Allegheny Energy, Inc. Chairman Outlines Growth Strategy at Annual Meeting of Shareholders.

Business Editors

NEW YORK--(BUSINESS WIRE)--May 11, 2000

Alan J. Noia, Chairman, President, and Chief Executive Officer of Allegheny Energy, Inc. (NYSE: AYE), today said that the Company produced record operating earnings in 1999 and positioned itself to seize significant opportunities in the new, competitive energy market.

Allegheny Energy successfully met its goals in 1999 and is building on those successes, Noia told shareholders at the Company's Annual Meeting. Highlights of 1999 included:

- Growing net income by 7 percent to $307 million and earnings

per share, on an operating basis, by 13 percent to $2.64;

- Reducing production costs by almost 5 percent, making the

Company's already low-cost generating fleet even more

competitive;

- Capitalizing on the restructuring settlement achieved in

Pennsylvania in 1998 to form Allegheny Energy Supply Company

and transferring to it substantial generating assets;

- Expanding the Company's unregulated subsidiary, Allegheny

Ventures, and hiring a new President to lead growth in that

area;

- Adding 50,000 new customers and a natural gas operation to its

regulated energy delivery business, Allegheny Power, and

announcing plans to add 200,000 new natural gas customers

through its pending acquisition of Mountaineer Gas; and

- Repurchasing 12 million shares of Allegheny Energy, Inc.

common stock.

"Our three businesses -- Allegheny Power, Allegheny Energy Supply, and Allegheny Ventures -- have clear strategies that blend and leverage off each other," Noia said. "We have unmatched industry expertise; high-quality, low-cost assets; a powerful brand and the best customer relations; a proven track record of superior industry performance; and the management team, employees, and I are focused on our customers and on increasing shareholder value."

Noia added that the Company's energy supply business expanded its unregulated generation portfolio and its customer base in 1999, paving the way for further expansion this year.

"Our strength in generation comes from our advantages: our assets, location, scale, and skills," he explained. "Our brand and reputation for customer service has benefited us in retaining customers and allows us to enter new markets more easily."

Allegheny Energy Supply will expand by adding generation owned by the Company's regulated affiliates as states deregulate; constructing or acquiring additional generating units; maximizing the market advantages of its low-cost generating assets; and marketing electricity to wholesale and retail customers within and beyond Allegheny's traditional service areas.

Allegheny Power, the Company's energy delivery business, will grow by expanding into areas that are close to its franchised service territory and by improving operational excellence through effectively managing costs and increasing efficiency.

Through two acquisitions, one which is expected to close this summer, Allegheny Power will increase its utility customer base by 15 percent, furthering its entrance into natural gas markets and providing an opportunity for cross-selling of electricity and natural gas.

"Allegheny Power has a great reputation built on decades of operational excellence and superior customer service," said Noia. "These positive customer relationships spill over into our other businesses and are a key asset as our industry continues to change."

Allegheny Energy is also seizing opportunities through its non-regulated business, Allegheny Ventures.

"Through this growing new company, we are unlocking the value of many investments already in place and are actively seeking new ones," Noia explained. "Ventures is focused on extracting value from fiber optic lines that we build and own, distributed generation opportunities, and underused real estate holdings."

Noia outlined a number of significant activities that Allegheny Ventures has undertaken in 2000, including joining with five other companies to create America's Fiber Network, a high-speed fiber optics company with a network of 7,000 route miles; partnering with BroadbandNOW to offer high-speed internet access and multimedia content to retail consumers; investing in Genosys Technology Management to provide value-added services to customers on its fiber optic network; and teaming up with others, including Capstone Turbine Corporation, to offer products to meet customers' distributed generation needs.

"This is an exciting time for Allegheny Energy," said Noia. "We have and are playing a significant role in moving this industry from regulation to competition. The transition, however, has taken longer than we expected. It has been a marathon, not a sprint. But, there are significant opportunities in the new energy environment, and we are positioned to take advantage of them."

Allegheny Energy, Inc. is a diversified energy company headquartered in Hagerstown, Md. The Allegheny Energy family includes Allegheny Energy Supply Company, LLC, which operates and markets competitive retail and wholesale electric generation and operates regulated electric generation for its affiliates; Allegheny Power, which delivers electric energy and natural gas to about three million people in parts of Maryland, Ohio, Pennsylvania, Virginia, and West Virginia; and Allegheny Ventures, which actively invests in and develops telecommunications and energy-related projects. For more information, visit our web site at www.alleghenyenergy.com.

Certain statements above constitute forward-looking statements with respect to Allegheny Energy, Inc. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of Allegheny Energy to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors may affect Allegheny Energy's operations, markets, products, services, and prices. Such factors include, among others, the following: general and economic and business conditions; industry capacity; changes in technology; changes in political, social, and economic conditions; regulatory matters; litigation involving Allegheny Energy; integration of the operations of Allegheny Energy; regulatory conditions applicable to Allegheny Energy; the loss of any significant customers; and changes in business strategy or business plans.