AKRON, Ohio, and GREENSBURG, Pa., Dec. 16, 2010 /PRNewswire-FirstCall/ -- FirstEnergy Corp. (NYSE: FE) and Allegheny Energy, Inc. (NYSE: AYE) today announced that they received approval for their merger from the Public Service Commission of West Virginia (WVPSC).
"We are pleased to have successfully completed this important step in our merger process," said Anthony J. Alexander, President and Chief Executive Officer of FirstEnergy. "We believe the commitments we've made to customers in Allegheny Energy's West Virginia service area will bring significant value in terms of reasonable rates, enhanced customer service and continued support for community initiatives. We look forward to a long and successful relationship with the West Virginia communities now served by Allegheny Energy."
"We appreciate the Commission's approval of our proposed merger," said Paul J. Evanson, Chairman, President and Chief Executive Officer of Allegheny Energy. "We are confident this combination will result in a stronger company that will better serve our many stakeholders, including those in West Virginia."
The companies filed their merger application with the WVPSC on May 18, 2010, and filed a settlement agreement with all parties to the application on November 3, 2010. In the application and settlement agreement, the companies committed to:
- Locate 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.
- No net job losses in the utility operating company positions in West Virginia for at least two years as a result of involuntary attrition related to the integration process.
- Expand FirstEnergy's Power Systems Institute program to West Virginia.
- Customer service enhancements and reliability commitments aimed at reducing the duration of outages and improving customer service at the company's call center.
- Maintain the customer call center operations in Fairmont, West Virginia, for at least five years.
The merger application and settlement were supported by the Staff of the WVPSC, the West Virginia Consumer Advocate Division, West Virginia Energy Users Group, the Utility Workers Union 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 merger is expected to close in the first half of 2011, subject to customary closing conditions, including additional regulatory approvals, as outlined in the joint proxy statement/prospectus.
The companies have also received merger approval from the Federal Energy Regulatory Commission and the Virginia State Corporation Commission, and have applications pending with the Pennsylvania Public Utility Commission, and the Maryland Public Service Commission. Shareholders for both FirstEnergy and Allegheny Energy overwhelmingly approved proposals related to the proposed merger.
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.