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WEST PENN POWER 'A+' SR DEBT AFFIRMED BY FITCH, TREND IMPROVING -- FITCH FINANCIAL WIRE --

 NEW YORK, May 17 /PRNewswire/ -- West Penn Power Co.'s `A+' first mortgage bonds, `A' preferred stock, and `F-1' commercial paper are affirmed by Fitch. The credit trend is changed to improving from declining.
 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. The improving trend reflects strengthening bondholder protection measures expected as a result of a recent rate increase.
 The Pennsylvania Commission, which regulates 98 percent of West Penn's revenue, authorized a $61.6 million rate increase based on a 11.5 percent return on equity compared to the company's request for an $86 million rate increase based on a 12.9 percent return on equity. About $26 million of the increase is related to recovery of CAA carrying costs through June 1993. The company expects to file for another rate increase in late 1993 to reflect the portion of CAA related expenses not already in rates.
 Pretax interest coverage excluding AFUDC and including subsidiary Allegheny Generating Co. (AGC) interest was 3.05x at year-end 1992. Internal cash generation of construction expenditures was 40 percent, and debt as a percent of capital totaled 48.8 percent during the same time frame. Internal cash generation should improve, funding about 60 percent of construction expenditures by 1995. This measure is not expected to show further improvement through 1997 due to expenditures associated with the reactivation of West Penn capacity currently in cold reserve. Parent equity support 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. West Penn's share is $311.1 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: West Penn Power Co. ST: Pennsylvania IN: UTI SU: RTG

WB -- NY090 -- 9286 05/17/93 13:59 EDT
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Publication:PR Newswire
Date:May 17, 1993
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