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WEST PENN POWER'S FIRST MORTGAGE BONDS RATED 'A+' BY FITCH -- FITCH FINANCIAL WIRE --

 WEST PENN POWER'S FIRST MORTGAGE BONDS RATED 'A+' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Aug. 6 /PRNewswire/ -- West Penn Power Co.'s $45 million 7.3/8 percent first mortgage bonds, due Aug. 1, 2007, are rated 'A+.' The issue is a takedown from a previously rated shelf registration. 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 non-committal 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., indicated it may provide less equity support. Although the company will continue to benefit from its access to substantial resources from the integrated Allegheny System, reduced parent equity support and increased capital requirements are expected to result in weakened financial protection measures for West Penn.
 The PUC determined that West Penn's acid rain compliance plan was prudent based on currently available information, but conditioned its ruling on the availability of new information on bonus and extension allowances and the market for low sulfur coal. The Environmental Protection Agency has not issued regulations concerning bonus and extension allowances. Allegheny 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 (AFUDC). West Penn's share is $311.1 million.
 West Penn's financial protection measures improved in 1991 and through 1992's first quarter, 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. Pretax interest coverage, excluding AFUDC and including West Penn's pro rata share of Allegheny Generating Co.'s (AGC) interest expense improved to 3.38 times (x) for the 12 months ended March 31, 1992 from 3.02x in 1990. Internal generation of construction expenditures, 58 percent for the 12-month period, is expected to provide less than 50 percent of construction expenditures until 1995. Total debt as a percent of capitalization (47.2 percent) is anticipated to rise to approximately 48 percent over the next five years.
 -0- 8/6/92
 /CONTACT: Josephine Zeppieri of Fitch, 212-908-0575/
 (AYP) CO: West Penn Power Co.; Allegheny Power System Inc. ST: Pennsylvania IN: UTI SU: RTG


CK -- NY071 -- 7638 08/06/92 13:18 EDT
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Date:Aug 6, 1992
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