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Allegheny Energy to shift HQ

move will mark end of an era

April 23, 2004

Three short years ago, Allegheny Energy was flying high. so high, in fact, that a national publication selected Allegheny President Alan Noia as CEO of the Year" for his work in transforming the company into a "national energy merchant."

But by September 2002, the slide had begun. The president of Allegheny's energy-trading division was fired for violating internal conflict-of-interest rules. The stock fell 7.8 percent.

Later that month, Allegheny and Merrill Lynch & Co. sued each other over Allegheny's purchase of Merrill's company, Global Energy Markets.

By October 2002, Moody's Investors Services had downgraded Allegheny's debt rating to "junk bond" status. Stock prices fell again, even though the firm had promised to ax 600 jobs in a cost-cutting move.

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In November, the bond rating was lowered again and Allegheny delayed its third-quarter earning report, with spokesmen saying that errors were found in its financial statements.

Last year brought the retirement of Noia, who had made Hagerstown Allegheny's headquarters. Now, his successor has decided it will move the headquarters to Greensburg, Pa.

The move will end a local tradition that began in 1923, when the Potomac Public Service Co. bought the Cumberland Edison Electric Illuminating Co., and changed its name to Potomac Edison.

PE eventually grew to employ more than 1,000 workers and provided power to more than 350,000 customers in several states.

In addition to providing a wealth of well-paying jobs to local residents, the firm was also a good corporate citizen. Its employees served on a wide variety of nonprofit organizations' boards, including everything from the United Way appeal to Kids Voting, an attempt to encourage higher voter turnout.

Those who have lost jobs and money on the firm's stock will no doubt remember those unhappy events. But we hope they and the community will also remember the positive contributions the company made for many years to the local economy and to the community's quality of life.

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