Press Release

PUC Approves Merger of Allegheny Power, TrAILCo and FirstEnergy

Published on 2/24/2011

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today approved the joint application filed by West Penn (Allegheny Power), Trans-Allegheny Interstate Line Company (TrAILCo) and FirstEnergy to obtain approval for a change of control of Allegheny and TrAILCo.   Allegheny and TrAILCo will become a wholly owned subsidiary of FirstEnergy.

The Commission voted 3-2 to approve a joint motion by Commissioners Robert F. Powelson and John F. Coleman to begin a statewide investigation to ensure that a properly functioning and workable competitive retail electricity market exists in the state, in addition to adding provisions to the Code of Conduct Rulemaking currently being considered, and requiring FirstEnergy to xoordinate with EGSs to address operational issues. The Commissioners voted 4-1 to approve a motion by Wayne E. Gardner adding conditions to the merger related to protecting the ensuring financial and operational stability. Chairman James H. Cawley issued a dissenting statement, agreeing to many of the additional requirements imposed on the merger applicants by the Motions, but stating that additional conditions to mitigate future retail and wholesale market  power should have been imposed.  Vice Chairman Tyrone J. Christy issued a dissenting statement.

As part of its review of the application, the Commission found that the merger would be in the public interest. Under the terms of the agreement, Allegheny will become a wholly owned subsidiary of FirstEnergy.  FirstEnergy will remain the ultimate corporate parent of Met-Ed, Penelec and Penn Power and all other FirstEnergy subsidiaries, and will become the ultimate corporate parent of Allegheny and all of the Allegheny subsidiaries, including West Penn and TrAILCo.  Following the merger, Met-Ed, Penelec, Penn Power, West Penn and TrAILCo will continue to operate as Pennsylvania public utilities and remain under the Commission’s jurisdiction.  The merger will not affect the day-to-day operations of these utilities.

On May 14, 2010, Allegheny Power, TrAILCo and FirstEnergy filed a joint application to obtain approval for a change of control of Allegheny and TrAILCo.   Allegheny and TrAILCo will merge with a wholly-owned subsidiary of FirstEnergy.  On Aug. 3, 2010, a public input hearing to receive comments on the application was held in Greensburg.

Audio of today’s Public Meeting is available at the following link: http://www.puc.state.pa.us/general/PMAudio.aspx

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities to ensure safe and reliable utility service at reasonable rates; protect the public interest; educate consumers to make independent and informed utility choices; further economic development; and foster new technologies and competitive markets in an environmentally sound manner.

For recent news releases, audio of select Commission proceedings or more information about the PUC, visit our website at www.puc.state.pa.us.

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Docket Nos. A-2010-2176520; A-2010-2176732

Contact:

• Denise McCracken
  Senior Communications Specialist
  717-787-5722
  demccracken@pa.gov