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Energy analyst: Allegheny may move

October 03, 2003|by JULIE E. GREENE

julieg@herald-mail.com

Allegheny Energy could be considering moving its corporate headquarters from southwest of Hagerstown to Pittsburgh, according to a New York energy analyst.

Williams Capital energy analyst Christopher Ellinghaus said he based the comment in his report on "many little tidbits" he heard that made him think the utility would move to Pittsburgh.

"I wouldn't say it's 100 percent. There are rumors," Ellinghaus said Thursday.

Ellinghaus said he was not able to confirm the rumors with Allegheny's senior management.

An Allegheny public affairs spokesman did not return repeated messages and pages about the matter on Thursday.

A woman in Allegheny's communications office said the public affairs people had been busy and no one would be able to comment Thursday.

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In his Sept. 30 report on Allegheny, Ellinghaus wrote about Allegheny Chief Executive Officer Paul Evanson's top priorities.

"The company has taken the first steps toward getting back on schedule with its financial reporting. No fraud has been discovered, just stupidity. Internal accounting and reporting functions are being bolstered. However, he (Evanson) noted that a complete revamping of internal controls are not expected to be completed until the end of next year. Presumably this will coincide with a move of the corporate HQ to Pittsburgh next year."

In July, Allegheny Energy Inc. sent an internal communication to its employees telling them that real estate consultants would be touring the property at the Downsville Pike corporate headquarters because it might be put up for sale.

The e-mail stated, in part: "While no decisions have been made on the sale of this property, this is another option that we must consider in order to improve our financial performance. If a decision is made to sell the property, our plan at this time would be to lease back this facility for our continued future use, as we have done in the past with other properties."

The company has been selling assets to raise cash to pay back a $2.4 billion financing deal it secured in February. That deal allowed the utility to avoid filing for bankruptcy.

In March, Allegheny shareholders narrowly agreed to surrender their pre-emptive rights, opening the door to a sale of part or all of the utility.

The move would give the company more options to raise cash, Allegheny spokeswoman Debra A. Beck said at the time.

Allegheny moved its corporate headquarters from New York City to Downsville Pike in 1996.

While Ellinghaus' report mentions Pittsburgh, Allegheny has offices in nearby Monroeville, Pa., and Greensburg, Pa.

Allegheny's energy trading subsidiary, Allegheny Energy Supply Company, leases offices in Monroeville, east of Pittsburgh, according to Allegheny's annual report.

Allegheny has a corporate center in Greensburg, southeast of Pittsburgh, that is owned by West Penn Power Company, according to the annual report. West Penn is part of Allegheny's distribution company, Allegheny Power.

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