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MONONGAHELA POWER 'AA-' SR DEBT AFFIRMED BY FITCH, TREND DECLINING -- FITCH FINANCIAL WIRE --

 NEW YORK, May 17 /PRNewswire/ -- Monongahela Power Co.'s `AA-' first mortgage bonds, `AA-' preferred stock, and `F-1+' commercial paper are affirmed. The credit trend is changed to declining from stable.
 The ratings reflect the company's sound credit fundamentals, low cost structure, parent company (Allegheny Power System, Inc.) financial and operating support, and constructive regulatory treatment of Clean Air Act (CAA) capital costs. Rating maintenance assumes rate relief by 1995 adequate to return credit quality measures to levels appropriate for the rating. The declining trend reflects expected weakness in bondholder protection measures over the next 18 months.
 Monongahela Power will file for rate relief in 1993's last quarter or first-quarter 1994. West Virginia regulates 89 percent of revenues. Although the company recovers CAA carrying charges through a surcharge, the last base rate increase was authorized in 1991. Rising maintenance expense related to aging plant, FAS 106 requirements and other items are not reflected in rates. Further, maintenance expense will increase significantly in 1994, when four plants will be taken out of service to make modifications to burners that will lower nitrous oxide emissions in compliance with the CAA.
 As a result, bondholder protection measures are expected to weaken from current levels. Pretax interest coverage excluding AFUDC and including Monongahela's share of subsidiary Allegheny Generating Co. interest was 2.96 times (x) at year-end 1992. Internal generation of construction expenditures was 54.2 percent and total debt as a percent of capitalization was 49.6 percent. Assuming constructive rate relief, pretax coverage recovery to levels more appropriate for the category and internal cash should fund all construction expenditures by 1995. Parent company equity capital should enable the company to maintain its conservative capital structure throughout the construction period.
 Allegheny Power is complying with 1990 CAA Phase 1 requirements by building three scrubbers at its mine-mouth Harrison plant for $726.6 million, including AFUDC. Monongahela's share is $181.9 million. The Harrison scrubbers should be operational by fourth-quarter 1994.
 -0- 5/17/93
 /CONTACT: Josephine Zeppieri, CFA of Fitch, 212-908-0575/
 (AYP)


CO: Monongahela Power Co. ST: West Virginia IN: UTI SU: RTG

WB -- NY085 -- 9275 05/17/93 13:35 EDT
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Date:May 17, 1993
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