The agreement is retroactive to May 1, 2001, when the last contract expired.
That means that the 1,165 union employees, mostly line and power station workers, will soon get checks reflecting a year's worth of raises, he said.
"They stayed on the job and they worked for it," Sterner said.
About 200 union members work in Washington and Frederick counties, he said.
But pay wasn't the biggest sticking point.
Pension and health care benefits, along with an employee grievance system, were the major points of negotiation, he said.
The new contract preserves hospitalization benefits and makes other improvements to the health care and retirement plans, he said.
Union workers agreed to several management requests concerning work rules. For example, line workers will take home trucks so they can respond directly to power outages instead of reporting to a central location first, he said.
Allegheny Energy declined to discuss details of the contract, continuing a policy in effect throughout negotiations, spokesman Allen Staggers said.
The company is glad the issues are resolved and believes the new contract is fair, he said.
"We value our employees and recognize the important role they play in ensuring that we provide low-cost, reliable energy with industry-leading service to our customers," Robert Summers, Allegheny Energy's chief negotiator, said in a prepared statement.
Never in the company's history have union employees worked for so long under the terms of a previous contract without going on strike, both Sterner and Staggers said.
Allegheny serves electricity customers throughout the Tri-State area.
Over the past year, some Allegheny union workers and their supporters put up signs saying, "Allegheny Energy - Financially Sound, Morally Bankrupt."
"Now that we have ratification, the members and the public are urged to take the signs down," Sterner said.