Profile: Allegheny Energy, Inc. (AYE.N)

Allegheny Energy, Inc. (Allegheny), incorporated in 1925, is an integrated energy business that owns and operates electric generation facilities and delivers electric services to customers in Pennsylvania, West Virginia, Maryland and Virginia. Allegheny operates in two business segments: the Delivery and Services segment, which includes Allegheny’s electric transmission and distribution (T&D) operations, and the Generation and Marketing segment, which includes Allegheny’s power generation operations.

Delivery and Services

The Delivery and Services segment primarily consists of Allegheny’s regulated utility subsidiaries. These subsidiaries include Monongahela Power Company (Monongahela), excluding its generation operations, The Potomac Edison Company (Potomac Edison) and West Penn Power Company (West Penn) (collectively, the Distribution Companies). The Distribution Companies does business under the trade name Allegheny Power. Allegheny Power’s principal business is the operation of electric public utility systems. The Company’s other subsidiaries include Trans-Allegheny Interstate Line Company (TrAIL Company) and Potomac-Appalachian Transmission Highline, LLC ( PATH, LLC). TrAIL Company was formed in connection with the management and financing of transmission expansion projects, including the Trans-Allegheny Interstate Line (TrAIL), a 500 kilovolt transmission line to extend from southwestern Pennsylvania through West Virginia and into northern Virginia. PATH, LLC, which is a series limited liability company, was formed with a subsidiary of American Electric Power Company, Inc. (AEP) to build the Potomac-Appalachian Transmission Highline (PATH), a transmission line that is to extend through West Virginia and into Maryland.

Monongahela conducts an electric T&D business that serves approximately 381,000 customers in northern West Virginia in a service area of approximately 13,000 square miles with a population of approximately 791,000. Potomac Edison operates an electric T&D system in portions of West Virginia, Maryland and Virginia. Potomac Edison serves approximately 480,000 customers in a service area of about 7,500 square miles with a population of approximately 1.06 million. West Penn operates an electric T&D system in southwestern, south-central and northern Pennsylvania. West Penn serves approximately 713,000 customers in a service area of about 10,400 square miles with a population of approximately 1.5 million.

The Generation and Marketing Segment

The Generation and Marketing segment primarily consists of Allegheny’s electric generation subsidiaries, Allegheny Energy Supply Company, LLC (AE Supply) and Allegheny Generating Company (AGC), as well as Monongahela’s generation operations. AE Supply owns, operates and manages electric generation facilities. AE Supply also purchases and sells energy and energy-related commodities. As of December 31, 2008, AE Supply owned or contractually controlled approximately 6,919 megawatts of generation capacity. AE Supply markets its electric generation capacity to various customers and markets. In addition, AE Supply has contracts with Potomac Edison to supply most of the power necessary to serve Potomac Edison’s Virginia customers through mid-2011, and is serving a portion of Potomac Edison’s customer load in Maryland pursuant to contracts that range in length from 5 to 29 months.

As of December 31, 2008, Monongahela owned or contractually controlled 2,811 megawatts of generation capacity. Monongahela’s generation capacity supplies Monongahela’s Delivery and Services segment. AGC owns and sells generation capacity to AE Supply and Monongahela, which own approximately 59% and 41% of AGC, respectively. AGC’s sole asset is a 40% undivided interest in the Bath County, Virginia pumped-storage hydroelectric generation facility and its connecting transmission facilities.