, Chairman, President and Chief Executive Officer of Allegheny Energy.
The settlement enhances the significant commitments made in the initial merger application and includes:
- Customer credits of $6.5 million for Potomac Edisona™s Maryland residential electric utility distribution consumers over a four-year period, in addition to the savings consumers will realize in the ratemaking process
- A $600,000 contribution of corporate funds for the Electric Universal Service Program
- A reduction of $750,000 in costs to customers for EmPower Maryland Programs, and a designated employee accountable for Potomac Edisona™s participation in the program
- Assistance in the development of renewable energy projects with an average annual output of 13,000 megawatt-hours, or the megawatt equivalent, in Maryland
- Reliability commitments aimed at reducing the duration of outages
Parties signing the settlement include the State of Maryland; the Maryland Energy Administration; Maryland Department of the Environment; Maryland Industrial Customers; the Utility Workers Union of America, AFL-CIO; UWUA System Local No. 102; the Board of County Commissioners of Washington County, Maryland; the City of Hagerstown; the Town of Thurmont; and the Town of Williamsport. The settlement, which resolves all issues raised by these parties in the FirstEnergy-Allegheny Energy merger case, is subject to approval of the Maryland Public Service Commission.
The companies filed their application with the Maryland Public Service Commission on May 27, 2010. In it they committed to operate a regional headquarters for Potomac Edison; no net job losses at the Potomac Edisona™s Maryland utility operations for at least two years as a result of involuntary attrition related to the integration process; a monthly credit for residential customers totaling $2.5 million over two years; support for competitive markets; a continuation of collective bargaining agreements; commitments to customer reliability; 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.
