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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 4,
1998
WEST PENN POWER COMPANY
(Exact name of registrant as specified in its charter)
Pennsylvania 1-255-2 13-5480882
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
800 Cabin Hill Drive
Greensburg, PA 15601
(Address of principal executive offices)
Registrant's telephone number,
including area code: (724) 837-3000
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Item 5. Other Events.
West Penn Power Company, a subsidiary of Allegheny
Energy, Inc., has reached a settlement with intervenors
in its Pennsylvania Restructuring Case. The settlement
was tentatively approved by the Pennsylvania Public
Utility Commission on November 4, 1998. Attached as
Exhibit 99.1 is a copy of the press release.
Item 7 Exhibits
Ex. 99.1 Press release dated November 4, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned thereunto duly
authorized.
West Penn Power Company
Dated: November 6, 1998 By: /s/ Thomas K. Henderson
Name: Thomas K. Henderson
Title: Vice President
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EXHIBIT INDEX
Item No. 7 Exhibits
Ex. 99.1 Press release dated November 4, 1998
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Exhibit 99.1
Allegheny Energy, Inc. Subsidiary Reaches
Settlement in Pennsylvania Restructuring Case
(Hagerstown, Md., November 4, 1998) - Allegheny Energy, Inc.
(NYSE: AYE) today announced that its Pennsylvania subsidiary,
West Penn Power, has reached a fair and equitable settlement
agreement with the intervenors in its Pennsylvania restructuring
case. The settlement agreement was tentatively approved by the
Pennsylvania Public Utility Commission (PUC) at its public
meeting today.
According to Michael P. Morrell, Allegheny Energy's Senior Vice
President and Chief Financial Officer, "This agreement eliminates
uncertainty and gives financial flexibility to our Company while
allowing customer choice to move forward for the benefit of
consumers. The PUC and, most notably, Chairman John Quain and
Commissioner Nora Mead Brownell, are to be commended for bringing
the parties together to reach this settlement, which provides
savings for the state's electric consumers and the continued
opportunity for reasonable shareholder returns."
Morrell praised the efforts of the PUC in advancing a settlement
in West Penn Power's restructuring case that includes a rate
reduction, rate caps, and an increased opportunity for
Pennsylvania's consumers to shop for the electric supplier of
their choice.
"Allegheny Energy is already the lowest-cost electric utility in
the state," added Morrell. "The provisions of the settlement will
mean even greater value to consumers in the future, clearing the
way for the beginnings of true competition in Pennsylvania."
The settlement agreement includes the following:
- Establishes for West Penn customers an average
shopping credit of 3.16 cents per kilowatt-hour in
1999 for customers who shop for the generation
portion of electricity services.
- Gives two-thirds of West Penn's customers the
option of selecting a generation supplier on
January 2, 1999, with all customers able to shop
on January 2, 2000.
- Provides for a 2.5 percent rate decrease
throughout 1999, accomplished by an equal
percentage decrease for each rate class.
- Provides that the regulated rates charged by
West Penn for the delivery of electricity are
capped through 2005, subject to exceptions in the
Public Utility Code.
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- Provides that customers will have the option of
buying electricity from West Penn at capped
generation rates through 2008.
- Sets aside funds for the development and use of
renewable energy and clean energy technologies,
energy conservation, and energy efficiency.
- permits recovery of $670 million in transition
costs over 10 years beginning in January 1999 for
West Penn Power. In the event that the merger of
Allegheny Energy, Inc. and DQE, Inc. is
consummated, the transition costs will be adjusted
to $630 million to provide a sharing of merger
synergy savings with customers.
- Grants West Penn's application to issue bonds
to "securitize" up to $670 million (or $630
million in the event of the merger) in transition
costs and to provide 75 percent of the associated
savings to customers with 25 percent to
shareholders.
- Allows for more stranded cost recovery to be
recognized in the earlier part of the transition
period.
- Includes a commitment to sell a portion of the
output of West Penn's generation to the wholesale
Electric Generation Supplier market through 2002.
- Authorizes the transfer of West Penn's
generating assets to a non-regulated corporate
entity at book value.
- If West Penn is forced to divest some
generating assets or chooses to divest all of its
generation before 2002, the Competitive Transition
Charge will be adjusted, either up or down, based
on the results of such divestiture.
Allegheny Energy has long been a proponent of true competition in
the electric power industry. The Company believes this settlement
is a very positive step forward as the PUC seeks to implement
customer choice and competition in the state at the beginning of
1999. The Company anticipates final approval of the settlement
before the end of this year.
Headquartered near Hagerstown, Md., Allegheny Energy, Inc., with
operating subsidiaries doing business as Allegheny Power,
provides low-cost electric service to 1.4 million customers in
parts of Maryland, Ohio, Pennsylvania, Virginia, and West
Virginia.
