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ALLEGHENY LUDLUM: ALL WEST PENN POWER RATEPAYERS MAY BENEFIT FROM SPECIALTY STEELMAKERS' COURT ACTION

 PITTSBURGH, March 23 /PRNewswire/ -- Specialty steelmakers Allegheny Ludlum Corporation (NYSE: ALS), Pittsburgh, and Armco Advanced Materials Company (Armco/AMC), Butler, Pa., received a favorable ruling on March 10, in a Commonwealth Court case that could benefit all West Penn Power ratepayers by preventing unnecessary overcharges of nearly $29 million per year, it was announced today.
 In the case, Allegheny Ludlum and Armco opposed an attempt by the Pennsylvania Public Utility Commission (PUC) to force West Penn Power Company to purchase excess generating capacity from the proposed, privately owned Shannopin cogeneration plant in Greene County, Pa. West Penn also opposed the PUC's position, saying that it does not need additional capacity until well into the next century.
 The PUC previously authorized a significant rate increase to West Penn customers for the Shannopin plant amounting to approximately $35 million per year for the next 30 years, or in excess of $1 billion in total.
 Allegheny Ludlum and Armco argued in court that the project would force the sale of unneeded excess capacity and, therefore, the rate increase approved by the PUC was unwarranted.
 The court agreed with the specialty steelmakers, noting that the PUC-approved rate was nearly $29 million more per year than West Penn calculated was necessary to charge ratepayers. Over the 30-year life of the contract, the overcharge would be $864 million.
 West Penn Power cannot currently sell all of its electricity because of large power plant construction programs in the 1980s and the loss of substantial industrial demand in Western Pennsylvania.
 In fact, West Penn had to increase rates just several weeks ago through its fuel adjustment clause by about $30 million per year primarily because of its inability to sell existing surplus capacity. Forcing West Penn to purchase even more power that it doesn't need from the Shannopin facility will aggravate the situation at the expense of the ratepayers, the specialty steelmakers said.
 Allegheny Ludlum and Armco noted that construction of the Shannopin power plant would create only 40-50 permanent jobs in Greene County. But, the rate increase would add millions of dollars per year to each of the specialty steelmakers' costs, negatively impacting employment at their Western Pennsylvania operations, along with adding unnecessary costs to other commercial and residential customers in the West Penn service area.
 Allegheny Ludlum employs about 4,200 in Brackenridge, Leechburg, Vandergrift and at its technical center in Natrona Heights, while Armco employs about 2,800 in Butler.
 The principal investors in the proposed Shannopin power plant are Consumers Power Company, a public utility holding company based in Michigan; the Sagamore Corporation, a privately held venture capital company located in New Canaan, Conn.; American Adventures, Inc., of Greenwich, Conn.; and the Nally Corporation, a Liberian corporation. All profit from the sale of power generated by the Shannopin plant would flow to the developers.
 In its decision, the court sent the case back to the PUC ordering the PUC to reexamine the cost of the Shannopin contract to consumers and to review whether it will cause consumers to pay for excess capacity.
 Allegheny Ludlum Corporation and Armco/AMC, a business unit of Armco, Inc. (NYSE: AS) are both major domestic producers of stainless and electrical steel and are the largest customers of West Penn Power Company.
 /delval/
 -0- 3/23/93
 /CONTACT: Bert Delano of Allegheny Ludlum, 412-394-2813/
 (ALS AS)


CO: Allegheny Ludlum Corporation; Armco Advanced Materials Company;
 West Penn Power Company ST: Pennsylvania IN: UTI MNG SU:


CD-KC -- PG002 -- 8607 03/23/93 10:53 EST
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Publication:PR Newswire
Date:Mar 23, 1993
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