Allegheny Energy’s $323 million acquisition of West Virginia-basedMountaineer Gas Co. (MGC) was completed on schedule thisweek. Allegheny Energy assumed the responsibility of Mountaineer GasCo.’s 11.7 Bcf of gas storage and 200,000 natural gas customers alongwith the company’s ownership rights from Energy Corp. of America (seeDaily GPI, Aug. 15).

The deal, which was announced last December, is expected to beimmediately accretive to earnings during the first full year (seeDaily GPI, Dec. 21, 1999). MGC’s serviceterritory is adjacent to Allegheny’s service territory, which in turnadjoins with Allegheny’s previous acquisition in WestVirginia. Allegheny purchased UtiliCorp United’s West Virginia Powerdivision for $75 million, adding 26,000 electric distributioncustomers and 24,000 natural gas customers.

“This addition of Mountaineer Gas Company to the AlleghenyEnergy family is another step in our strategy of diversifying ourenergy business by adding more natural gas to our fuel portfolio,”said Alan J. Noia, CEO of Allegheny Energy. “It further advancesour delivery company’s strategy of growing through acquisitions andbroadening its reach.”

Included in the deal is MGC’s subsidiary Mountaineer GasServices. The subsidiary operates gas producing properties,gathering facilities, and intrastate transmission pipelines,including about 375 wells within the Appalachian region. AlleghenyPower’s President Jay S. Pifer will manage MGC out of Charleston,WV. Including this purchase, the company serves 31,000 square milesand 1.6 million customers.

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