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Allegheny Power Files for Rate Increase in West Virginia
GREENSBURG, Pa.-(Business Wire)-August 29, 2008 - Allegheny Power, the electric delivery subsidiary of Allegheny Energy, Inc. (NYSE: AYE), today submitted a request to the Public Service Commission of West Virginia to recover an additional $173 million (annualized) in fuel and purchased power costs, effective January 1, 2009.
The proposed increase is largely due to the dramatic rise in coal prices, which is the single largest component of Allegheny's cost of producing electricity. Since the company's current rates went into effect in 2007, coal prices have more than tripled, rising 236 percent. Under a cost recovery clause established by the commission last year, customer bills are adjusted annually to reflect upward or downward changes in the cost of fuel and purchased power.
Allegheny's rates in the state have been stable for many years. On January 1, 1998, the average residential 1,000 kilowatt-hour customer bill was about $70. Today it is about $73, which is among the lowest in the nation.
After the proposed rate increase, the monthly bill for a residential customer using 1,000 kilowatt-hours will be approximately $86, an increase of about $13 compared to current rates. This is well below the regional average of $100 and the national average of $104.
The filing today was made jointly by Monongahela Power Company and The Potomac Edison Company, both subsidiaries of Allegheny Energy.
To help customers manage their bills, the company offers a budget plan, special payment plans, and access to energy assistance programs. For home energy efficiency tips, customers can check Allegheny Power's internet site at www.alleghenypower.com or call our Customer Service Center at 1-800-Allegheny (1-800-255-3443) and request a copy of the brochure 100 Ways to Help Control Your Energy Bill.
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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