Allegheny awarded five contracts in this auction, representing approximately 1.8 million megawatt-hours (MWh) of generation supply, or six percent of the auction purchases authorized by the Commission for periods following the expiration of rate caps on December 31, 2010. The results of the auction were:

For residential customers:

One 17-month contract

One 29-month contract

Average weighted retail generation price: $65.29/MWh

For non-residential customers:

Three 17-month contracts

Average weighted retail generation price: $67.24/MWh

Included in the average weighted retail generation pricing cited above are energy, capacity, Pennsylvania gross receipts taxes, line losses, renewable energy requirements, ancillary services and other provisions. The contracts awarded today begin on January 1, 2011.

If the average prices of the remaining auctions were to be the same as the first three auctions combined, a typical Pennsylvania residential customer's bill in 2011 would increase $8.74, or 9.6 percent over 2010 levels, assuming usage of 1,000 kilowatt-hours (KWh) per month.

For small and medium non-residential customers, the typical increase in rates in 2011, assuming future auction prices were the same as existing results, would be 2.9 percent and 4.9 percent, respectively, over 2010 levels. Actual rates will not be available until all supply purchases have been completed and prices are averaged together.

"By purchasing power at these attractive prices, we're easing our customers' transition to market-based rates," said Paul J. Evanson, Chairman, President and Chief Executive Officer of Allegheny Energy. "We now have contracts for about 60 percent of the electricity supply we need to serve our Pennsylvania residential customers in 2011, when the existing cap on generation rates expires."

In auctions held to date, the percentage of generation supply purchased on behalf of small and medium non-residential customers for 2011 is 24 percent and 22 percent, respectively.

The winning suppliers were selected from among six competitive bidders. An independent monitoring firm, Boston Pacific Company, Inc., oversaw the process for Allegheny Power. Five more auctions are scheduled: three in 2010 and two in 2012. The multiple auctions are designed to shield customers against overexposure to market conditions at any single point in time.

Allegheny has a Commission-approved plan in place to protect customers from the possibility of significant rate increases immediately following the expiration of rate caps. For more information on the company's rate mitigation plan, visit the company's Web site at www.alleghenypower.com, click on the Watt Watchers icon and visit the Pennsylvania section.

Allegheny Power's Watt Watchers program offers information and programs to help its customers manage their electricity bills and use energy more efficiently.