Comprehensive Settlement Reached with Majority of Parties to Merger Case in Pennsylvania
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FirstEnergy, Allegheny Energy Address Issues Related to Jobs, Competition and Sustainable Energy
AKRON, Ohio, and GREENSBURG, Pa., Oct. 25 -- FirstEnergy Corp. (NYSE: FE) and Allegheny Energy, Inc. (NYSE: AYE), along with 18 parties to their merger in Pennsylvania, today filed with the Pennsylvania Public Utility Commission (PaPUC) a comprehensive settlement that addresses issues raised in the case. The filing includes additional commitments related to employment levels in Greensburg and Westmoreland County, distribution rate credits for West Penn Power customers, a distribution rate freeze for FirstEnergy's Pennsylvania utility customers, and support for renewable and sustainable energy and customer choice.
"We are pleased to have the support of the majority of parties to our merger case," said Anthony J. Alexander, President and Chief Executive Officer of FirstEnergy. "This settlement builds on the significant commitments we've made to the Commonwealth and provides additional benefits to employees, customers and the competitive marketplace."
"We appreciate the cooperation of all the parties to the settlement," said Paul J. Evanson, Chairman, President and Chief Executive Officer of Allegheny Energy. "This agreement resolves a wide range of issues and should ensure we have a strong presence in our Pennsylvania communities for many years to come."
In addition to the commitments made in the initial merger application, the settlement includes the following:
o A five-year commitment to maintain the following employment levels in
Greensburg and Westmoreland County: at least 800 jobs for the first year
after the merger closes, 675 jobs for the following 12 months, 650 jobs
for the next year and 600 for the following two-year period. These
employment levels may be adjusted to reflect the number of employees who
voluntarily leave the company during these time periods. Also, in the
final two years, employment levels in these areas could be affected by
overall employment changes made at FirstEnergy companies in response to
business conditions. Allegheny staffing levels in Greensburg are
expected to be approximately 845 in early 2011.
o Nearly $11 million in customer credits for West Penn Power residential
customers over a three-year period.
o A distribution rate freeze through October 1, 2012, for customers of
FirstEnergy's current Pennsylvania electric companies - Metropolitan
Edison (Met-Ed), Pennsylvania Electric (Penelec) and Pennsylvania Power.
o Reliability improvements aimed at reducing the number and duration of
outages for West Penn Power customers.
o Additional funding for the West Penn Power Customer Assistance Program.
o A credit for costs related to energy-efficiency and conservation
programs for West Penn Power customers due to recently proposed changes
in implementing its smart meter implementation plan.
o Long-term contracts for the purchase of Solar Photovoltaic Alternative
Energy Credits between 2011 and 2021.
o A commitment of contributions to the West Penn Power Sustainable Energy
Fund.
o Outreach to West Penn Power customers - including the establishment of a
retail choice ombudsman - to promote and encourage customer choice and
shopping.
o Additional customer usage information to competitive generation
suppliers to help support a vibrant competitive marketplace in
Pennsylvania.
o Establishment of a formal process to ensure power quality issues are
addressed for industrial customers of FirstEnergy and Allegheny Energy
in Pennsylvania.
"I am pleased that as a result of our discussions, FirstEnergy has made a five-year commitment to keep good, family-sustaining jobs here in the Greensburg area, especially in this troubled economy," said Pennsylvania State Senator Kim Ward, (R-39th).
Parties signing the petition include the Pennsylvania Public Utility Commission Office of Trial Staff; the Pennsylvania Office of Consumer Advocate; International Brotherhood of Electrical Workers; Utility Workers Union of America (UWUA), AFL-CIO and UWUA System Local No. 102; The Pennsylvania State University; the Met-Ed Industrial Users Group; the Penelec Industrial Customer Alliance; the West Penn Power Industrial Intervenors; Pennsylvania Department of Environmental Protection; Citizens for Pennsylvania's Future (PennFuture); Clean Air Council; the Pennsylvania Rural Electric Association; Constellation New Energy, Inc.; Constellation Energy Commodities Group; the Pennsylvania Mountains Healthcare Alliance; the West Penn Power Sustainable Energy Fund; the York County Solid Waste and Refuse Authority; and ARIPPA. The petition, which resolves all issues raised by these parties in the FirstEnergy-Allegheny Energy merger case, is subject to approval of the Pennsylvania Public Utility Commission.
The companies filed their application with the PaPUC on May 14, 2010. In it they committed to operate a regional headquarters for West Penn Power at the current Allegheny Energy headquarters building in Greensburg, Pennsylvania; no net job losses at the utility operating companies for at least two years as a result of involuntary attrition related to the integration process; to establish a new Power Systems Institute program in Pennsylvania; and continued economic development and community support.
SOURCE FirstEnergy Corp.
CONTACT: FirstEnergy: For Investors: Ronald Seeholzer, +1-330-384-5415, For Media:
Ellen Raines, +1-330-384-5808; Allegheny: For Investors: Max Kuniansky, +1-724-838-6895, For Media: David Neurohr, +1-724-838-6020
Web Site: www.firstenergycorp.com
