[LOGO]ALLEGHENY ENERGY
NEWS RELEASE
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Allen Staggers
Manager, Communications
724-830-5433
Jay Mason
Manager, Communications
301-790-6140
FOR IMMEDIATE RELEASE
Allegheny Energy, Inc. Subsidiary
Completes Purchase of Mountaineer Gas Company
Hagerstown, Md., August 24, 2000 - Allegheny Power, the energy delivery
company of Allegheny Energy, Inc. (NYSE: AYE), has successfully completed its
$323 million purchase of Mountaineer Gas Company (MGC), West Virginia's largest
natural gas provider. Allegheny Energy assumed ownership from Energy Corporation
of America on Aug. 18, 2000.
The transaction is expected to provide shareholder value and be accretive
to earnings in the first full year. Allegheny expects to realize cost savings
primarily from the integration of administrative functions. MGC's service
territory is contiguous to Allegheny's service territory and adjoins the service
territory of its most recent acquisition, West Virginia Power.
"This addition of Mountaineer Gas Company to the Allegheny Energy family is
another step in our strategy of diversifying our energy business by adding more
natural gas to our fuel portfolio," said Alan J. Noia, Chairman, President, and
Chief Executive Officer of Allegheny Energy. "It further advances our delivery
company's strategy of growing through acquisitions and broadening its reach."
The acquisition of MGC provides Allegheny Energy with 11.7 billion cubic
feet of gas storage and 200,000 new natural gas customers in a region where the
Company already provides energy services. The transaction also includes
Mountaineer Gas Services, a MGC subsidiary that operates natural gas producing
properties, gas gathering facilities, and intrastate transmission pipelines,
including approximately 375 wells in the Appalachian area.
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ALLEGHENY ENERGY/MOUNTAINEER GAS ACQUISITION
PAGE TWO
This acquisition will grow Allegheny's service territory to more than
31,000 square miles and its customer base to 1.6 million customers. Allegheny
plans to manage the Mountaineer Gas operations out of Charleston, W.Va., and
Allegheny Power's President Jay S. Pifer will manage the newly acquired company.
"We will focus on integrating Mountaineer Gas Company into Allegheny's
operations in the coming months," said Noia. "We want to ensure that we build
upon the solid reputation of Mountaineer Gas Company and continue to deliver our
operating expertise, which will provide benefits to customers, employees, and
shareholders. Allegheny Power is nationally recognized for our excellent
customer service, and we will continue to provide quality service to our new
customers across West Virginia."
Allegheny Energy, Inc. is a diversified energy company headquartered in
Hagerstown, Md. The Allegheny Energy family includes Allegheny Energy Supply
Company, LLC, which operates and markets competitive retail and wholesale
electric generation and operates regulated electric generation for its
affiliates; Allegheny Power, which delivers electric energy and natural gas to
three million people in parts of Maryland, Ohio, Pennsylvania, Virginia, and
West Virginia; and Allegheny Ventures, which actively invests in and develops
telecommunications and energy-related projects. For more information, check our
web site at www.alleghenyenergy.com.
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[LOGO]ALLEGHENY POWER
An Allegheny Energy Company
NEWS RELEASE
--------------------------------------------------------------------------------
Allen Staggers
Manager, Communications
724-830-5433
Jay Mason
Manager, Communications
301-790-6140
FOR IMMEDIATE RELEASE
---------------------
ALLEGHENY POWER COMPLETES ACQUISITION OF MOUNTAINEER GAS COMPANY
GREENSBURG, PA., AUGUST 24, 2000 -- Allegheny Power, the energy delivery
business of Allegheny Energy, today announced that it has completed the
acquisition of Mountaineer Gas Company (MGC), a wholly owned subsidiary of
Energy Corporation of America, for $323 million (which includes the assumption
of $100 million in debt).
"We are extremely pleased to announce the completion of this acquisition
and look forward to continuing our commitment to West Virginia by serving
200,000 new customers," said Jay S. Pifer, President of Allegheny Power.
"Mountaineer Gas is a fine company with employees that share Allegheny's values
of providing quality customer service while offering low rates."
"Today's announcement represents the second significant acquisition
completed by Allegheny Power in the past nine months," said Jay S. Pifer,
President of Allegheny Power. "It illustrates one component of our growth
strategy--the expansion of our business. While we will continue to grow our
revenues and achieve operational excellence, we believe that adding energy
delivery operations increases our customer base and provides stable cash flow
while at the same time diversifying our asset portfolio. As always, we remain
focused on growing our earnings and providing consistent, attractive returns to
our shareholders."
With the acquisition of Mountaineer Gas, coupled with the recent
acquisition of West Virginia Power, Allegheny Power now provides natural gas
sales, transportation, and distribution services to more than 225,000 new
customers throughout West Virginia. The transaction also includes Mountaineer
Gas Services, a MGC subsidiary that operates natural gas producing properties,
gas gathering facilities, and intrastate transmission pipelines, including
approximately 375 wells in the Appalachian area.
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ALLEGHENY POWER/MOUNTAINEER GAS ACQUISITION
PAGE TWO
With the acquisition of MGC, West Virginia's largest natural gas provider
and one of the lowest-cost suppliers in the state, Allegheny will expand its
service territory to more than 31,000 square miles with a total customer base of
more than 1.6 million. The purchase also provides Allegheny with 11.7 billion
cubic feet of gas storage in a region where the Company currently provides
energy services.
Allegheny Power will now provide either electric or gas service to all of
West Virginia's 55 counties. Currently, the Allegheny companies operate six
coal-burning power stations, a 24-hour state-of-the-art Customer Service Center,
a Corporate Training Center, and 21 operating service centers, with
approximately 2,000 employees working in the state. Allegheny has been part of
the West Virginia business community for more than 100 years.
The Public Service Commission of West Virginia, the Department of
Justice/Federal Trade Commission, and the Securities and Exchange Commission
approved the transaction. Final regulatory approval was received on Aug. 11 and
the closing occurred on Aug. 18.
Allegheny Power, an Allegheny Energy company, delivers low-cost, reliable
energy to about three million people in parts of Maryland, Ohio, Pennsylvania,
Virginia, and West Virginia. Allegheny Energy, Inc. is a diversified energy
company headquartered in Hagerstown, Md. In addition to Allegheny Power, the
Allegheny Energy family includes 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 energy-related and
telecommunications projects. For more information, check our web site at
www.alleghenypower.com.
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