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): October 26, 2000
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
<PAGE>
Item 1 - 8. Not Applicable
Item 9. On October 31, 2000, Senior Vice President
and Chief Financial Officer Michael P.
Morrell made a presentation as part of the
Edison Electric Institute's Financial
Conference in San Francisco. The slides used
in the presentation follow.
{Slide 1}
Allegheny Energy, Inc.
Perfect Timing
EEI Financial Conference
San Francisco, CA
October 31, 2000
<PAGE>
{Slide 2}
Company Data as of June 30, 2000
Direct Sales 44.8 billion kWh
Number of Employees 5,083
(In thousands except per share amounts)
Total Common Stock Equity $1,687,696
Number of Shares of
Common Stock Outstanding 110,436
Book Value Per Share $15.28
Long-Term Debt $2,315,098
Total Capitalization $4,076,794
Number of Common Shareholders 43.8
Current Annualized Dividend Per Share $1.72
Senior Debt Rating: Moody's S&P Fitch
Monongahela Power A1 A+ AA-
Potomac Edison A1 A+ AA-
West Penn Power A2 A+ A+
Allegheny Energy Supply Baa1 A+ BBB+
Allegheny Energy stock (symbol: AYE) is listed on the
New York, Chicago, and Pacific Stock Exchanges.
Dividend Reinvestment and Stock Purchase Plan available.
________________________________________________________________
Allegheny Energy, Inc. (NYSE: AYE), headquartered in Hagerstown,
Md., is a strong, diversified energy company on the leading edge
of change. We are excited by the challenge of deregulation and
dedicated to the goals of increasing shareholder value, becoming
a successful national supplier of energy and value-added energy-
related services, and diversifying into other ventures related to
our core business which enhance value.
The Allegheny Energy family:
* Allegheny Energy Supply Company, LLC, operates and markets retail
and wholesale electric generation in competitive markets and
operates regulated generation for its affiliates.
* Allegheny Power delivers low-cost, reliable energy to about three
million people in parts of Maryland, Ohio, Pennsylvania, Virginia,
and West Virginia.
* Allegheny Ventures actively invests in and develops
telecommunications and energy-related projects.
* Allegheny Energy Service Corporation provides shared services in
support of the Allegheny Energy businesses.
Allegheny Energy was incorporated in Maryland in 1925. We are a
registered utility holding company under the Public Utility
Holding Company Act of 1935 that has both regulated and
unregulated operations and owns 8,593 megawatts (MW) of low-cost
generation. Our generation mix is 87 percent coal-fired, 0.7
percent hydroelectric, 9.8 percent pumped-storage, and 2.5
percent oil- and natural gas-fired. Allegheny Energy also has 299
MW of generation committed to us under long-term purchase
agreements under the Public Utility Regulatory Policies Act of
1978.
Allegheny Energy's regulated utilities, doing business as
Allegheny Power, are Monongahela Power Company, serving customers
in West Virginia and Ohio; The Potomac Edison Company, serving
customers in Maryland, Virginia, and West Virginia; and West Penn
Power Company, serving customers in Pennsylvania.
For more information, visit our web site at
www.alleghenyenergy.com.
Please direct any questions or comments to:
Michael P. Morrell Regis F. Binder Gregory L. Fries
(301) 665-2716 (301) 665-2715 (301) 665-2713
<PAGE>
{Slide 3}
Certain statements within constitute forward-looking statements
with respect to Allegheny Energy, Inc. Such forward-looking
statements involve known and unknown risks, uncertainties, and
other factors that may cause the actual results, performance, or
achievements of Allegheny Energy to be materially different from
any future results, performance, or achievements expressed or
implied by such forward-looking statements. Such factors may
affect Allegheny Energy's operations, markets, products,
services, and prices. Such factors include, among others, the
following: general and economic and business conditions; industry
capacity; changes in technology; changes in political, social,
and economic conditions; regulatory matters; litigation involving
Allegheny Energy; regulatory conditions applicable to Allegheny
Energy; the loss of any significant customers; and changes in
business strategy or development plans.
<PAGE>
{Slide 4}
Our Strategy
* Grow our successful, low-cost
generating fleet regionally and then
nationally
* Broaden the reach of our world-class
energy delivery business in
contiguous territories
* Add a new dimension of earnings
growth through Allegheny Ventures,
seeking out opportunities related to
our core business
<PAGE>
{Slide 5}
Allegheny Energy
Allegheny Energy, Inc.
________________________|________________________
| | |
Allegheny Energy Supply Allegheny Power Allegheny Ventures
<PAGE>
{Slide 6}
Financial Performance
Targets
* Greater than 10% per year
earnings per share growth
* Allegheny Ventures will contribute
10% of total company net income
in 5 years
* Non-regulated business growth to
at least 70% of total within 5 years
<PAGE>
{Slide 7}
Allegheny Energy Supply Company
Supply
Strategy: Leverage regional generation strength to
become a successful national energy supplier
* Maximize market advantages afforded by our efficient,
low-cost generating assets
* Transfer generation owned by regulated affiliates as
states deregulate
* Add additional units through acquisition and
construction
* Aggressively market electricity - wholesale and retail
<PAGE>
{Slide 8}
{the following is a colored 3-D Column Chart)
<TABLE>
<CAPTION>
Allegheny Energy Supply Company
Capacity Growth 1999 - 2003
<S> <C> <C> <C> <C> <C> <C> <C>
20,000
18,000 ____ 18,201 MW
16,000 ____ ____
14,000 ____ ____
____ 13,217 MW
12,000
____ ____
MW 10,000
____ ____ ____ ____ ____ 9,091 MW
8,000
____
6,000
4,000 ____
2,000 ____ ____ ____ ____ ____ ____ ____
1999 2000 2001 2002 2003 2004 2005
</TABLE>
[blue] Owned/Committed [yellow] Development [red]Purchase
Data Sheet
1999 2000 2001 2002 2003 2004 2005
Owned/Committed 4142 6459 9091 9091 9091 9091 9091
Development 88 88 1966 1966 4126
Purchase 4310 4984 4984 4984 4984
<PAGE>
{Slide 9}
Generation Development Plans
Project Estimated in NERC
Capacity Service Region
88 MW 2001 ECAR
540 MW 2003 ECAR
1,250 MW 2003 SPP
88 MW 2003 ECAR
540 MW 2005 PJM
1,080 MW 2005 WSCC
540 MW 2005 ECAR
________
4,126 MW
<PAGE>
{Slide 10}
Generation Purchase Opportunities
Project Potential
Capacity Closing
4,130 MW 2001
674 MW 2002
________
4,984 MW
<PAGE>
{Slide 11}
Our Competitive Advantages
Marginal Cost Comparison
_______________ Sell to _______________ Sell to _______________
the west the east
ECAR AYE MAAC
1.71 cents/kWh <<<<<<< 1.50 cents/kWh >>>>>>> 1.86 cents/kWh
_______________ _______________ _______________
AYE's direct or easy access to a number of trading hubs
Allows it to take full advantage of price differences.
Source: Donaldson, Lufkin & Jenrette
<PAGE>
{Slide 12}
Allegheny Power
Delivery
Strategy: Consider growth opportunities inside and
outside our traditional service area to deliver
full-service energy
* Continue earnings improvement and operational
excellence through cost management, operating
efficiencies improvement
* Expand the business, primarily through
acquisitions, in areas that are contiguous to our
franchised territory
<PAGE>
{Slide 13}
Allegheny Power
Recent Acquisitions
* West Virginia Power
26,000 new electric customers
24,000 new gas customers
* Mountaineer Gas Company of West Virginia
200,000 new gas customers
11.7 billion cubic feet of gas storage
Expands service territory to 30,000 square
miles and 1.6 million customers
<PAGE>
{Slide 14}
Allegheny Ventures
Growth Opportunities
Strategy: Develop unregulated businesses that
contribute significantly to AYE earnings over
the next five years.
* Develop high-growth opportunities in
telecommunications, distributed generation,
corporate real estate, and other services
* Focus on opportunities with double digit
growth rates
<PAGE>
{Slide 15}
Growth Opportunities
Allegheny Communications Connect
* Delivers fiber optic-based, wholesale
telecommunications services
* America's Fiber Network partner
* Extend network to more than 1,300 miles
by year end 2000
<PAGE>
{Slide 16}
2000 Growth Opportunities
Allegheny Ventures
* Investment in Genosys Technology Management
* Distributed generation opportunities
* Working to extract the value of real
estate holdings
<PAGE>
{Slide 17}
New Issues
* Regulation FD
* PJM West
* FAS 133
<PAGE>
{Slide 18}
SEC Regulation FD
"That's what they say."
* Prohibits intentional disclosure of material
nonpublic information without simultaneous
broad public disclosure (required disclosure
through 8K filing or news release)
* Requires prompt public disclosure of
unintentionally disclosed material information
(within 24 hours or prior to the next trading day,
whichever is the longer period)
* Earnings guidance, either given expressly or
indirectly, by private discussion with
analysts/investors invites a high degree of risk
* Review and comment on analyst reports/models
should be limited to historical fact or factual description
<PAGE>
{Slide 19}
PJM West
What it means to Allegheny Energy
* Expands our reach in Mid-Atlantic energy market
* Boosts competitiveness of our generating assets
ECAR generation capacity reserve rules apply
Transmission reliability constraints alleviated
* Ability to sell power through bilateral contracts or
the PJM Power Exchange
* Meets requirements of FERC Order 2000
* Gives PJM functional control of our transmission
assets
<PAGE>
{Slide 20}
FAS 133
* Requires recognition of derivatives at
fair value
* Requires fair value changes to be
recognized in earnings
* Will increase earnings volatility
<PAGE>
{Slide 21}
{the following is a 3-D column chart}
<TABLE>
<CAPTION>
Operating Earning History
<S> <C> <C> <C> <C> <C> <C>
$2.70
_____ _____
$2.50
_____
$2.30
_____ _____
$2.10
$1.90
_____
$1.70
$1.50
1995 1996 1997 1998 1999 2000
</TABLE>
Five Year Annual EPS Compound Growth Rate: 7.4%
Twelve months ended June 30, 2000
Excludes the effects of one-time events
Data Sheet
1995 1996 1997 1998 1999 2000
1.88 2.32 2.12 2.26 2.64 2.69
<PAGE>
{Slide 22}
Performance Metrics
Allegheny Industry
Energy Average*
EPS Growth 6.8% 1.9%
Five years ended 12/31/99
Return on Equity 17.0% 12.9%
One-year period ending 6/30/00
Five-Year Average 13.4% 11.8%
1995-1999
Total Return 10.2% 9.5%
Five years ended 12/31/99
* Source - Regulatory Research Associates, Inc.
<PAGE>
{Slide 23}
Hidden Value
2000E* P/E 2000 Value
Generation $1.86 20.0 $37.20
Delivery 0.93 11.0 10.23
Ventures 0.06 50.0 3.00
_____ ______
Sum $2.85 $50.43
Stock Price (as of 9/30/00) = 38.00
______
Hidden Value = $12.43
* Recent Goldman Sachs estimate
<PAGE>
{Slide 24}
Why Allegheny ?
Industry expertise
High-quality, low-cost assets
Powerful brand
Hidden value
Proven track record
Sound strategies in unrelated and regulated businesses
Commitment to earnings growth and
Shareholder value
<PAGE>
{Slide 25}
Allegheny Energy, Inc.
Setting the Standard for
Others to Follow
<PAGE>
{Slide 26}
Allegheny Energy, Inc.
Presentation Supplement
<PAGE>
{Slide 27}
<TABLE>
<CAPTION>
Allegheny Energy, Inc.
Generation Station Data
MW Ownership Split Net Book Value @ 12/31/99 ($000)
Allegheny Allegheny
Power Fuel Capacity Mon. Energy Mon. Energy
Station Type (MW) Power Supply Co. Power Supply Co. Total
<C> <C> <C> <C> <C> <C> <C> <C>
Albright 1 Coal 76 76.0 $6,981 $6,981
Albright 2 Coal 76 76.0 $11,542 $11,542
Albright 3 Coal 140 140.0 $21,564 $21,564
Armstrong 1 Coal 180 180.0 $88,853 $88,853
Armstrong 2 Coal 176 176.0 $53,422 $53,422
Fort Martin 1 Coal 552 138.0 414.0 $7,096 $147,720 $154,816
Fort Martin 2 Coal 561 112.2 448.8 $5,695 $55,717 $61,412
Harrison 1 Coal 650 162.5 487.5 $102,422 $328,488 $430,910
Harrison 2 Coal 650 162.5 487.5 $20,139 $72,409 $92,548
Harrison 3 Coal 650 162.5 487.5 $19,893 $70,417 $90,310
Hatfield 1 Coal 570 156.8 413.2 $36,968 $90,857 $127,825
Hatfield 2 Coal 570 156.8 413.2 $21,973 $42,870 $64,843
Hatfield 3 Coal 570 156.8 413.2 $20,930 $53,408 $74,338
Mitchell 1 Oil 50 50.0 $14,928 $14,928
Mitchell 2 Oil 82 82.0 $14,928 $14,928
Mitchell 3 Coal 288 288.0 $46,663 $46,663
Pleasants 1 Coal 626 156.5 469.5 $68,380 $205,996 $274,376
Pleasants 2 Coal 640 160.0 480.0 $31,941 $107,620 $139,561
Rivesville 5 Coal 48 48.0 $10,446 $10,446
Rivesville 6 Coal 94 94.0 $10,446 $10,446
Smith 3 Coal 28 28.0 $2,559 $2,559
Smith 4 Coal 87 87.0 $22,169 $22,169
Willow Island 1 Coal 55 55.0 $12,408 $12,408
Willow Island 2 Coal 188 188.0 $29,562 $29,562
Bath County Pumped 840 226.8 613.2 $162,282 $438,761 $601,043
(AGC) Storage
Lake Lynn Hydro 52 52.0 $13,055 $13,055
PE Hydro Hydro 6 6.0 $4,995 $4,995
Springdale CT 1 Gas CT 44 44.0 $22,634 $22,634
Springdale CT 2 Gas CT 44 44.0 $22,634 $22,634
Total Owned Capacity 8,593 2,352.4 6,240.6 $593,687 $1,928,084 $2,521,771
Book Value/KW @ 12/31/99 $252.38 $308.96
</TABLE>
* Excludes Springdale 7 and 8, 207 MW of oil-fired capacity in cold
reserve, and PURPA capacity of 470 MW under contract.
<PAGE>
{Slide 28}
Allegheny Energy Supply Generating Stations
1999 Capacity Factors
Generating 1999 Net Capacity
Station Generation (MWh) Factor %
Harrison 13,657,289 81
Hatfield's Ferry 8,383,345 60
Fort Martin 8,182,188 84
Pleasants 7,844,721 72
Armstrong 1,920,970 63
Bath County* 1,526,824 21
Mitchell 1,477,050 41
Willow Island 1,460,199 70
Albright 1,174,949 46
Rivesville 338,728 28
R. Paul Smith 336,613 34
Lake Lynn* 94,561 21
PE Hydro* 26,747 72
Allegheny Energy 1&2 6,881 17
__________ _____
46,431,065 69% *
*System average capacity factor of 69% compares to 68% in 1998
(calculation of average excludes hydro/pumped storage stations)
<PAGE>
{Slide 29}
{The following is a graph chart}
% Revenues from Nonutility
Operations
80% __________________________________________________________
70% ________________________________________________________._
.
60% _______________________________________.__________________
.
50% __________________________________________________________
40% __________________________________________________________
.
30% __________________________________________________________
20% __________________________________________________________
10% ___.______________________________________________________
.
0% __________________________________________________________
1998 1999 2000 2001 2002 2003 2004
Year
Data Sheet
Revenues
1998 2576436744 246983410 10%
1999 2808441349 251230796 9%
2000 2885792961 994349885 36%
2001 3221949725 1169956080 57%
2002 3328139582 1760595000 61%
2003 3654866332 2065068000 65%
2004 3961854681 2372297000 70%
Net Income
1998 287000000 -1000000 0%
<PAGE>
{Slide 30}
{The following is a graph chart}
% Net Income from Nonutility
Operations
80% ____________________________________________________________
.
.
70% _______________________________________.____________________
.
60% ____________________________________________________________
50% ____________________________________________________________
40% ____________________________________________________________
.
30% ____________________________________________________________
20% ____________________________________________________________
.
10% ____________________________________________________________
0% ___.________________________________________________________
1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004
Year
Data Sheet
Revenues:
1998 2576436744 246983410 10%
1999 2808441349 251230796 9%
2000 2885792961 994349885 34%
2001 3221949725 1169956080 36%
2002 3328139582 1760595000 53%
2003 3654866332 2065068000 57%
2004 3961854681 2372297000 60%
Net Income:
1998 287000000 -1000000 0%
1999 307000000 50000000 16%
2000 306521625 104266575 35%
2001 393024175 179125156 65%
2002 468735508 298384137 69%
2003 524118799 361428791 72%
2004 603049043 425327307 76%
<PAGE>
{Slide 31}
Historical Quarterly Operating
Earnings for the Period 1995-1999
First quarter 28%
Second quarter 21%
Third quarter 26%
Fourth quarter 25%
100%
<PAGE>
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.
/S/ THOMAS K. HENDERSON
Name: Thomas K. Henderson
Title: Vice President
Dated: October 31, 2000
<PAGE>
