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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): December 3, 1997
ALLEGHENY ENERGY, INC.
(Exact name of registrant as specified in its charter)
Maryland 1-267 13-5531602
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
10435 Downsville Pike
Hagerstown, Maryland 21740-1766
(Address of principal executive offices)
Registrant's telephone number,
including area code: (301) 790-3400
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Item 5. Other Events.
On December 3, 1997, the Company and its
subsidiary West Penn Power Company announced that they
had reached an agreement to buy out and terminate an
arrangement to purchase power from a proposed 80-
megawatt cogenerating facility near Burgettstown in
Washington County, Pennsylvania, and to settle
associated litigation. Attached is a copy of the press
release.
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.
ALLEGHENY ENERGY, INC.
Dated: December 10, 1997 By: /s/ Thomas K. Henderson
Name: Thomas K. Henderson
Title: Vice President
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EXHIBIT INDEX
Item No. 1 Ex. 1 Press release dated December 3, 1997
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(Allegheny Power Logo) ALLEGHENY POWER NEWS RELEASE
Cynthia A. Shoop
Director, Corporate Communications
10435 Downsville Pike
Hagerstown, MD 21740-1766
Phone: (301) 665-2718
E-Mail: [email protected]
FOR IMMEDIATE RELEASE
Allegheny Energy Reaches Agreement
With Developers of Washington Power Project
(Hagerstown, Md., December 3, 1997) -- Allegheny Energy,
Inc. (NYSE: AYE), its subsidiary, West Penn Power, and the
developers of the Washington Power Project have reached an
agreement to buy out and terminate an arrangement to
purchase power from a proposed 80-megawatt cogenerating
facility near Burgettstown in Washington County, Pa., and to
settle associated litigation.
Under the agreement, West Penn Power, doing business as
Allegheny Power, agreed to buy out and settle the disputed
obligation with the project developers for a cash amount of
$48 million. The agreement is expected to save Allegheny
Power's Pennsylvania customers more than $900 million over
the proposed 33-year life of the project.
The disputed obligation involved Pennsylvania Public Utility
Commission (PUC) orders concerning a 1987 power supply
arrangement under the federal Public Utility Regulatory
Policies Act (PURPA) between West Penn and the developers of
the Washington Power Project.
Currently, the Allegheny Power/West Penn restructuring
filing, filed with the PUC on August 1, 1997, contains
$330.8 million, present value, of stranded costs for the
Washington Power obligation. Those stranded costs have been
removed from the filing. West Penn will file with the PUC
to recover the buyout and associated legal costs.
"This is good news for our Pennsylvania customers," said
Michael P. Morrell, Allegheny Power Senior Vice President
and Chief Financial Officer. "This agreement is the result
of our substantial efforts to mitigate stranded costs for
the benefit of our customers. The lower cost of the buyout
will help keep customer rates the lowest in Pennsylvania and
among the lowest in the Northeast."
In an effort to protect its customers from higher rates,
Allegheny Power had contested PUC changes to the original
agreement before the PUC and numerous appellate courts,
including the United States Supreme Court. The agreement
ends lengthy and expensive litigation for Allegheny Power
and the project's developers.
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Allegheny Energy, Inc. is a registered utility holding
company with three electric subsidiaries doing business as
Allegheny Power. Allegheny Energy's utility subsidiaries
annually provide about 41 billion kilowatt-hours of
electricity to approximately 1.4 million customers in Maryland,
Ohio, Pennsylvania, Virginia, and West Virginia.
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