Allegheny Power Announces Decision on Environmental Project Financing in West Virginia
GREENSBURG, Pa.--(BUSINESS WIRE)--Allegheny Power, the electric delivery business of Allegheny Energy, Inc. (NYSE: AYE), announced today that the Public Service Commission of West Virginia has approved a settlement agreement that allows the company to issue bonds to fund the remaining portion of its flue gas desulfurization (scrubber) project at the Fort Martin Power Station, near Morgantown, W.Va.
Last month, Allegheny, along with a group of interested parties, submitted a settlement agreement to the Commission resolving issues related to the company’s July 2009 financing application. Consistent with the now-approved settlement:
- Allegheny is authorized to issue an additional $105 million in bonds to finance the remaining portion of the $550 million project, plus related financing costs; and
- Allegheny agreed to withdraw its July 2009 request for an interim rate increase of $82 million for fuel and purchased power costs. The company will pursue recovery of those costs as part of its annual fuel rate case, which was filed on September 1.
“We are committed to environmental stewardship, and the Fort Martin scrubbers are key to that effort,” stated Paul J. Evanson, Chairman, President and Chief Executive Officer of Allegheny Energy. “We appreciate the Commission’s timely approval of this proposal, which should save customers more than $40 million compared to traditional ratemaking.”
Funds collected from Allegheny’s West Virginia customers through a surcharge will be dedicated to the repayment of the ratepayer obligation bonds. Based on current estimates, the additional surcharge would increase the bill of a typical West Virginia residential customer using 1,000 kilowatt-hours of electricity per month by $0.76, or less than one percent.
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 our Web site at www.alleghenyenergy.com.
Forward-Looking Statements
In addition to historical information, this release may contain 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; and regulatory matters. 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 and actions of rating agencies; 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; inflationary and interest rate trends changes in market rules, including changes to PJM participant rules and tariffs; the effect of accounting pronouncements issued periodically by accounting standard-setting bodies and accounting issues facing our organization; 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.
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