Capon Valley Coalition

This financial view of Allegheny Power comes from BloggingStocks.com today.

Note the reference to the growing opposition to the TrAIL power line project, which I have highlighted.

Posted Jun 12th 2007 10:10AM by Victoria Erhart
Filed under: Earnings reports, Bad news, Press releases, Allegheny Energy (AYE)

Pennsylvania-based energy company Allegheny Energy, Inc. (NYSE: AYE) posted mixed results for 1Q 2007 earnings. On the positive side, retail sales of energy increased 5%, plant efficiency increased, operating revenues increased $2 million, and debt expense declined by $8.2 million.. On the negative side, coal costs were up by $13.5 million, wiping out all the gains in increased sales and plant efficiency. Retail market prices for energy were down further eroding the gain produced by increased sales volume. Net income for the quarter was down by $4.5 million to $109.7 million or $.65 EPS. EBITDA for 1Q 2007 was $312.6 million, a decrease of $9.5 million.

Now for the bad news. The West Virginia Public Service Commission just recently ordered Allegheny Energy to decrease rates by $132 million to 2 Allegheny Enengy subsidiaries, while allowing Allegheny Enegy to pass on a $126 million fuel charge to customers. Net loss to Allegheny Energy is an additional $6 million. This is, relatively speaking, not that big a deal for Allegheny Energy, which posts annual revenues in excess of $3 billion. But the company did get slapped around in public for being heavy-handed in trying to push more costs than allowed onto customers. Its long term growth prospects are not rosy. There is growing opposition to its new power line project in its transmission area in West Virginia, Pennsylania and Maryland. It’s P/E multiple, 27.63, is the highest among its competitors while its EPS, $1.87, is the lowest. Allegheny Energy suspended dividend payments in December 2002 and has yet to reinstitute them. None of its cost factors are going to change for the better in the immediate future. It is best to look elsewhere for utility stock investment possibilities. The stock recently closed at $51.81, down $1.10.

This is not much notice for a hearing that will take place TOMORROW, but it is the first acknowledgement by Gov. Joe Manchin that West Virginians might have an interest in what goes on in their state.

From his press office:

June 11, 2007

GOVERNOR ESTABLISHES IN-STATE LOCATIONS FOR WEST VIRGINIANS TO VIEW TRANSMISSION LINE HEARING

Contact: Matt Turner, 304-558-3848

CHARLESTON, W.Va. – The U.S. Department of Energy on Wednesday will conduct a public hearing in Pittsburgh about its draft National Interest Electric Transmission Corridor (NIETC).

The NIETC covers geographic areas where millions of consumers are affected by electric transmission capacity constraints and electric transmission lines may be proposed to alleviate that congestion. One of the DOE’s proposed corridors, the Mid-Atlantic Area National Corridor, is a contiguous area covering parts of West Virginia, Ohio, Pennsylvania, New York, Maryland, and Virginia, and all of New Jersey, Delaware, and Washington, D.C.

While not any of the DOE public hearings about the corridors are in West Virginia, Gov. Joe Manchin has established three in-state sites at which West Virginians unable to attend the meeting in person can observe the Pittsburgh meeting via live webcast. Viewers will be able to see PowerPoint presentations and hear audio of spe akers during the webcast.

Locations of the webcast are:
WEDNESDAY, JUNE 13, 2007 • 1 p.m. to 7 p.m.
• MORGANTOWN – Waterfront Place Hotel, Main Ballroom
• MOOREFIELD – Eastern West Virginia Community & Technical College, Room 154
• CHARLESTON – State Capitol Complex, Cultural Center Main Theater

Attendees at these locations who wish to submit comments to the DOE can provide them to Governor’s Office staff members who will submit them on their behalf for its consideration and inclusion as part of its record. Those who are unable to attend the meeting or view the webcast at the locations above may register and view the webcast at the DOE’s Web site, http://www.energetics.com/NIETCpublicmeetings/.