West Penn Power Company Announces Results of Default Service Auction

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Jan 27, 2012, 02:41 ET

GREENSBURG, Pa., Jan. 27, 2012 /PRNewswire/ -- West Penn Power Company, a subsidiary of FirstEnergy Corp. (NYSE: FE), announced today that the Pennsylvania Public Utility Commission (PUC) has approved the results of the company's seventh default service auction. The auction, held on January 16, 2012, was to purchase power for West Penn's customers from June 2012 through May 2013.

Results of the previous six auctions under West Penn's default service plan were approved by the PUC on April 17, 2009; June 5, 2009; October 16, 2009; January 22, 2010; May 21, 2010 and October 22, 2010.

The January 16 auction procured generation supply for West Penn's residential customers and commercial and industrial (C&I) customers with peak demands up to 500 kilowatts (kW) who choose not to shop with alternative suppliers. The results of the auction were approved by the PUC on January 20, 2012.

The table below shows the number and size of tranches procured of each product as well as the final weighted average auction prices.

West Penn Default Service Auction Results
12-Month Products for Residential and Commercial & Industrial Customers
with demands up to 500 kW
(Contract Term - June 1, 2012 through May 31, 2013)

	Residential	C&I (<100kW)	C&I (100kW – 500kW)
Bid Blocks Procured	8	4	4
Bid Block Size	3.33%	8.00%	11.0%
Weighted Average Price ($/MWh)	$38.56	$38.74	$39.78

The prices have not been adjusted for gross receipt taxes, procurement-related administrative costs, or line losses. The price represents the weighted average of all winning bids from the January 16 auction and is representative of what is paid to the winning default service suppliers for their share of the hourly full requirements supply for the respective customer class, as measured at the generation level and settled by PJM.

Full requirements service means all necessary energy, capacity, transmission other than Network Integration Transmission Service, ancillary services, Pennsylvania Alternative Energy Portfolio Standard (AEPS) requirements, transmission and distribution losses, congestion management costs, and such other services or products that are required to supply the specified percentage of default service.

For more information on West Penn's default service auction process and rules, please see the auction website at:
https://www.firstenergycorp.com/content/fecorp/upp/pa/westpennpower/power_procurements/RFP.html .

FirstEnergy is a diversified energy company dedicated to safety, reliability and operational excellence. Its 10 electric distribution companies comprise the nation's largest investor-owned electric system. Its diverse generating fleet features non-emitting nuclear, scrubbed baseload coal, natural gas, and pumped-storage hydro and other renewables, and has a total generating capacity of nearly 23,000 megawatts.

Forward-Looking Statements: This news release includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements include declarations regarding management's intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms "anticipate," "potential," "expect," "believe," "estimate" and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual results may differ materially due to: the speed and nature of increased competition in the electric utility industry, the impact of the regulatory process on the pending matters in the various states in which we do business including, but not limited to, matters related to rates, the status of the PATH project in light of PJM Interconnection, L.L.C.'s (PJM) direction to suspend work on the project pending review of its planning process, its re-evaluation of the need for the project and the uncertainty of the timing and amounts of any related capital expenditures, business and regulatory impacts from ATSI's realignment into PJM, economic or weather conditions affecting future sales and margins, changes in markets for energy services, changing energy and commodity market prices and availability, financial derivative reforms that could increase our liquidity needs and collateral costs, the continued ability of FirstEnergy's regulated utilities to collect transition and other costs, operation and maintenance costs being higher than anticipated, other legislative and regulatory changes, and revised environmental requirements, including possible GHG emission, water intake and coal combustion residual regulations, the potential impacts of any laws, rules or regulations that ultimately replace the Clean Air Interstate Rule (CAIR) including the Cross-State Air Pollution Rule (CSAPR) and the effects of the EPA's recently released Mercury and Air Toxics Standards (MATS) rules to establish emission standards and other emission standards for electric generating units, the uncertainty of the timing and amounts of the capital expenditures that may arise in connection with any NSR litigation or potential regulatory initiatives or rulemakings (including that such expenditures could result in our decision to shut down or idle certain generating units), adverse regulatory or legal decisions and outcomes with respect to our nuclear operations (including, but not limited to, the revocation or non-renewal of necessary licenses, approvals or operating permits by the NRC, including as a result of the incident at Japan's Fukushima Daiichi Nuclear Plant), issues that could result from our continuing investigation and analysis of the indications of cracking in the plant shield building at Davis-Besse, adverse legal decisions and outcomes related to Met-Ed's and Penelec's ability to recover certain transmission costs through their transmission service charge riders, the continuing availability of generating units and changes in their ability to operate at or near full capacity, replacement power costs being higher than anticipated or inadequately hedged, the ability to comply with applicable state and federal reliability standards and energy efficiency mandates, changes in customers' demand for power, including but not limited to, changes resulting from the implementation of state and federal energy efficiency mandates, the ability to accomplish or realize anticipated benefits from strategic goals and our ability to improve electric commodity margins and the impact of, among other factors, the increased cost of coal and coal transportation on such margins, the ability to experience growth in the distribution business, the changing market conditions that could affect the value of assets held in FirstEnergy's nuclear decommissioning trusts, pension trusts and other trust funds, and cause FirstEnergy to make additional contributions sooner, or in amounts that are larger than currently anticipated, the ability to access the public securities and other capital and credit markets in accordance with FirstEnergy's financing plan, the cost of such capital and overall condition of the capital and credit markets affecting FirstEnergy and its subsidiaries, changes in general economic conditions affecting FirstEnergy and its subsidiaries, interest rates and any actions taken by credit rating agencies that could negatively affect FirstEnergy's and its subsidiaries' access to financing or their costs and increase requirements to post additional collateral to support outstanding commodity positions, LOCs and other financial guarantees, the continuing uncertainty of the national and regional economy and its impact on the major industrial and commercial customers of FirstEnergy's subsidiaries, issues concerning the soundness of financial institutions and counterparties with which FirstEnergy and its subsidiaries do business, issues arising from the completed merger of FirstEnergy and Allegheny Energy, Inc. and the ongoing coordination of their combined operations including FirstEnergy's ability to maintain relationships with customers, employees or suppliers, as well as the ability to continue to successfully integrate the businesses and realize cost savings and any other synergies and the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect, the risks and other factors discussed from time to time in FirstEnergy's and its applicable subsidiaries' SEC filings, and other similar factors. The foregoing review of factors should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on FirstEnergy's business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. FirstEnergy expressly disclaims any current intention to update, except as required by law, any forward-looking statements contained herein as a result of new information, future events or otherwise.

SOURCE FirstEnergy Corp.