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ALLEGHENY GENERATING CO. $50 MILLION 5.75 PERCENT NOTES RATED 'A+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, March 8 /PRNewswire/ -- Allegheny Generating Co.'s $50 million 5.75 percent medium-term notes due 1998 are rated 'A+' by Fitch.
 The ratings reflect a power agreement with AGC's parent companies and the strong operating and financial profile of the Allegheny Power System, a holding company whose revenues and earnings are derived from three operating subsidiaries: Monongahela Power Co., (27 percent), Potomac Edison Co. (28 percent), and West Penn Power Co. (45 percent). The Allegheny Generating Co. is owned by these operating subsidiaries. The company's only asset is its 40 percent ownership interest (840 mw) in the Bath County pumped storage hydroelectric plant.
 AGC is regulated by the Federal Energy Regulatory Commission (FERC), which sets "cost of service" wholesale rates so AGC can recover operating, maintenance, and capital costs from its parent companies. The current return on equity is 11.53 percent. A rate case is pending before FERC. The administrative law judge recommended a 11.15 percent return on equity but a final decision is not expected before summer. A power agreement requires AGC's parent companies to purchase their share of Bath County generating capacity whether or not it is available.
 The Allegheny Power System has significant capital and operating expenses associated with 1990 Clean Air Act compliance. APS plans to comply with Clean Air Act phase 1 requirements by building scrubbers at its mine-mouth Harrison plant for $726.6 million, including allowance for funds used during construction. The Harrison plant is owned by Monongahela Power (25 percent), Potomac Edison (33 percent), and West Penn Power (42 percent).
 -0- 03/08/93
 /CONTACT: Josephine Zeppieri of Fitch, 212-908-0575/


CO: Allegheny Generating Co.; Allegheny Power System ST: New York IN: UTI SU: RTG

AH -- NY054 -- 4000 03/08/93 12:14 EST
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Publication:PR Newswire
Date:Mar 8, 1993
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