Allegheny Energy, Inc. (NYSE: AYE) today announced an updated coal purchase agreement with an affiliate of Alliance Resource Partners, L.P. (NASDAQ: ARLP) and a modified agreement to lease Allegheny Energy’s Buffalo Creek coal reserves in southwestern Pennsylvania.
The original agreement with Alliance was announced in December 2005. The agreements announced today will provide Allegheny with improved coal supply security, and will give Alliance additional flexibility.
The updated coal purchase agreement will provide Allegheny with a total of approximately 20 million tons of coal through 2020. Deliveries are scheduled to begin in 2010 and reach two million tons per year in 2011. Alliance may provide the coal from various sources, including reserves owned or controlled by Alliance in Northern Appalachia and the Illinois Basin.
Under the modified lease agreement, Alliance will continue to lease the coal reserves from Allegheny in southwestern Pennsylvania while seeking the permits necessary to mine the coal. Allegheny would receive royalty payments from any production of its reserves.
Allegheny Energy
Headquartered in Greensburg, Pa., Allegheny Energy is an investor-owned utility with total annual revenues exceeding $3 billion and more than 4,000 employees. The company owns and operates generating facilities and delivers low-cost, reliable electric service to 1.6 million customers in Pennsylvania, West Virginia, Maryland and Virginia. For more information, visit our Web site at www.alleghenyenergy.com.
Forward-Looking Statements
In addition to historical information, this release contains a number of "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Words such as anticipate, expect, project, intend, plan, believe, and words and terms of similar substance used in connection with any discussion of future plans, actions, or events identify forward-looking statements. These include statements with respect to: rate regulation and the status of retail generation service supply competition in states served by Allegheny Energy’s distribution business, Allegheny Power; financing plans; demand for energy and the cost and availability of raw materials, including coal; provider-of-last-resort and power supply contracts; results of litigation; results of operations; internal controls and procedures; capital expenditures; status and condition of plants and equipment; regulatory matters; and asset sales or transfers. Forward-looking statements involve estimates, expectations and projections and, as a result, are subject to risks and uncertainties. There can be no assurance that actual results will not materially differ from expectations. Actual results have varied materially and unpredictably from past expectations. Factors that could cause actual results to differ materially include, among others, the following: changes in the price of power and fuel for electric generation; general economic and business conditions; changes in access to capital markets; complications or other factors that render it difficult or impossible to obtain necessary lender consents or regulatory authorizations on a timely basis; environmental regulations; any failure to consummate, or delay in the consummation of, any contemplated asset sales or transfers; the results of regulatory proceedings, including proceedings related to rates; changes in industry capacity, development and other activities by Allegheny Energy’s competitors; changes in the weather and other natural phenomena; changes in the underlying inputs and assumptions, including market conditions used to estimate the fair values of commodity contracts; changes in laws and regulations applicable to Allegheny Energy, its markets or its activities; the loss of any significant customers or suppliers; dependence on other electric transmission and gas transportation systems and their constraints or availability; changes in PJM, including changes to participant rules and tariffs; the effect of accounting policies issued periodically by accounting standard-setting bodies and accounting issues facing our company; and the continuing effects of global instability, terrorism and war. Additional risks and uncertainties are identified and discussed in Allegheny Energy’s reports filed with the Securities and Exchange Commission.
Contacts:
Media contact:
David
Neurohr, Director, External Communications
Phone: 724-838-6020
Media
Hotline: 888-233-3583
E-mail: dneuroh@alleghenyenergy.com
or
Investor
contact:
Max Kuniansky, Executive Director, Investor Relations
and
Corporate Communications
Phone: 724-838-6895
E-mail: mkunian@alleghenyenergy.com
