AKRON, Ohio, and GREENSBURG, Pa., Oct. 25 /PRNewswire-FirstCall/ -- 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:
- 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.
- Nearly $11 million in customer credits for West Penn Power residential customers over a three-year period.
- 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.
- Reliability improvements aimed at reducing the number and duration of outages for West Penn Power customers.
- Additional funding for the West Penn Power Customer Assistance Program.
- 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.
- Long-term contracts for the purchase of Solar Photovoltaic Alternative Energy Credits between 2011 and 2021.
- A commitment of contributions to the West Penn Power Sustainable Energy Fund.
- Outreach to West Penn Power customers – including the establishment of a retail choice ombudsman – to promote and encourage customer choice and shopping.
- Additional customer usage information to competitive generation suppliers to help support a vibrant competitive marketplace in Pennsylvania.
- 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.
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
In addition to historical information, this news release may contain a number of "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Words such as anticipate, expect, project, intend, plan, believe, and words and terms of similar substance used in connection with any discussion of future plans, actions, or events identify forward-looking statements. Forward-looking statements relating to the proposed merger include, but are not limited to: statements about the benefits of the proposed merger involving FirstEnergy and Allegheny Energy, including future financial and operating results; FirstEnergy's and Allegheny Energy's plans, objectives, expectations and intentions; the expected timing of completion of the transaction; and other statements relating to the merger that are not historical facts. Forward-looking statements involve estimates, expectations and projections and, as a result, are subject to risks and uncertainties. There can be no assurance that actual results will not materially differ from expectations. Important factors could cause actual results to differ materially from those indicated by such forward-looking statements. With respect to the proposed merger, these factors include, but are not limited to: the risk that FirstEnergy or Allegheny Energy may be unable to obtain governmental and regulatory approvals required for the merger, or required governmental and regulatory approvals may delay the merger or result in the imposition of conditions that could reduce the anticipated benefits from the merger or cause the parties to abandon the merger; the risk that a condition to closing of the merger may not be satisfied; the length of time necessary to consummate the proposed merger; the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; the diversion of management time on merger-related issues; the effect of future regulatory or legislative actions on the companies; and the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect. These risks, as well as other risks associated with the merger, are more fully discussed in the joint proxy statement/prospectus that is included in the Registration Statement on Form S-4 (Registration No. 333-165640) that was filed by FirstEnergy with the SEC in connection with the merger. Additional risks and uncertainties are identified and discussed in FirstEnergy's and Allegheny Energy's reports filed with the SEC and available at the SEC's website at www.sec.gov. Forward-looking statements included in this document speak only as of the date of this document. Neither FirstEnergy nor Allegheny Energy undertakes any obligation to update its forward-looking statements to reflect events or circumstances after the date of this document.
SOURCE FirstEnergy Corp.