Allegheny Energy Completes $1.3 Billion Environmental Improvement Work at Major Power Plants

Allegheny Energy, Inc. (NYSE: AYE) announced the completion of a $1.3 billion program to improve the environmental performance at two of its largest power plants. With the recent tie-in of flue gas desulfurization (scrubber) equipment at its Fort Martin Power Station near Morgantown, W.Va., Allegheny now has scrubbers on all of its supercritical coal units.

The initiative, which included a similar project at its Hatfield’s Ferry facility south of Pittsburgh, will help Allegheny reduce its fleet-wide sulfur dioxide emissions by more than two-thirds from 2005 levels.

"These projects demonstrate our commitment to environmental stewardship,” said Paul Evanson, Chairman, President and Chief Executive Officer of Allegheny Energy. "With the Fort Martin project now complete, we have one of the cleanest coal-fired generation fleets in the country with regards to sulfur dioxide emissions.”

As part of the environmental initiative, Allegheny installed scrubbers at both the 1,107-megawatt Fort Martin facility and the 1,710-megawatt Hatfield’s Ferry plant. The company completed work at Hatfield’s Ferry in October. The scrubbers will remove approximately 95 percent of the sulfur dioxide emissions at both Fort Martin and Hatfield’s Ferry, totaling more than 200,000 tons annually from the two plants. Mercury emissions at the facilities also will drop significantly.

Work on the scrubber projects created hundreds of construction jobs over a nearly four-year period and resulted in additional full-time positions to operate and maintain the scrubber equipment. The projects also will enable Allegheny to continue purchasing local coal, preserving regional mining jobs.

Allegheny Energy

Headquartered in Greensburg, Pa., Allegheny Energy is an investor-owned electric utility with total annual revenues of over $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; capacity purchase commitments; regulatory matters; and accounting issues. 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: plant performance and unplanned outages; 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; 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 customer switching behavior and their resulting effects on existing and future load requirements; 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 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.