Allegheny Energy Announces Agreement -- Maryland Customers To Save Millions in Future Energy Costs.HAGERSTOWN, Md.--(BUSINESS WIRE)--July 30, 1998--Allegheny Energy, Inc. (NYSE NYSE See: New York Stock Exchange : AYE) announced today that its Maryland subsidiary, now doing business as Allegheny Power, has reached a settlement agreement with interested parties that will save the Company's Maryland customers millions of dollars on their future energy bills. The agreement has been filed with the Maryland Public Service Commission (PSC (Public Service Commission) Same as PUC. ) and is subject to Commission approval. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Michael P. Morrell, Allegheny Energy Allegheny Energy (NYSE: AYE) is a traditional public utility based in the Pittsburgh suburb of Greensburg. It services communities in Western Pennsylvania, Western Maryland, Northern West Virginia, Northwest Virginia. Senior Vice President and Chief Financial Officer, these savings for customers result from the Company's restructuring and other efficiencies achieved by its subsidiaries. These cost-saving efforts will also partially offset the significant rate increase caused by purchasing power Purchasing Power 1. The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you'd be able to purchase. 2. from the AES/Warrior Run co-generation plant. "Without the settlement announced this week, Allegheny Power's Maryland customers would have seen a rate increase of more than 15 percent in their electric bills when AES/Warrior Run begins generating power in October 1999," said Morrell. "As a result of the Company's aggressive efforts to control all costs, customers will see only a 3 percent increase in their bills in each of 3 years from 1999 to 2001." Allegheny Power is required to purchase power from the AES/Warrior Run plant under the federal Public Utility Regulatory Policies Act The Public Utility Regulatory Policies Act (or PURPA) was a law passed in 1978 by the United States Congress as part of the National Energy Act. It was meant to promote greater use of renewable energy. . The Company has been active in attempting to mitigate costs associated with this project for many years. "Without the settlement agreement, the rate increase needed to recover the annual costs of the power purchases from the Cumberland-based AES/Warrior Run plant is still about $60 million annually, which represents about a 15 percent increase for customers," according to Morrell. "However, we have actively pursued measures of cost reductions in other areas of our operations to help soften the blow to our customers. "In addition," added Morrell, "the parties have agreed to spread the costs of this purchased power over a 3-year period. Instead of one large rate increase, customers will see three smaller increases of about 3 percent in 1999, 2000, and 2001, which will significantly lessen less·en v. less·ened, less·en·ing, less·ens v.tr. 1. To make less; reduce. 2. Archaic To make little of; belittle. v.intr. To become less; decrease. the effect on bills for the more than 383,000 customers we serve in Maryland. "While we regret the need to increase rates over the next three years, we are pleased with the cooperative efforts of all interested parties to minimize the required increases," Morrell said. "The PSC Staff, the Office of People's Counsel, and the other parties involved have worked with us to reach this agreement." Parties to the settlement include the Staff of the Maryland Public Service Commission, the Office of People's Counsel, the Maryland Energy Administration, and Westvaco. Headquartered near Hagerstown, Md., Allegheny Energy, with operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. doing business as Allegheny Power, provides electric service to 1.4 million customers in parts of Maryland, Ohio, Pennsylvania, Virginia, and West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. .
CONTACT: Debra A. Beck
Communications Specialist
301/790-6177
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