Exhibit 99.1
FOR IMMEDIATE RELEASE
Allegheny Energy, Inc. Earnings Per Share Up 18% Over 1999-
Record Earnings Reported
Hagerstown, Md., July 27, 2000 - Allegheny Energy, Inc. (NYSE:
AYE), led by the solid growth of its unregulated businesses, posted
record operating earnings for the second quarter of 2000 and saw an
increase of 18 percent in total earnings per share over the second
quarter of 1999.
Allegheny reported second quarter 2000 earnings of $71.5 million
($.65 per share), compared to 1999 second quarter earnings of $64.5
million ($.55 per share). Included in the second quarter 2000 earnings
was income of $3.6 million ($.03 per share) related to
insurance/litigation settlements. The second quarter of 1999 included a
similar charge of $3.2 million ($.03 per share).
According to Michael P. Morrell, Allegheny Energy's Senior Vice
President and Chief Financial Officer, the Company's strategy of
expanding its energy supply business (Allegheny Energy Supply)
regionally and then nationally; growing its energy delivery business
(Allegheny Power); and adding earnings through its new ventures business
(Allegheny Ventures) is creating benefits for shareholders.
"One of the quarter's success stories was an increase in earnings
for Allegheny Energy Supply, including growth of unregulated sales in
competitive markets," said Morrell. "In addition, Allegheny Power saw
increased sales to regulated customers overall, including its newly
purchased subsidiary, West Virginia Power. And Allegheny Ventures
continues to advance its telecommunications business, adding to earnings
growth.
"This was a great quarter for Allegheny Energy," added Morrell.
"We continue to execute a solid growth strategy and remain on track to
meet earnings estimates for the year."
Earnings for the six months ended June 30, 2000, were $154.3
million ($1.40 per share), excluding the first quarter extraordinary
charge of $70.5 million ($.64 per share) and the second quarter income
of $3.6 million ($.03 per share) related to insurance/litigation
settlements. The earnings for the six months ended June 30, 1999, were
$165.5 million ($1.38 per share), excluding the second quarter charge of
$3.2 million ($.03 per share). The increase in earnings per share is
primarily attributed to increased unregulated sales of electricity and
the Company's 1999 stock repurchase plan.
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Excluding the extraordinary charges and other transactions as shown
on the following chart, earnings for the twelve months ended June 30,
2000, were $299.2 million ($2.69 per share), compared to
$320.1 million ($2.64 per share) for the twelve months ended June 30,
1999. The increase in earnings per share was due to unregulated sales
of electricity, the Company's 1999 stock repurchase program, and lower
depreciation expense.
Per share earnings for the comparable 2000 and 1999 periods are:
<TABLE>
<CAPTION>
6 Months 12 Months
Second Quarter Ended June Ended June
2000 1999 2000 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C>
Earnings before extraordinary
and other transactions $.62 $.58 $1.40 $1.38 $2.69 $2.64
Extraordinary charges for Maryland,
Pennsylvania, and West Virginia
restructuring (.64) (.79) (.08)
Extraordinary charge for call premiums (.09)
Merger-related costs (.11)
Cancelled pumped-storage project costs (.07)
Pennsylvania settlement costs (.20)
Other transactions .03 (.03) .03 (.03) .02 (.03)
____ ____ ____ ____ ____ ____
Reported earnings $.65 $.55 $.79 $1.35 $1.65 $2.33
</TABLE>
The 2000 extraordinary charge of $70.5 million ($.64 per share),
net of tax, reflects write-offs by two of the Company's subsidiaries,
Monongahela Power Company and The Potomac Edison Company, as a result of
West Virginia restructuring legislation. The 1999 extraordinary charges
and the Pennsylvania settlement costs reflect write-offs by the
Company's subsidiary, West Penn Power Company, of costs determined to be
unrecoverable due to restructuring proceedings in Pennsylvania.
Allegheny Energy remained active during the second quarter on a
variety of fronts aimed at increasing revenue and adding to shareholder
value. Some of the highlights of the quarter include:
* Allegheny Stock Earns Buy Recommendations
Allegheny Energy's growth strategy received a vote of confidence from
Wall Street in July when Goldman Sachs and Merrill Lynch added Allegheny
Energy to their recommended lists of stocks to buy. Regulatory Research
Associates, Inc. also assigned Allegheny Energy stock a buy
recommendation in recent months.
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* Adding Another 83 MW to our Non-Regulated Fleet
Allegheny Energy Supply Company, LLC, has signed a definitive
agreement with Potomac Electric Power Company to purchase 4.86 percent
of the Conemaugh Power Station. The purchase will add
83 megawatts (MW) to our fleet at a cost of $76.25 million and gives us
a stronger presence in the Pennsylvania-New Jersey-Maryland power
market. We expect to complete regulatory approvals by the end of 2000,
with the acquisition being accretive to earnings in the first full year.
* Ranked Among the Nation's Top Companies
For the second consecutive year, Allegheny Power has been ranked among
the top electric utilities in a recent national residential customer
satisfaction survey. Allegheny Power was ranked second in the eastern
United States and 19th nationally.
* Growing our Telecommunications Business
In July, Allegheny Communications Connect (ACC), our telecommunications
subsidiary, sold its 50 percent ownership in Allegheny Hyperion
Telecommunications, LLC, to Adelphia Business Solutions for 330,000 shares
of Adelphia Business Solutions' Class A Common Stock. Allegheny Energy plans
further expansion into the fast-growing telecommunications market, providing
opportunities for increased earnings and added value for shareholders.
* Distributed Generation - Moving Forward into New Growth Areas
Allegheny Energy Solutions, our unregulated subsidiary that invests in
the development and marketing of energy-related products and services,
has formed a strategic alliance with Capstone Turbine Corporation, the
world's leading manufacturer of microturbines. The alliance positions
Allegheny Energy Solutions as a leading system integrator for the
Capstone MicroTurbineT system in the Northeast.
* Deregulation Allows for Transfer of Assets to Allegheny Energy Supply
Allegheny Energy plans to transfer 2,100 MW of subsidiary Potomac
Edison's Maryland, Virginia, and West Virginia jurisdictional generating
assets to Allegheny Energy Supply at net book value, pending final
regulatory approval. The addition of these assets will give Allegheny
Energy Supply more than 6,200 MW of low-cost generating capacity to sell
in deregulated markets, increasing opportunities for the Company to gain
revenues from non-regulated energy sales.
Allegheny Energy, Inc. is a diversified energy company
headquartered in Hagerstown, Md. The Allegheny Energy family includes
Allegheny Power, which delivers electric energy and natural gas to about
three million people in parts of Maryland, Ohio, Pennsylvania, Virginia,
and West Virginia; Allegheny Energy Supply Company, LLC, which operates
and markets competitive retail and wholesale electric generation and
operates regulated electric generation for its affiliates; and Allegheny
Ventures, which actively invests in and develops telecommunications and
energy-related projects. For more information, visit our web site at
www.alleghenyenergy.com.
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