GREENSBURG, Pa.--(BUSINESS WIRE)--Allegheny Power, the electric delivery business of Allegheny Energy, Inc. (NYSE: AYE), is seeking approval from the West Virginia Public Service Commission to use securitized financing to fund the remaining portion of its flue gas desulfurization (scrubber) project at the Fort Martin Power Station.
The securitization, if approved, would involve issuing approximately $105 million of environmental control bonds with a term of up to 10 years. The bonds would be repaid using funds collected from West Virginia customers through an adjustment to the current Environmental Control Charge.
“This approach should save customers more than $40 million compared to traditional ratemaking,” stated Paul J. Evanson, Chairman, President and Chief Executive Officer of Allegheny Energy.
The proposed securitization would increase the bill of a typical customer using 1,000 kilowatt-hours of electricity per month by $1.21, or 1.5 percent. Even with this requested increase, Allegheny Power’s monthly charges for a typical residential customer would be about $84.50, well below the national average of $112.
The total construction cost for the Fort Martin scrubber project is approximately $550 million. In a January 2007 order, the commission authorized Allegheny to securitize up to $450 million of the scrubber costs, plus certain related financing costs.
The scrubbers, scheduled for completion later this year, will remove more than 90 percent of sulfur dioxide and significantly reduce mercury emissions from the facility. The project has created more than 350 construction jobs in the past two years, and it will allow Allegheny to use more West Virginia coal when completed. Fort Martin Power Station is located near Morgantown, W.Va.
Thursday, July 2, 2009
Allegheny Energy Seeks Financing Approval for Environmental Improvement Project
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