Allegheny Energy (AYE) 8-K Allegheny Energy Reports First Quarter 2008 Results

Exhibit 99.1

NEWS RELEASE

800 Cabin Hill Drive, Greensburg, PA 15601-1650

Media contact:	Investor contact:
David Neurohr Director, External Communications Phone: (724) 838-6020 Media Hotline: 1-888-233-3583 E-mail: dneuroh@alleghenyenergy.com	Max Kuniansky Executive Director, Investor Relations and Corporate Communications Phone: (724) 838-6895 E-mail: mkunian@alleghenyenergy.com

FOR IMMEDIATE RELEASE

Allegheny Energy Reports First Quarter 2008 Results

GREENSBURG, Pa., April 30, 2008— Allegheny Energy, Inc.(NYSE: AYE)today reported financial results for the first quarter of 2008.

Three Months Ended March 31

	2008		2007		Increase
Consolidated Results: GAAP
— Net Income ($millions)	$	136.1	$	109.7	$	26.4
— Earnings Per Share		0.80		0.65		0.15

“Higher generation rates, increased market prices and lower income taxes were key contributors to our improved financial results for the quarter,” said Paul J. Evanson, Chairman, President and Chief Executive Officer of Allegheny Energy. “We remain well-positioned to deliver strong earnings growth for the full year 2008 and beyond. Securing approvals for transmission expansion and resolving our Virginia regulatory issues remain top near-term priorities.”

First Quarter Consolidated Results

Net income for the first quarter of 2008 increased by $26.4 million compared with the same period in 2007. Key factors contributing to the results include:

• Operating revenues increased by $27.4 million, reflecting higher generation rates in Pennsylvania, increased market prices and revenue from transmission expansion projects and capacity auctions, partially offset by lower generation output.

• Fuel expense increased by $17.6 million, largely due to higher coal costs.

• Deferred energy costs reduced operating expenses by $9.0 million, primarily reflecting West Virginia fuel and energy costs which will be recovered in rates.

• Operations and maintenance expense increased by $8.2 million, primarily due to the timing of special power plant maintenance costs, additional service restoration work resulting from severe weather and increased spending to enhance reliability in the delivery business.

• Income taxes decreased by $13.1 million, largely due to a lower effective tax rate reflecting favorable tax settlements and West Virginia tax law changes.

EBITDA for the first quarter of 2008 was $323.1 million, an increase of $10.5 million compared to the same quarter of the prior year. EBITDA is a non-GAAP financial measure. Details on the calculation of EBITDA and a reconciliation of EBITDA to net income are attached to this release.

First Quarter Segment Results

Three Months Ended March 31
($ millions)

					Increase
	2008		2007		(Decrease)
Net Income: GAAP
— Generation and Marketing	$	102.4	$	64.3	$	38.1
— Delivery and Services		33.7		45.4		(11.7	)

Generation and Marketing: Net income for the quarter increased by $38.1 million compared to the same period a year earlier. Key factors contributing to the improved earnings were higher market prices for power, including hedges and marketing contracts, higher generation rates in Pennsylvania, fuel cost recovery in West Virginia, and West Virginia tax law changes. These benefits were partially offset by a decrease in generation output and higher coal costs.

Delivery and Services: Net income for the quarter decreased by $11.7 million compared to the same quarter of the prior year. Key factors contributing to the decreased earnings were higher costs for purchasing power to serve Virginia customers and decreased rates in West Virginia, partially offset by revenues from transmission expansion projects, the expiration of a customer credit in Maryland, and favorable tax settlements.

Reconciliation of Non-GAAP Financial Measures

This news release includes a presentation of EBITDA as an additional measure of our operating performance, which is a non-GAAP financial measure as defined in the Securities and Exchange Commission’s Regulation G.

Management believes that presenting EBITDA provides investors with a more complete understanding of the core results and underlying trends from which to consider past performance and prospects for the future. EBITDA should not be considered in isolation or viewed as a substitute for, or superior to, net income or other data prepared in accordance with GAAP as a measure of our operating performance or liquidity. In addition, EBITDA is not necessarily comparable to similarly titled measures provided by other companies.

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Pursuant to the requirements of Regulation G, we have attached a table that reconciles EBITDA to the most directly comparable GAAP measures.

Investor Conference Call

Allegheny Energy will discuss these results in a live Internet broadcast at 8:30 a.m. Eastern Daylight Time on Thursday, May 1, 2008. To listen to the broadcast, visit www.alleghenyenergy.com. A taped replay will be available after the live broadcast.

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 may contain 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; and regulatory matters. 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 and actions of rating agencies; 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; inflationary and interest rate trends changes in market rules, including changes to PJM participant rules and tariffs; the effect of accounting pronouncements issued periodically by accounting standard-setting bodies and accounting issues facing our organization; 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.

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ALLEGHENY ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)

	Three Months Ended
	March 31,
(In thousands, except per share amounts)	2008			2007
Operating revenues	$	875,026		$	847,625
Operating expenses:
Fuel		249,826			232,225
Purchased power and transmission		97,380			93,266
Deferred energy costs, net		(10,454	)		(1,455	)
Operations and maintenance		168,700			160,544
Depreciation and amortization		70,289			71,981
Taxes other than income taxes		52,439			55,890
Total operating expenses		628,180			612,451
Operating income		246,846			235,174
Other income and expenses, net		6,209			5,862
Interest expense and preferred dividends of subsidiary		58,431			59,529
Income before income taxes and minority interest		194,624			181,507
Income tax expense		58,293			71,378
Minority interest in net income of subsidiaries		206			387
Net income	$	136,125		$	109,742
Common share data:
Weighted average common shares outstanding:
Basic		167,560			165,494
Diluted		169,950			169,181
Basic income per common share	$	0.81		$	0.66
Diluted income per common share	$	0.80		$	0.65

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ALLEGHENY ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)

	March 31,			December 31,
(In thousands)	2008			2007
ASSETS
Current Assets:
Cash and cash equivalents	$	89,715		$	258,750
Accounts receivable:
Customer		234,347			195,545
Unbilled utility revenue		87,808			110,569
Wholesale and other		92,693			57,626
Allowance for uncollectible accounts		(15,132	)		(14,252	)
Materials and supplies		104,353			103,075
Fuel		78,783			72,506
Deferred income taxes		223,194			286,440
Prepaid taxes		83,152			48,343
Collateral deposits `		44,609			59,527
Derivative assets		5,266			29
Restricted funds		29,553			47,501
Regulatory assets		78,408			73,299
Other		63,936			16,001
Total current assets		1,200,685			1,314,959
Property, Plant and Equipment, Net:
Generation		6,028,017			5,992,919
Transmission		1,133,197			1,126,657
Distribution		3,808,384			3,761,438
Other		463,304			452,525
Accumulated depreciation		(4,837,615	)		(4,795,925	)
Subtotal		6,595,287			6,537,614
Construction work in progress		792,722			658,966
Total property, plant and equipment, net		7,388,009			7,196,580
Investments and Other Assets:
Restricted funds — Fort Martin scrubber project.		302,574			347,023
Goodwill		367,287			367,287
Investments in unconsolidated affiliates		27,811			27,875
Other		17,552			15,974
Total investments and other assets		715,224			758,159
Deferred Charges:
Regulatory assets		559,042			601,603
Other		57,519			35,288
Total deferred charges		616,561			636,891
Total Assets	$	9,920,479		$	9,906,589

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ALLEGHENY ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
(unaudited)

	March 31,			December 31,
(In thousands, except share amounts)	2008			2007
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-term debt	$	10,000		$	10,000
Long-term debt due within one year		89,561			95,367
Accounts payable		296,731			380,688
Accrued taxes		70,100			83,580
Derivative liabilities		76,862			14,117
Accrued interest		63,339			65,583
Security deposits		39,939			38,976
Other		150,826			99,192
Total current liabilities		797,358			787,503
Long-term Debt		3,917,135			3,943,947
Deferred Credits and Other Liabilities:
Derivative liabilities		21,391			12,815
Income taxes payable		70,007			68,050
Investment tax credit		68,540			69,353
Deferred income taxes		1,299,490			1,345,953
Obligations under capital leases		44,409			38,765
Regulatory liabilities		505,375			488,393
Adverse power purchase commitment		145,433			149,799
Other		429,285			453,418
Total deferred credits and other liabilities		2,583,930			2,626,546
Minority Interest		3,279			13,241
Common Stockholders’ Equity:
Common stock—$1.25 par value per share, 260 million shares authorized and 167,896,292 and 167,273,069 shares issued at March 31, 2008 and December 31, 2007, respectively		209,870			209,091
Other paid-in capital		1,934,346			1,924,072
Retained earnings		555,065			444,177
Treasury stock at cost—49,493 shares		(1,756	)		(1,756	)
Accumulated other comprehensive loss		(78,748	)		(40,232	)
Total common stockholders’ equity		2,618,777			2,535,352
Total Liabilities and Stockholders’ Equity	$	9,920,479		$	9,906,589

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ALLEGHENY ENERGY, INC.
RESULTS OF OPERATIONS

Income Summary

	Three months ended March 31, 2008
	Delivery		Generation
	and		and
(In millions)	Services		Marketing			Eliminations			Total
Operating revenues	$	774.5	$	568.2		$	(467.7	)	$	875.0
Fuel		—		249.8			—			249.8
Purchased power and transmission		535.5		27.5			(465.6	)		97.4
Deferred energy costs, net		3.1		(13.6	)		—			(10.5	)
Operations and maintenance		91.9		78.9			(2.1	)		168.7
Depreciation and amortization		42.7		27.6			—			70.3
Taxes other than income taxes		36.1		16.4			—			52.5
Total operating expenses		709.3		386.6			(467.7	)		628.2
Operating income		65.2		181.6			—			246.8
Other income and expenses, net		3.4		4.2			(1.4	)		6.2
Interest expense		21.9		37.9			(1.4	)		58.4
Income before income taxes and minority interest		46.7		147.9			—			194.6
Income tax expense		12.8		45.5			—			58.3
Minority interest in net income of subsidiaries		0.2		—			—			0.2
Net income	$	33.7	$	102.4		$	—		$	136.1

	Three months ended March 31, 2007
	Delivery			Generation
	and			and
(In millions)	Services			Marketing		Eliminations			Total
Operating revenues	$	757.9		$	524.5	$	(434.8	)	$	847.6
Fuel		—			232.2		—			232.2
Purchased power and transmission		500.8			24.2		(431.7	)		93.3
Deferred energy costs, net		(1.5	)		—		—			(1.5	)
Operations and maintenance		86.3			77.3		(3.1	)		160.5
Depreciation and amortization		40.2			31.8		—			72.0
Taxes other than income taxes		35.5			20.4		—			55.9
Total operating expenses		661.3			385.9		(434.8	)		612.4
Operating income		96.6			138.6		—			235.2
Other income and expenses, net		3.0			4.1		(1.2	)		5.9
Interest expense and preferred dividends		18.7			42.1		(1.2	)		59.6
Income before income taxes and minority interest		80.9			100.6		—			181.5
Income tax expense		35.5			35.9		—			71.4
Minority interest in net income of subsidiaries		—			0.4		—			0.4
Net income	$	45.4		$	64.3	$	—		$	109.7

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
CONSOLIDATED DATA FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(in millions, except per share data)
(unaudited)

	INCOME BEFORE
	INCOME TAXES AND				DILUTED INCOME
THREE MONTHS ENDED MARCH 31, 2008	MINORITY INTEREST		NET INCOME		PER SHARE
Calculation of Adjusted Income:
Income — GAAP Basis	$	194.6	$	136.1	$	0.80
Adjustments:
No adjustments		—		—
Adjusted Income	$	194.6	$	136.1	$	0.80
Calculation of Adjusted EBITDA:
Net Income — GAAP basis			$	136.1
Interest expense				58.4
Income tax expense				58.3
Depreciation and amortization				70.3
EBITDA				323.1
No adjustments				—
Adjusted EBITDA			$	323.1

	INCOME BEFORE
	INCOME TAXES AND					DILUTED INCOME
THREE MONTHS ENDED MARCH 31, 2007	MINORITY INTEREST			NET INCOME		PER SHARE
Calculation of Adjusted Income:
Income — GAAP Basis	$	181.5		$	109.7	$	0.65
Adjustments:
No adjustments		—			—
Adjusted Income	$	181.5		$	109.7	$	0.65
Calculation of Adjusted EBITDA:
Net Income — GAAP basis				$	109.7
Interest expense			��		59.5
Income tax expense					71.4
Depreciation and amortization					72.0
EBITDA					312.6
No adjustments					—
Adjusted EBITDA				$	312.6

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ALLEGHENY ENERGY, INC. AND SUBSIDIARIES
OPERATING STATISTICS
(unaudited)
Three Months Ended March 31,

	2008			2007			Change
DELIVERY AND SERVICES:
Retail electricity sales (thousand MWh)		11,796			11,712			0.7	%
Usage per customer (KWh):
Residential		3,719			3,739			-0.5	%
Commercial		15,004			15,106			-0.7	%
Industrial		146,963			146,134			0.6	%
GENERATION AND MARKETING:
Total generation (thousand MWh):
Supercritical coal		10,363			10,748			-3.6	%
Other coal		1,623			1,753			-7.4	%
Gas		47			91			-48.4	%
Hydro and other		508			500			1.6	%
Total		12,541			13,092			-4.2	%
Net capacity factor:
Supercritical coal		78	%		82	%		-4	%
All coal		73	%		77	%		-4	%
Equivalent availability factor:
Supercritical coal		89	%		90	%		-1	%
All coal		88	%		89	%		-1	%
DEGREE DAYS:
Heating		2,714			2,744			-1.1	%
Cooling		0			2		NM*

* Not meaningful

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