Fitch affirms Monongahela, West Penn

Fitch Ratings said it affirmed the BBB- issuer default ratings, BBB+ first mortgage bonds and BBB- senior unsecured debt of Allegheny Energy, Inc. subsidiaries Monongahela Power Co. and West Penn Power Co., as well as Monongahela's BB+ preferred securities.

The outlook on Monongahela was revised to stable from negative, and West Penn's outlook remains stable.

The agency said the revision in Monongahela's outlook reflects the West Virginia Public Service Commission order that the expenditures greater than the $450 million tariff bond securitization may be requested to be recovered in a future base rate proceeding and collected through construction work in progress starting as early as in 2009.

The ratings and stable outlook of West Penn reflect Fitch's expectation that West Penn's net revenue margin will improve when power purchase costs come into line with generation rates beginning in January 2009 and that West Penn will receive approval from the Pennsylvania PUC to begin procuring power in an auction process for 2011 POLR load requirements and to allow full recovery of power costs through customer tariffs.

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