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Allegheny optimistic about competitive future

February 25, 1997

By GUY FLETCHER

Staff Writer

The anticipated move toward competition in the electric supply industry could find the Hagerstown-based Allegheny Power offering electricity to most any home or business east of the Mississippi River, officials said.

"We want to be a supplier of choice when choice comes, and we think that's going to happen," Alan J. Noia, president and chief executive officer of the company, said Monday.

Allegheny Power is pushing for federal legislation, currently under consideration in Congress, that would repeal existing utility laws and enact new ones. The package would ensure that customers could choose their energy suppliers and would replace the patchwork of existing state-by-state utility reforms, Noia said.

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"What we would like to see is a set of uniform rules," he said.

Noia said having customers choose their electric company will benefit Allegheny Power because the utility can sell electricity at a lower cost than can many suppliers. Choice also would open Allegheny Power to new markets from which existing regulations bar it.

"We believe we can make more money in the competitive market than we can in the regulated market," he said.

The move toward competition and away from regulation has intensified in recent years in the utility industry. Several states have opened the doors for companies to expand their boundaries, both geographically and philosophically. Last week, Washington Gas officials said they are preparing to sell electricity in the Washington, D.C., metropolitan area.

"Everybody wants to get into the act and everybody is getting into the act," Noia said.

Natural gas is a market Allegheny Power would like to enter, if future legislative changes allow the company to do so.

The company also is looking into various telecommunications ventures, such as fiber optics and personal communications systems.

"You are going to see some new, exciting things out of Allegheny Power in the coming months and years as competition unfolds," said Cynthia Shoop, manager of corporate communications for Allegheny Power.

The company is holding firm to its position that the $405 million AES Warrior Run power plant, scheduled to open near Cumberland, Md., in 1999, will help neither competition nor the local economy.

Allegheny Power, which has an agreement to purchase electricity from AES, maintains that the plant is unneeded and will raise electric rates by 13 percent, increasing the average monthly bill from $72 to $81.65.

Steve Hase, development director for AES Warrior Run, said Allegheny Power's numbers are "very exaggerated" and that the actual rate increase will be between 2 percent and 7 percent.

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