FirstEnergy Corp., along with all parties to their merger proceeding in West Virginia, today filed a comprehensive settlement with the West Virginia Public Service Commission (WVPSC) that resolves all issues raised in the case.  The filing includes a commitment for a regional headquarters for Allegheny Power’s West Virginia utility operations, a $7.5 million rate reduction over two years for Allegheny Power’s West Virginia customers, enhanced customer service and reliability, and expanded support for Dollar Energy Fund.

“We are pleased to have reached agreement with the parties to our merger case in West Virginia and look forward to providing additional benefits to customers and communities in West Virginia,” said Anthony J. Alexander, President and Chief Executive Officer of FirstEnergy.

“We appreciate the support of all the parties to the settlement,” said Paul J. Evanson, Chairman, President and Chief Executive Officer of Allegheny Energy. “This agreement strengthens our commitments to the state and will ensure a strong partnership with West Virginia for years to come.”

In addition to the commitments made in the initial merger application, the settlement includes the following:

• A regional headquarters operation for Allegheny Power’s West Virginia utility operations within the service territory of Monongahela Power.
• $7.5 million in rate reductions over a two-year period for Allegheny Power’s West Virginia customers.
• Customer service as well as reliability commitments aimed at reducing the duration of outages.
• A commitment to maintain customer call center operations in Fairmont for at least five years.
• Additional funding totaling $500,000 over a four-year period for Dollar Energy Fund in West Virginia.
• Specific demand-side management and energy efficiency savings levels in Allegheny Power’s West Virginia service territories.

Parties signing the petition include Staff of the WVPSC, the West Virginia Consumer Advocate Division, West Virginia Energy Users Group, the Utility Workers of America, AFL-CIO and UWUA System Local 102-O, West Virginia Citizen Action Group, Local Union 2357 and Local Union 50 of the International Brotherhood of Electrical Workers, the West Virginia State Building and Construction Trades Council, and the Marion County Commission.

The petition, which resolves all issues raised by these parties in the FirstEnergy-Allegheny Energy merger case, is subject to approval of the WVPSC.

The companies filed their merger application with the WVPSC on May 18, 2010.  In it they committed to 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 expand FirstEnergy’s Power Systems Institute program in West Virginia; to maintain Allegheny Power’s customer call center and transmission operations center in Fairmont; and continued economic development and community support.

FirstEnergy Corp. (NYSE: FE) and Allegheny Energy, Inc. (NYSE: AYE), along with all parties to their merger proceeding in West Virginia, today filed a comprehensive settlement with the West Virginia Public Service Commission (WVPSC) that resolves all issues raised in the case.  The filing includes a commitment for a regional headquarters for Allegheny Power’s West Virginia utility operations, a $7.5 million rate reduction over two years for Allegheny Power’s West Virginia customers, enhanced customer service and reliability, and expanded support for Dollar Energy Fund.

“We are pleased to have reached agreement with the parties to our merger case in West Virginia and look forward to providing additional benefits to customers and communities in West Virginia,” said Anthony J. Alexander, President and Chief Executive Officer of FirstEnergy.

“We appreciate the support of all the parties to the settlement,” said Paul J. Evanson, Chairman, President and Chief Executive Officer of Allegheny Energy. “This agreement strengthens our commitments to the state and will ensure a strong partnership with West Virginia for years to come.”

In addition to the commitments made in the initial merger application, the settlement includes the following:

• A regional headquarters operation for Allegheny Power’s West Virginia utility operations within the service territory of Monongahela Power.
• $7.5 million in rate reductions over a two-year period for Allegheny Power’s West Virginia customers.
• Customer service as well as reliability commitments aimed at reducing the duration of outages.
• A commitment to maintain customer call center operations in Fairmont for at least five years.
• Additional funding totaling $500,000 over a four-year period for Dollar Energy Fund in West Virginia.
• Specific demand-side management and energy efficiency savings levels in Allegheny Power’s West Virginia service territories.

Parties signing the petition include Staff of the WVPSC, the West Virginia Consumer Advocate Division, West Virginia Energy Users Group, the Utility Workers of America, AFL-CIO and UWUA System Local 102-O, West Virginia Citizen Action Group, Local Union 2357 and Local Union 50 of the International Brotherhood of Electrical Workers, the West Virginia State Building and Construction Trades Council, and the Marion County Commission.

The petition, which resolves all issues raised by these parties in the FirstEnergy-Allegheny Energy merger case, is subject to approval of the WVPSC.

The companies filed their merger application with the WVPSC on May 18, 2010.  In it they committed to 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 expand FirstEnergy’s Power Systems Institute program in West Virginia; to maintain Allegheny Power’s customer call center and transmission operations center in Fairmont; and continued economic development and community support.

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Pennsylvania Governor Ed Rendell blistered the proposed merger between FirstEnergy and Allegheny Energy, saying it would benefit Ohio and screw Pennsylvania due to the 980 jobs that would be lost as a result.

He said in a release today: “”This merger would be a great deal for Wall Street and Ohio, but terrible for Pennsylvania’s workers and consumers,” said Governor Rendell. “Wall Street’s investors would benefit to the tune of $2 billion, but Pennsylvania could lose nearly 1,000 jobs and our consumers would have fewer choices because there’d be less competition to keep electricity prices low.”

FirstEnergy Corp. and Allegheny Energy today issued the following statement in response to Pennsylvania Governor Ed Rendell’s opposition to the companies’ proposed merger:

“We respectfully disagree with Governor Rendell’s position on our proposed merger.

The merger will create a stronger company, better positioned to deliver significant immediate and long-term benefits to the Commonwealth of Pennsylvania, including operating efficiencies that would result in better service reliability and prices for customers.

It is noteworthy that several groups concerned with jobs and economic growth in Pennsylvania have publicly supported the merger, including the International Brotherhood of Electrical Workers (IBEW), the Utility Workers Union of America (UWUA) and economic development and chambers of commerce groups, such as the Butler, Pa. County Economic Development Corp., Greater Johnstown-Cambria County Chamber of Commerce and the PA Economic Development Association.

The stronger company created by this merger provides the best opportunity for employment and economic growth in Pennsylvania. FirstEnergy has made certain commitments related to the utility workforce in Pennsylvania. The company also has delayed hiring in order to accommodate Allegheny Energy employees, and will look for ways to provide additional career opportunities.

In its merger application, FirstEnergy has committed to locate a regional headquarters in Greensburg, Pa., at the current headquarters building of Allegheny Energy. And, the company plans to work with local community colleges to establish a fourth Power Systems Institute (PSI) program in Pennsylvania. PSI is FirstEnergy’s award-winning partnership to educate and train future utility workers.

Previous FirstEnergy mergers – including the 2001 transaction with another Pennsylvania company, GPU, Inc. – resulted in enhanced customer service reliability, improved safety and increased community support.

While we are disappointed that Governor Rendell does not recognize the many benefits of the FirstEnergy and Allegheny Energy merger, we will continue to work through the process to secure the needed regulatory approvals. The process remains on track. We are confident that the Pennsylvania Public Utility Commission (PaPUC) will look at the record of the case and base a decision on the merits. The merger already has been overwhelmingly supported by both companies’ shareholders, and has been approved by the Virginia State Corporation Commission. We hope to receive support from the remaining commissions, including the PaPUC, so that the merger can be completed in the first half of 2011.”

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