HAGERSTOWN, Md., Aug. 21, 2003 — Allegheny Energy Inc.’s subsidiary, Allegheny Energy Supply Co., LLC, has signed an agreement to terminate its 222-MW tolling agreement with Las Vegas Cogeneration II, a unit of Black Hills Corp.
Paul J. Evanson, Chairman, President, and Chief Executive Officer of Allegheny Energy, said, “With the signing of this agreement, we have substantially achieved our goal of exiting the Western energy markets, thereby significantly reducing our financial exposure to energy trading. We can now refocus fully on optimizing our core generation assets.”
Under this agreement, Allegheny will make a $114-million payment to Las Vegas Cogeneration II after closing the previously announced sale of its long-term energy supply contract with the California Department of Water Resources (CDWR) and obtaining the consent of a majority of its lenders. Allegheny’s payments under the tolling agreement will continue until the tolling agreement is terminated upon payment of the $114 million.
Allegheny Energy Supply entered into the 15-year tolling agreement with Las Vegas Cogeneration II in May 2001. The 222-MW natural gas-fired generating facility went into commercial service in January 2003.
With headquarters in Hagerstown, Md., Allegheny Energy is an integrated energy company with a balanced portfolio of businesses, including Allegheny Energy Supply, which owns and operates electric generating facilities and supplies energy and energy-related commodities, and Allegheny Power, which delivers low-cost, reliable electric and natural gas service to about three million people in Maryland, Ohio, Pennsylvania, Virginia, and West Virginia. More information about the Company is available at www.alleghenyenergy.com.