Allegheny Energy's Transmission Expansion Plan Receives PJM Approval.

GREENSBURG, Pa. -- Allegheny Energy, Inc. (NYSE:AYE) today announced that PJM Interconnection has approved a major expansion of the company's 500-kilovolt (kV) electric transmission system.

The PJM board has approved a five-year program designed to maintain the reliability of the transmission grid in the Mid-Atlantic region. The plan, which was proposed in a regional planning study released by PJM in May, includes construction of approximately 210 miles of 500-kV transmission lines within Allegheny's service territory.

Specifically, the plan calls for construction of a new 500-kV line extending from southwestern Pennsylvania to West Virginia to northern Virginia. The project has a targeted completion date of 2011. Preliminary cost estimates for Allegheny's portion of the project and other upgrades are in excess of $850 million.

Allegheny will now begin line siting and permitting. In addition, Allegheny will seek regulatory approvals from the utility commissions in states the line crosses. Also, Allegheny has requested incentive rate treatments from the Federal Energy Regulatory Commission, and requested that the U.S. Department of Energy designate the project as a National Interest Electric Transmission Corridor.

Allegheny Energy

Headquartered in Greensburg, Pa., Allegheny Energy is an investor-owned utility consisting of two major businesses. Allegheny Energy Supply owns and operates electric generating facilities, and Allegheny Power delivers low-cost, reliable electric service to 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 contains 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; regulatory matters; and accounting issues. 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; 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; changes in PJM, including changes to participant rules and tariffs; the effect of accounting policies issued periodically by accounting standard-setting bodies; 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.