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WEST PENN $40 MILLION PREFERRED STOCK RATED 'A' BY FITCH -- FITCH FINANCIAL WIRE --

 WEST PENN $40 MILLION PREFERRED STOCK RATED 'A' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Nov. 10 /PRNewswire/ -- West Penn Power Co.'s new $40 million issue of market auction preferred stock is rated 'A' by Fitch. The issue is a takedown from an $80 million market auction preferred stock shelf registration, which is also rated 'A'. The credit trend is declining.
 The rating reflects significant acid rain expenditures and uncertain regulatory treatment by the Pennsylvania Public Utility Commission (PUC).
 The PUC, which regulates 98 percent of West Penn's revenues, issued a noncommittal prudency decision on the company's acid rain compliance plan and denied the company's request to recover actual acid rain- related costs through a surcharge. As a result, West Penn's parent, Allegheny Power System, Inc. (APS) indicated it may provide less equity support.
 The PUC determined that West Penn's acid rain compliance plan was prudent based on currently available information, but conditioned their ruling on the availability of new information on bonus and extension allowances and the market for low sulfur coal. APS plans to comply with 1990 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. West Penn's share is $311.1 million.
 West Penn's affiliation with the APS provides it with operating and financial support that would be unavailable to it as a stand-alone entity. However, reduced parent equity support and increased capital requirements are expected to result in weakened measures of financial protection for West Penn.
 West Penn's financial protection measures improved in 1991 and through the second quarter of 1992 largely due to a 1990 base rate increase. Prospectively, higher operating and interest expense associated with the scrubber project is likely to reverse the improvement. Preferred dividend coverage excluding AFUDC and including Allegheny Generating Company (AGC) interest expense was 2.88x for the 12 months ended June 30, 1992. Pretax coverage of interest excluding AFUDC and including AGC interest was 3.38x. Internal generation of construction expenditures, 50.5 percent for the 12 months ended June 1992, is expected to provide less than 50 percent of construction expenditures until 1995. Preferred stock and total debt respectively comprised 6.3 percent and 47.3 percent of capitalization as of June 30, 1992.
 -0- 11/10/92
 /CONTACT: Josephine Zeppieri of Fitch, 212-908-0575/ CO: West Penn Power Co. ST: Pennsylvania IN: UTI SU: RTG


SM -- NY101 -- 9464 11/10/92 17:02 EST
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Date:Nov 10, 1992
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