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Allegheny Power sets rates 38 per cent up

7 July 2004 – Allegheny Power, a major provider of utilities in Western Maryland, yesterday announced the cost of electricity will rise more than 38 per cent for most of its 25 000 commercial and industrial users after rate caps expire at the end of December.

Mid-size companies can expect to pay about 50 per cent more for electricity from Allegheny. Residential rate caps remain in effect through 2008.

The restructured rates will be 74 per cent higher for Allegheny’s largest customers, but neither of the two that qualify in size for this increase will actually experience it because they have contracts in place through 2005, according to Allen Staggers, manager of communications for the Greensburg, Pa.-based company.

The company’s announcement came the same day it filed an application with the Securities and Exchange Commission to issue up to 4.5m shares of common stock to settle stock units issued to employees.

Those caps expired on June 30 for the state’s two largest utilities, Baltimore Gas and Electric Co. and Potomac Electric Power Co., which owns Conectiv. For Pepco, rate caps also expired for residential customers.

Both companies announced price increases in late April that took effect yesterday. Pepco’s rates for supplying electricity yesterday rose about 26 per cent for small business and residential customers. BGE’s rates increased 30.9 per cent for most of its small business customers, and 38 per cent for medium-sized businesses. Power prices remain frozen for BGE residential customers until July 2006.

As with BGE and Pepco, Allegheny customers can shop around for an alternate provider. While he cannot say precisely how many the state has licensed, Odogwu Obi Linton, acting manager of the Office of External Relations at the Maryland Public Service Commission, said applications for supplier licenses have increased since BGE and Pepco announced their rates in April.

At least ten of these suppliers are viable, compared with only three or four a couple of years ago, said Schroeder.

About nine alternative suppliers are registered in Allegheny’s territory, according to Staggers.

The significant movement of aggregation that has swept the BGE and Pepco service areas has not yet reached Western Maryland, Schroeder said.