The average Allegheny Power customer in Maryland would see a $1.04 cut in monthly electric bills.
Average bills for the company's customers in Franklin and Fulton counties in Pennsylvania would drop 70 cents a month.
The merger was heavily scrutinized by Pennsylvania regulators, who were concerned about a power monopoly, Morrell said.
To satisfy regulators, Allegheny Energy agreed to sell power generated at DQE's plant in Cheswick, Pa., to help dilute the strength of the merged company in the marketplace.
It also agreed to continue its efforts to join the Midwest Independent System Operator, a compact of regional utilities that encourages competition in the industry.
In addition to the rate reductions, the merger would eliminate an estimated 500 jobs, mostly through attrition, company officials have said.
Allegheny Energy has 1.4 million customers in Maryland, Ohio, Pennsylvania, Virginia and West Virginia.
Pittsburgh-based DQE, which does business as Duquesne Light, has 580,000 customers, all in Pennsylvania.
The new Allegheny Energy would be the 10th-largest investor-owned utility in the country based on total kilowatt-hour sales.
The merger was approved in March by the Maryland Public Service Commission.
Earlier this month, Allegheny Energy reached a settlement with Pittsburgh Mayor Tom Murphy.
In exchange for the city's support of the merger, the company will contribute $4 million a year for four years to Pittsburgh's economic development fund.
The proposed merger was announced in April 1997.
