AYE Wins Regulatory Approval

Allegheny Energy Inc. (AYE - Analyst Report) has recently bagged an approval from the West Virginia Public Service Commission to sell $105 million in bonds. The proceeds will be utilized to finance its ongoing gas scrubber project on-going scrubber project (flue gas de-sulfurization) at its 1,107MW coal-fired Fort Martin Power Station near Morgantown , West Virginia . In July 2009, Allegheny Energy, requested to raise approximately $105 million through environmental control bonds with a term of up to 10 years. 

Earlier in January 2007, Allegheny Energy received the commission’s approval to gather $450 million of the total estimated cost of $550 million for the scrubber project through securitized financing. 

Allegheny Energy plans to repay the bonds by adjusting the current Environmental Control Charge from West Virginia customers. As per company estimates, this would raise the average bill for a customer with a monthly consumption of 1,000 kilowatt-hours of electricity by 76 cents, or less than 1%. 

Headquartered in Greensburg , Pennsylvania , Allegheny Energy is an electric utility company with over $3 billion in annual revenues. The company is engaged in both regulated electricity and natural gas distribution utility operations as well as in the unregulated wholesale energy markets. It owns and operates generating facilities and serves electricity to approximately 1.6 million customers spread across the states of Pennsylvania, West Virginia, Maryland and Virginia. We reiterate our Neutral recommendation on the shares.