Allegheny Energy subsidiary to construct $400-million power plant in Indiana

HAGERSTOWN, Md., Jan. 5, 2001 (BUSINESS WIRE) à‚– Allegheny Energy, Inc. (NYSE: AYE), announced today that its unregulated generation subsidiary, Allegheny Energy Supply Company, LLC, plans to construct a 630-megawatt (MW) natural gas-fired merchant generating facility in St. Joseph County, Ind., approximately 10 miles west of South Bend.

The $400-million facility will give the Allegheny Energy system nearly 13,000 MW of total generating capacity and marks another step forward in a corporate strategy that includes becoming a national energy supplier.

“Allegheny Energy is delighted to announce the construction of a combined-cycle generating facility in northern Indiana,” said Alan J. Noia, Chairman, President, and Chief Executive Officer of Allegheny Energy. “This facility will add to our Midwest generating capacity and further demonstrates our significant progress toward the goal of becoming a national energy supplier. This fits with our long-term corporate strategy and will be a positive benefit for our Company and our shareholders.”

Construction on the combustion turbine facility will begin in 2002 and is expected to be completed in two stages. Two 44-MW simple-cycle combustion turbines will be constructed first, followed by the addition of 542 MW of combined-cycle capacity in 2005.

When completed, the facility will allow Allegheny Energy Supply to sell additional generation into the East Central Area Reliability Region, as well as give the Company greater access to other markets.

“This facility will allow Allegheny Energy Supply to provide peaking generation in times of high electrical demand initially and will then be expanded to include base-load generation to help meet the growing demands for electricity in the region,” said Noia.

Steve Hora, President of the Town Council in New Carlisle, Ind., located near the project site, applauded Allegheny Energy Supply’s announcement.

“The Town of New Carlisle is delighted that Allegheny Energy Supply has selected an industrial development zone near our community for its new generating facility,” said Hora. “Developments such as this fuel progress in communities and New Carlisle is happy to play a role in the forward movement of the energy industry. We look forward to a long and cooperative working relationship with Allegheny Energy Supply.”

Allegheny Energy Supply has also announced construction of 1,080-MW natural gas-fired combined-cycle facility in La Paz County, Ariz., and another 540-MW generating facility in Springdale, Pa. Five 44-MW simple-cycle combustion turbines have already gone into service throughout Pennsylvania, and two more 44-MW units have been announced. In November, Allegheny Energy announced plans to acquire three of Enron’s Midwest generating facilities with 1,710 MW of natural gas-fired capacity. The three facilities are located in Illinois, Indiana, and Tennessee.

An S&P 500 company, Allegheny Energy, Inc. is a diversified energy company headquartered in Hagerstown, Md. The Allegheny Energy family includes Allegheny Energy Supply Company, LLC, which operates and markets competitive retail and wholesale electric generation and operates regulated electric generation for its affiliates; Allegheny Power, which delivers electric energy and natural gas to three million people in parts of Maryland, Ohio, Pennsylvania, Virginia, and West Virginia; and Allegheny Ventures, which actively invests in and develops telecommunications and energy-related projects. For more information, check our web site at www.alleghenyenergy.com.

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