FirstEnergy and Allegheny Energy merger gets final approval

February 24, 2011|By HEATHER KEELS |

FirstEnergy and Allegheny Energy received the final regulatory approval needed for their long-awaited merger Thursday when the Pennsylvania Public Utility Commission approved the deal.

"We are pleased that the Pennsylvania Commission has approved our merger," said Anthony J. Alexander, president and chief executive officer of FirstEnergy, in a joint news release issued by the companies. "We are reviewing the Commission's decision and plan to close the transaction in a timely fashion."

FirstEnergy spokeswoman Ellen Raines said the merger could happen as early as Friday.

The merger is expected to improve the diversity of power generation, lead to modest rate credits for Allegheny's customers and allow for more backup for repairs after major outages, officials with the two utility companies have said.

Customers in Maryland will be billed under the name Potomac Edison after the merger.

The company must first complete its review of the Pennsylvania approval and submit signed articles of merger in Maryland, Raines said.

"We look forward to building on our collective strengths to create a premier energy company," Paul J. Evanson, Allegheny Energy chairman, president and CEO, said in the release.

FirstEnergy, based in Akron, Ohio, announced in February 2010 that it would buy rival Allegheny Energy for about $4.7 billion in stock. The deal would create one of the nation's largest power companies, with customers from Ohio to New York.

Together, the companies will include 10 electric distribution utilities serving 6 million customers, approximately 24,000 megawatts of generating capacity and 67,000 square miles of service territory, the release said.

They will have $48 billion in assets and $16 billion in annual revenues, the release said.

The merger previously cleared U.S. Department of Justice review and was approved by the Federal Energy Regulatory Commission, the West Virginia Public Service Commission and the Virginia State Corporation Commission and shareholders for both companies.

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