Allegheny Energy (AYE) 10-Q 9 Nov 09 2009 Q3 Quarterly report Financial data

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Millions, except Per Share data	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Operating revenues	793.7	849.6	2565.7	2678.1
Operating expenses:
Fuel	188	299.2	663.8	794.2
Purchased power and transmission	134.2	108.1	380.4	302.7
Deferred energy costs, net	-14.3	-18.7	-38.9	-28.1
Operations and maintenance	151.2	152.3	518.9	511
Depreciation and amortization	71.3	67.4	207	206.5
Taxes other than income taxes	57.4	54.4	159.7	159.7
Total operating expenses	587.8	662.7	1890.9	1,946
Operating income	205.9	186.9	674.8	732.1
Other income (expense), net	1.9	4.5	6.1	15.3
Interest expense	85.1	57.9	201.5	175
Income before income taxes	122.7	133.5	479.4	572.4
Income tax expense	45.3	44.3	195.1	192.5
Net income	77.4	89.2	284.3	379.9
Less net income attributable to noncontrolling interest	-0.4	-0.2	-0.8	-0.7
Net income attributable to Allegheny Energy, Inc.	$77	$89	283.5	379.2
Earnings per share attributable to Allegheny Energy, Inc.:
Basic	0.45	0.53	1.67	2.25
Diluted	0.45	0.52	1.67	2.23
Average shares outstanding:
Basic	169.6	168.9	169.5	168.2
Diluted	170	170	169.9	170
Dividends per share	0.15	0.15	0.45	0.45

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Cash Flows From Operating Activities:
Net income	284.3	379.9
Adjustments for non-cash items included in income:
Depreciation and amortization	207	206.5
Amortization of debt related costs	9.5	8.2
Amortization of liability for adverse power purchase commitment	-13.1	-12.9
Amortization of Pennsylvania stranded costs	0	8.6
Provision for uncollectible accounts	12.3	13.3
Deferred income taxes and investment tax credit, net	188.5	177
Deferred energy costs, net	-38.9	-28.1
Stock-based compensation expense	11.9	9.8
Unrealized gains on derivative contracts, net	-16.1	-136.9
Pension and other postretirement employee benefit plan expense	30	23.5
Pension and other postretirement employee benefit plan contributions	-45.1	-45.4
Deferred revenue - Fort Martin scrubber project	8.1	9.3
Deferred revenue - Virginia	-28.3	14
Uncollected transmission revenue	-14.6	-4.3
Other, net	12.9	10.8
Changes in certain assets and liabilities:
Accounts receivable, net	1	-28.3
Materials, supplies and fuel	-85.2	-43.3
Prepaid taxes	-12.2	21.5
Collateral deposits	32.7	31.2
Accounts payable	-45.3	-62.1
Accrued taxes	-55.7	(35)
Accrued interest	9.1	-2.5
Regulatory assets	47.5	26.3
Deferred income taxes	-2.6	-2.5
Regulatory liabilities	(24)	41.1
Distributions from equity method investee	1.3	0
Assets and liabilities held for sale	3.1	0
Other operating assets and liabilities	5.6	9.4
Net cash provided by operating activities	483.7	589.1
Cash Flows From Investing Activities:
Capital expenditures	-870.1	-714.3
Proceeds from asset sales	0.2	0.4
Purchase of Merrill Lynch interest in subsidiary	0	(50)
Decrease in restricted funds	131	177.6
Other investments	-3.8	-4.1
Net cash used in investing activities	-742.7	-590.4
Cash Flows From Financing Activities:
Repayment of note payable	0	(10)
Issuance of long-term debt	709.2	305.6
Repayment of long-term debt	-438.3	-384.6
Costs associated with AE Supply revolving credit facility refinancing	-21.6	0
Equity contribution to PATH, LLC by the joint venture partner	6.9	4.5
Payments on capital lease obligations	-6.4	-6.8
Proceeds from exercise of employee stock options	1.6	21.5
Cash dividends paid on common stock	-76.2	-75.7
Net cash provided by (used in) financing activities	175.2	-145.5
Net decrease in cash and cash equivalents	-83.8	-146.8
Cash and cash equivalents at beginning of period	362.1	258.8
Cash and cash equivalents at end of period	278.3	112
Supplemental Cash Flows Information:
Cash paid during the period for interest (net of amounts capitalized)	182.5	169.2
Accounts payable at September 30 relating to capital expenditures	136.3	76.3

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	9 Months Ended Sep. 30, 2009	9 Months Ended Dec. 31, 2008
Current Assets:
Cash and cash equivalents	278.3	362.1
Accounts receivable:
Customer	180.2	188.3
Unbilled utility revenue	87.8	122.7
Wholesale and other	59.3	61.5
Allowance for uncollectible accounts	-13.3	-13.3
Materials and supplies	109.8	115.1
Fuel	218	128.2
Deferred income taxes	22.5	69.6
Prepaid taxes	56.9	44.8
Collateral deposits	24.7	33.5
Derivative assets	40.4	113.1
Regulatory assets	153	158.8
Assets held for sale	30.4	0
Other	124.6	111.3
Total current assets	1372.6	1495.7
Property, Plant and Equipment:
Generation	6641.1	6107.3
Transmission	1239.3	1171.7
Distribution	3732.4	3944.1
Other	461.4	463.4
Accumulated depreciation	-5048.9	-4994.1
Subtotal	7025.3	6692.4
Construction work in progress	1447.2	1309.8
Property, plant and equipment held for sale, net	250.1	0
Total property, plant and equipment, net	8722.6	8002.2
Other Noncurrent Assets:
Regulatory assets	659.3	687.7
Goodwill	367.3	367.3
Restricted funds-Fort Martin scrubber project	0	133.3
Investments in unconsolidated affiliates	27.2	28
Derivative assets	0.7	9.8
Other	113.4	87
Total other noncurrent assets	1167.9	1313.1
Total Assets	11263.1	10,811
Current Liabilities:
Long-term debt due within one year	160.7	93.9
Accounts payable	346.1	374.2
Accrued taxes	69.6	119.4
Payable to PJM for FTRs	80.9	110.8
Derivative liabilities	13.8	22.2
Regulatory liabilities	39.3	69.2
Accrued interest	67.1	58.1
Security deposits	48.8	46.2
Liabilities associated with assets held for sale	9.3	0
Other	116.4	109.6
Total current liabilities	952	1003.6
Long-term Debt, Excluding Amounts Due Within One Year	4327.4	4115.9
Deferred Credits and Other Liabilities:
Derivative liabilities	19.2	11.9
Income taxes payable	84.7	75.7
Investment tax credit	62.8	65.8
Deferred income taxes	1397.6	1277.4
Regulatory liabilities	469.8	528.9
Pension and other postretirement employee benefit plan liabilities	559.4	578.4
Adverse power purchase commitment	118.9	132.3
Liabilities associated with assets held for sale	53.1	0
Other	157.2	165.4
Total deferred credits and other liabilities	2922.7	2835.8
Commitments and Contingencies (Note 17)	-	-
Equity:
Common stock-$1.25 par value per share, 260 million shares authorized and 169,571,717 and 169,413,887 shares issued at September 30, 2009 and December 31, 2008, respectively	211.9	211.8
Other paid-in capital	1965.9	1952.5
Retained earnings	938.9	731.6
Treasury stock at cost-49,493 shares	-1.8	-1.8
Accumulated other comprehensive loss	-66.5	-43.3
Total Allegheny Energy, Inc. common stockholders' equity	3048.4	2850.8
Noncontrolling interest	12.6	4.9
Total equity	3,061	2855.7
Total Liabilities and Equity	11263.1	$10,811

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
	Sep. 30, 2009	Dec. 31, 2008
Common stock, par value	1.25	1.25
Common stock, shares authorized	260,000,000	260,000,000
Common stock, shares issued	169,571,717	169,413,887
Treasury stock at cost, shares	49,493	49,493

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Millions, except Share data		Common stock	Other paid-in capital	Retained earnings	Treasury stock	Accumulated other comprehensive loss	Total Allegheny Energy, Inc. common stockholders' equity	Noncontrolling interest	Total
Beginning Balance at Dec. 31, 2007		209.1	1924.1	444.2	-1.8	-40.2	2535.4	13.2	2548.6
Beginning Balance at Dec. 31, 2007	167,223,576
Net income				379.2			379.2	0.7	379.9
Defined benefit pension and other benefit plan amortization, net of tax of $0.6 in 3 months ended September 30th, 2009, $1.7 in 9 months ended September 30th, 2009, $0.3 in 3 months ended September 30th, 2008 and $0.9 in 9 months ended September 30th, 2008						1	1		1
Cash flow hedges, net of tax of $21.2 in 3 months ended September 30th, 2009, $16.4 in 9 months ended September 30th, 2009, $51.0 in 3 months ended September 30th, 2008 and $6.7 in 9 months ended September 30th 2008						10.6	10.6		10.6
Purchase of minority interest in AE Supply								-13.2	-13.2
Equity contribution to PATH, LLC by the joint venture partner								4.5	4.5
Dividends on common stock				-75.7			-75.7		-75.7
Stock-based compensation expense:
Stock units			0.6				0.6		0.6
Non-employee director stock awards	19,097
Non-employee director stock awards			0.8				0.8		0.8
Stock options			6.9				6.9		6.9
Performance shares			1.5				1.5		1.5
Exercise of stock options	1,558,452
Exercise of stock options		2	19.5				21.5		21.5
Settlement of stock units	252,582
Settlement of stock units		0.3	-8.1				-7.8		-7.8
Dividends on stock units			0.1	-0.1					0
Ending Balance at Sep. 30, 2008	169,053,707
Ending Balance at Sep. 30, 2008		211.4	1945.4	747.6	-1.8	-28.6	2,874	5.2	2879.2
Beginning Balance at Jun. 30, 2008		211	1937.7	683.9	-1.8	-109.5	2721.3	5	2726.3
Beginning Balance at Jun. 30, 2008	168,709,253
Net income				89			89	0.2	89.2
Defined benefit pension and other benefit plan amortization, net of tax of $0.6 in 3 months ended September 30th, 2009, $1.7 in 9 months ended September 30th, 2009, $0.3 in 3 months ended September 30th, 2008 and $0.9 in 9 months ended September 30th, 2008						0.4	0.4		0.4
Cash flow hedges, net of tax of $21.2 in 3 months ended September 30th, 2009, $16.4 in 9 months ended September 30th, 2009, $51.0 in 3 months ended September 30th, 2008 and $6.7 in 9 months ended September 30th 2008						80.5	80.5		80.5
Dividends on common stock				-25.3			-25.3		-25.3
Stock-based compensation expense:
Non-employee director stock awards	1,632
Non-employee director stock awards			0.2				0.2		0.2
Stock options			2.1				2.1		2.1
Performance shares			1.1				1.1		1.1
Exercise of stock options	339,322
Exercise of stock options		0.4	4.3				4.7		4.7
Settlement of stock units	3,500
Ending Balance at Sep. 30, 2008					-1.8
Beginning Balance at Dec. 31, 2008		211.8	1952.5	731.6	-1.8	-43.3	2850.8	4.9	2855.7
Beginning Balance at Dec. 31, 2008	169,364,394
Net income				283.5			283.5	0.8	284.3
Defined benefit pension and other benefit plan amortization, net of tax of $0.6 in 3 months ended September 30th, 2009, $1.7 in 9 months ended September 30th, 2009, $0.3 in 3 months ended September 30th, 2008 and $0.9 in 9 months ended September 30th, 2008						2.5	2.5		2.5
Cash flow hedges, net of tax of $21.2 in 3 months ended September 30th, 2009, $16.4 in 9 months ended September 30th, 2009, $51.0 in 3 months ended September 30th, 2008 and $6.7 in 9 months ended September 30th 2008						-25.7	-25.7		-25.7
Equity contribution to PATH, LLC by the joint venture partner								6.9	6.9
Dividends on common stock				-76.2			-76.2		-76.2
Stock-based compensation expense:
Non-employee director stock awards	18,907
Non-employee director stock awards			0.7				0.7		0.7
Stock options			5.6				5.6		5.6
Performance shares			5.5				5.5		5.5
Restricted shares	17,850
Restricted shares			0.1				0.1		0.1
Exercise of stock options	117,500
Exercise of stock options		0.1	1.5				1.6		1.6
Settlement of stock units	3,573
Ending Balance at Sep. 30, 2009	169,522,224
Ending Balance at Sep. 30, 2009		211.9	1965.9	938.9	-1.8	-66.5	3048.4	12.6	3,061
Beginning Balance at Jun. 30, 2009		211.9	1981.9	887.3	-1.8	-33.6	3045.7	5.6	3051.3
Beginning Balance at Jun. 30, 2009	169,482,591
Net income				77			77	0.4	77.4
Defined benefit pension and other benefit plan amortization, net of tax of $0.6 in 3 months ended September 30th, 2009, $1.7 in 9 months ended September 30th, 2009, $0.3 in 3 months ended September 30th, 2008 and $0.9 in 9 months ended September 30th, 2008						0.8	0.8		0.8
Cash flow hedges, net of tax of $21.2 in 3 months ended September 30th, 2009, $16.4 in 9 months ended September 30th, 2009, $51.0 in 3 months ended September 30th, 2008 and $6.7 in 9 months ended September 30th 2008						-33.7	-33.7		-33.7
Equity contribution to PATH, LLC by the joint venture partner								6.6	6.6
Dividends on common stock				-25.4			-25.4		-25.4
Stock-based compensation expense:
Non-employee director stock awards	3,000
Non-employee director stock awards			0.2				0.2		0.2
Stock options			1.7				1.7		1.7
Performance shares			1.4				1.4		1.4
Exercise of stock options	33,060
Exercise of stock options			0.4				0.4		0.4
Settlement of stock units	3,573
Share-based excess tax benefit			-19.7				-19.7		-19.7
Ending Balance at Sep. 30, 2009					-1.8

2_Statement Of Shareholders Equ

Statement Of Shareholders Equity And Other Comprehensive Income (Parenthetical) (USD $)
In Millions	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Defined benefit pension and other benefit plan amortization, tax	0.6	0.3	1.7	0.9
Cash flow hedges, tax	21.2	$51	16.4	6.7

NOTE 1: BASIS OF PRESENTATION

NOTE 1: BASIS OF PRESENTATION
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 1: BASIS OF PRESENTATION	NOTE 1: BASIS OF PRESENTATION Business Description Allegheny Energy, Inc. (AE and, together with its subsidiaries, Allegheny) is an integrated energy business that owns and operates electric generation facilities and delivers electric services to customers in Pennsylvania, West Virginia, Maryland and Virginia. Alleghenys two business segments are the Delivery and Services segment and the Generation and Marketing segment. These reportable segments are strategic business units that offer different products and services and are managed separately. The Delivery and Services segment primarily consists of Alleghenys regulated transmission and distribution operations conducted by Monongahela Power Company (Monongahela), The Potomac Edison Company (Potomac Edison) and West Penn Power Company (West Penn and, together with Monongahela and Potomac Edison, the Distribution Companies). The Distribution Companies operate electric transmission and distribution (TD) systems in Pennsylvania, West Virginia, Maryland and Virginia. The Delivery and Services segment also includes the operations of Trans-Allegheny Interstate Line Company (TrAIL Company) and Potomac-Appalachian Transmission Highline, LLC (PATH, LLC). TrAIL Company was formed in 2006 in connection with the management and financing of transmission expansion projects, including the Trans-Allegheny Interstate Line (TrAIL), a 500 kV transmission line to extend from southwestern Pennsylvania through West Virginia and into northern Virginia. PATH, LLC, which is a series limited liability company, was formed in 2007 with a subsidiary of American Electric Power Company, Inc. (AEP) to build the Potomac-Appalachian Transmission Highline (PATH), a high-voltage transmission line that is proposed to extend across West Virginia and into Maryland. In May 2009, Potomac Edison signed definitive agreements to sell its electric distribution operations in Virginia. See Note 3 Assets Held for Sale for additional information. The Generation and Marketing segment primarily consists of Alleghenys electric generation operations conducted by Allegheny Energy Supply Company, LLC (AE Supply) and Monongahelas regulated generation operations, as well as the operations of Allegheny Generating Company (AGC). AGC owns and sells generation capacity to AE Supply and Monongahela, which own approximately 59% and 41% of AGC, respectively. Allegheny Energy Service Corporation (AESC) is a wholly-owned subsidiary of AE that employs substantially all of Alleghenys personnel. Financial Statement Presentation As permitted by the rules and regulations of the Securities and Exchange Commission (SEC), Alleghenys accompanying unaudited Consolidated Financial Statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). These unaudited Consolidated Financial Statements should be read in conjunction with Alleghenys Consolidated Financial Statements and Notes in its Annual Report on Form 10-K for the year ended December31, 2008. The acc

NOTE 2: RECENTLY ADOPTED AND RE

NOTE 2: RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING STANDARDS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 2: RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING STANDARDS	NOTE 2: RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING STANDARDS In June 2009, the Financial Accounting Standards Board (FASB) issued authoritative guidance that replaced the previous hierarchy of GAAP and established the FASB Accounting Standards Codification (FASB Codification) as the single source of authoritative U.S. GAAP recognized by the FASB to be applied to the financial statements of nongovernmental entities for periods ending after September15, 2009. SEC rules and interpretive releases are also sources of authoritative GAAP for SEC registrants. This guidance modifies the GAAP hierarchy to include only two levels of GAAP: authoritative and nonauthoritative. The FASB Codification was not intended to change or alter existing GAAP, and Alleghenys adoption of this guidance did not impact its results of operations, cash flows or financial position. Consolidation of Variable Interest Entities In June 2009, the FASB issued SFAS No.167, Amendments to FASB Interpretation No.46(R) (SFAS 167). SFAS 167 amends FASB Interpretation No.46 (revised December 2003), Consolidation of Variable Interest Entities an interpretation of ARB No.51, (FIN 46(R)), (FASB Codification Topic 805) to require: an enterprise to perform an analysis to determine whether the enterprises variable interests give it a controlling financial interest in a variable interest entity; ongoing assessments of whether an enterprise is the primary beneficiary of a variable interest entity; and enhanced disclosures with more transparent information about an enterprises involvement in a variable interest entity. It is possible that the application of SFAS 167 will change both Alleghenys prior assessment of certain entities as variable interest entities and the determination of which variable interest entities are required to be consolidated, including an evaluation of PATH-WV. SFAS 167 will be effective for Allegheny on January1, 2010. Allegheny is currently evaluating the potential impact of SFAS 167 on its financial statements. Subsequent Events On June16, 2009, Allegheny adopted SFAS No.165, Subsequent Events (SFAS 165), (FASB Codification Topic 810). SFAS 165 establishes general standards of accounting for, and disclosure of, events that occur after the balance sheet date but before financial statements are issued. Specifically, SFAS 165 sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. Its adoption had no effect on Alleghenys financial statements. Fair Value Measurements and Disclosures On January1, 2009, Allegheny adopted FSP FAS No.157-2, Effective Date of FASB Statement 157 (FSP FAS 157-2), (FASB Codification Topic 820), which permitted a one-year deferral of the application of SFAS 157 for all non-financial assets and non-

NOTE 3: ASSETS HELD FOR SALE

NOTE 3: ASSETS HELD FOR SALE
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 3: ASSETS HELD FOR SALE	NOTE 3: ASSETS HELD FOR SALE On May4, 2009, Potomac Edison signed definitive agreements to sell its electric distribution operations in Virginia (VA Distribution Business) to Rappahannock Electric Cooperative and Shenandoah Valley Electric Cooperative (the Buyers). The agreements are subject to state regulatory approval in Virginia and West Virginia, as well as federal approval and certain third-party consents. Under the terms of the agreements, Potomac Edison will transfer its Virginia distribution assets and certain related liabilities to the Buyers in exchange for cash proceeds of approximately $340 million, subject to adjustment for changes in assets and liabilities through the closing date. As part of their agreement, Monongahela will purchase certain West Virginia distribution operations from Shenandoah Valley Electric Cooperative for approximately $15 million. The sale is expected to close following the completion of applicable regulatory proceedings. Hearings before the Virginia State Corporation Commission (the Virginia SCC) are scheduled to commence March2, 2010. The VA Distribution Business is included in the Delivery and Services segment. For periods after May4, 2009, assets and liabilities relating to the VA Distribution Business are classified as held for sale in Alleghenys consolidated balance sheets, and depreciation expense on such assets ceased. Assets held for sale and liabilities associated with assets held for sale at September30, 2009 were as follows: (In millions) Amounts Current Assets: Accounts receivable $ 28.9 Materials and supplies 0.9 Regulatory assets 0.6 Total current assets 30.4 Property, Plant and Equipment: Distribution property, plant and equipment 342.0 Accumulated depreciation (91.9 ) Property, plant and equipment, net 250.1 Total assets held for sale $ 280.5 Current Liabilities: Customer deposits $ 5.3 Regulatory liabilities 2.9 Other 1.1 Total current liabilities 9.3 Deferred Credits and Other Liabilities: Regulatory liabilities 52.9 Other 0.2 Total deferred credits and other liabilities 53.1 Total liabilities associated with assets held for sale $ 62.4

NOTE 4: RATES AND REGULATION

NOTE 4: RATES AND REGULATION
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 4: RATES AND REGULATION	NOTE 4: RATES AND REGULATION State Regulation and Rate Matters West Virginia Rates. In August 2009, Monongahela and Potomac Edison filed a request with the West Virginia Public Service Commission (the West Virginia PSC) for a base rate increase of $122.1 million, with rates anticipated to be effective June 2010. Base rates reflect the utilities non-fuel costs. Fuel costs are recovered through a separate regulatory proceeding. On September1, 2009, Monongahela and Potomac Edison filed their annual fuel adjustment request with the West Virginia PSC, requesting a rate increase of $143.2 million to reflect increases in their unrecovered balances of fuel and purchased power costs that have accrued through June 2009 and projected increases through June 2010. The new rates, proposed to become effective January1, 2010, were submitted pursuant to the schedule for annual fuel and purchased power cost reviews. Environmental Project Financing. In July 2009, Monongahela and Potomac Edison filed a request with the West Virginia PSC for authority to issue approximately $105 million of environmental control bonds to fund the remaining portion of its flue gas desulfurization (Scrubber) project at Fort Martin generating station. The bonds would be repaid using funds collected from West Virginia customers through an environmental control charge. In September 2009, the West Virginia PSC issued a financing order granting Monongahela and Potomac Edison the authority, subject to the terms and conditions of the financing order, to issue the environmental control bonds and impose a related environmental control charge. Virginia Rates. In April 2009, Potomac Edison filed a request with the Virginia SCC for a rate increase of approximately $19.4 million over current rates for the 12-month period beginning July1, 2009. The request reflects the results of a power auction in December 2008. In May 2009, the Virginia SCC issued an order granting an interim rate increase of approximately $19.4 million, subject to refund, effective July1, 2009. In October 2009, Potomac Edison and the Staff of the Virginia SCC filed a joint stipulation, pursuant to which the rate increase would be reduced by $3.2 million to approximately $16.2 million. On October 30, 2009, the Virginia SCC issued an order that approved and adopted the joint stipulation.

NOTE 5: REGULATORY ASSETS AND L

NOTE 5: REGULATORY ASSETS AND LIABILITIES
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 5: REGULATORY ASSETS AND LIABILITIES	NOTE 5: REGULATORY ASSETS AND LIABILITIES Alleghenys regulated utility operations are subject to utility industry specific accounting provisions. Regulatory assets represent probable future revenues associated with incurred costs that are expected to be recovered in the future from customers through the rate-making process. Regulatory liabilities represent probable future reductions in revenues associated with amounts that are to be credited or refunded to customers through the rate-making process or amounts collected for costs not yet incurred. Regulatory assets and regulatory liabilities reflected in the Consolidated Balance Sheets were as follows: (In millions) September30, 2009 December31, 2008 Regulatory assets, including current portion: Income taxes (a)(b) $ 222.7 $ 231.3 Pension benefits and postretirement benefits other than pensions (a)(c) 377.6 390.4 Pennsylvania Competitive Transition Charge (CTC) reconciliation (d) 21.5 73.6 Unamortized loss on reacquired debt (a)(e) 27.9 31.1 Unrealized loss on decreased fair value of financial transmission rights (f) 7.8 17.8 Deferred ENEC charges (f) 90.9 52.0 Other (g) 63.9 50.3 Subtotal 812.3 846.5 Regulatory liabilities, including current portion: Net asset removal costs Virginia (h) 50.6 Net asset removal costs other than Virginia 372.3 356.8 Income taxes 33.1 35.2 SO2 allowances 12.9 13.3 Virginia collections for costs not yet incurred 28.3 Fort Martin Scrubber project environmental control surcharge 37.2 29.1 Maryland rate stabilization and transition plan surcharge 37.2 61.7 Other 16.4 23.1 Subtotal 509.1 598.1 Net regulatory assets $ 303.2 $ 248.4 (a) Does not earn a return. (b) Amount is being recovered over various periods associated with the remaining useful life of related regulated utility property, plant and equipment. (c) Amount is being recovered over a period up to 13 years. (d) Recorded amount includes an 11% return earned through 2005. No additional return will be earned through the 2010 recovery period. (e) Amount is being recovered over various periods through 2025, based upon the maturities of reacquired debt. (f) Includes amounts that do not earn a return with recovery periods up to two years. (g) Includes amounts that do not earn a return with various recovery periods through 2027. (h) Net asset removal costs of $52.8 million are included in liabilities associated with assets held for sale at September30, 2009 in the consolidated balance sheet.

NOTE 6: INCOME TAXES

NOTE 6: INCOME TAXES
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 6: INCOME TAXES	NOTE 6: INCOME TAXES Allegheny computes income taxes under the liability method. Deferred income tax balances are generally determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Tax benefits are recognized in the financial statements when it is more likely than not that a tax position will be sustained upon examination by the tax authorities based on the technical merits of the position. Such tax positions are measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the tax authority, assuming full knowledge of the position and all relevant facts. Allegheny allocates federal income tax expense (benefit) among its subsidiaries pursuant to its consolidated tax sharing agreement. The following is a reconciliation of reported income tax expense to income tax expense calculated by applying the federal statutory rate of 35% to income before income taxes: Three Months Ended September30, Nine Months Ended September30, 2009 2008 2009 2008 (In millions, except percent) Amount % Amount % Amount % Amount % Income before income taxes $ 122.7 $ 133.5 $ 479.4 $ 572.4 Income tax expense calculated at the federal statutory rate of 35% 42.9 35.0 46.7 35.0 167.8 35.0 200.3 35.0 Increases (reductions) resulting from: Rate-making effects of depreciation differences 1.7 1.4 2.0 1.5 5.2 1.1 5.9 1.0 Plant removal costs (1.0 ) (0.8 ) (1.3 ) (1.0 ) (3.1 ) (0.7 ) (3.9 ) (0.7 ) State income tax, net of federal income tax benefit 4.1 3.3 2.3 1.7 16.8 3.5 13.5 2.4 Amortization of deferred investment tax credits (0.9 ) (0.7 ) (1.0 ) (0.7 ) (2.7 ) (0.6 ) (2.7 ) (0.5 ) Change in estimated Pennsylvania net operating loss benefits 9.5 2.0 (3.0 ) (0.5 ) March 2008 West Virginia state income tax rate change (6.7 ) (1.2 ) Changes in tax reserves related to uncertain tax positions and audit settlements (0.9 ) (0.7 ) (2.7 ) (2.0 ) 2.4 0.5 (7.7 ) (1.3 ) Other, net (0.6 ) (0.5 ) (1.7 ) (1.3 ) (0.8 ) (0.1 ) (3.2 ) (0.6 ) Income tax expense $ 45.3 37.0 $ 44.3 33.2 $ 195.1 40.7 $ 192.5 33.6 Through December31, 2008, Allegheny had not recorded approximately $65.2 million in excess tax benefits related to share-based awards because of its federal income tax net operating loss carryforward position. During the quarter ended March31, 2009

NOTE 7: COMMON STOCK AND DEBT

NOTE 7: COMMON STOCK AND DEBT
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 7: COMMON STOCK AND DEBT	NOTE 7: COMMON STOCK AND DEBT Common Stock On September28, 2009, June22, 2009 and March23, 2009, AE paid cash dividends on its common stock of $0.15 per share to shareholders of record at the close of business on September14, 2009, June8, 2009 and March9, 2009, respectively. On October15, 2009, AEs Board of Directors authorized a cash dividend on its common stock of $0.15 per share payable on December28, 2009 to shareholders of record on December14, 2009. Debt Outstanding debt and scheduled debt repayments at September30, 2009 were as follows: (In millions) 2009 2010 2011 2012 2013 Thereafter Total AE: AE Revolving Credit Facility $ $ $ 120.0 $ $ $ $ 120.0 Total AE 120.0 120.0 AE Supply: Medium-Term Notes 302.5 503.2 805.7 AE Supply Credit Facility: Term Loan 447.0 447.0 Pollution Control Bonds 1.3 267.2 268.5 Exempt Facilities Revenue Bonds 235.0 235.0 Debentures-AGC 100.0 100.0 Total AE Supply 749.5 504.5 602.2 1,856.2 Monongahela: Environmental Control Bonds (a) 11.1 11.6 12.2 12.8 271.2 318.9 First Mortgage Bonds 300.0 340.0 640.0 Medium-Term Notes 110.0 110.0 Pollution Control Bonds 6.0 7.1 57.2 70.3 Total Monongahela 121.1 11.6 18.2 319.9 668.4 1,139.2 West Penn: First Mortgage Bonds 420.0 420.0 Transition Bonds (a) 19.9 16.0 35.9 Medium-Term Notes 80.0 80.0 Total West Penn 19.9 16.0 80.0 420.0 535.9 Potomac Edison: First Mortgage Bonds 420.0 420.0 Environmental Control Bonds (a) 3.7 3.9 4.1 4.3 90.5 106.5 Total Potomac Edison 3.7 3.9 4.1 4.3 510.5 526.5 TrAIL Company: Term Loan 310.0 310.0 Revolving Loan 20.0 20.0 Tota

NOTE 8: BUSINESS SEGMENTS

NOTE 8: BUSINESS SEGMENTS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 8: BUSINESS SEGMENTS	NOTE 8: BUSINESS SEGMENTS Allegheny manages and evaluates its operations in two business segments, the Delivery and Services segment and the Generation and Marketing segment. The Delivery and Services segment includes the operations of Potomac Edison, West Penn, TrAIL Company, PATH, LLC and Monongahelas electric TD business. The Generation and Marketing segment includes the operations of AE Supply, AGC and Monongahelas West Virginia generating assets. The Generation and Marketing segment includes an unregulated component and a regulated component. The unregulated component primarily consists of AE Supplys power generation and marketing operations, including the results of operations related to AGC on a fully consolidated basis. The regulated component consists of Monongahelas regulated West Virginia generation operations and Monongahelas interest in AGC under the equity method of accounting. The following tables summarize results of operations for Alleghenys two reportable segments. The information for the Delivery and Services segment includes the operations of the VA Distribution Business. See Note 3, Assets Held for Sale, for additional information. Three Months Ended September30, 2009 Generation and Marketing Delivery and Services (In millions) Unregulated Regulated Eliminations Total Eliminations Total External operating revenues $ 12.3 $ 781.4 $ $ 793.7 Internal operating revenues 437.7 2.1 (439.8 ) Total operating revenues $ 358.3 $ 98.4 $ (6.7 ) 450.0 783.5 (439.8 ) 793.7 Fuel 151.2 36.8 188.0 188.0 Purchased power and transmission 9.1 24.4 (6.7 ) 26.8 545.1 (437.7 ) 134.2 Deferred energy costs, net (9.3 ) (9.3 ) (5.0 ) (14.3 ) Operations and maintenance 50.1 17.8 0.1 68.0 85.3 (2.1 ) 151.2 Depreciation and amortization 28.5 5.3 (0.5 ) 33.3 38.0 71.3 Taxes other than income taxes 12.4 5.6 18.0 39.4 57.4 Total operating expenses 251.3 80.6 (7.1 ) 324.8 702.8 (439.8 ) 587.8 Operating income 107.0 17.8 0.4 125.2 80.7 205.9 Other income (expense), net 0.2 3.0 (2.7 ) 0.5 1.4 1.9 Interest expense 46.6 12.6 59.2 25.9 85.1 Income before income taxes 60.6 8.2 (2.3 ) 66.5 56.2 122.7 Income tax expense 20.4 0.7 (0.1 ) 21.0 24.3 45.3 Net incom

NOTE 9: FAIR VALUE MEASUREMENTS

NOTE 9: FAIR VALUE MEASUREMENTS, DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 9: FAIR VALUE MEASUREMENTS, DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES	NOTE 9: FAIR VALUE MEASUREMENTS, DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Alleghenys assets and liabilities measured at fair value on a recurring basis at September 30, 2009 consisted of the following: (In millions) Assets Liabilities Cash equivalents (a) $ 243.6 $ Derivative instruments (b): Current 188.2 (13.7 ) Non-current 4.2 (22.1 ) Total derivative instruments 192.4 (35.8 ) Total recurring fair value measurements $ 436.0 $ (35.8 ) (a) Cash equivalents represent amounts invested in money market mutual funds and are valued using Level 1 inputs. (b) Before netting of cash collateral and financial transmission right (FTR) obligation. The following table disaggregates the net fair values of derivative assets and liabilities, before netting of cash collateral and FTR obligation, based on their level within the fair value hierarchy. This table excludes derivatives that have been designated as normal purchases or normal sales. September30, 2009 December31, 2008 (In millions) Derivative Assets Derivative Liabilities NetDerivative Assets Derivative Assets Derivative Liabilities NetDerivative Assets Level 1 $ 31.6 $ (2.9 ) $ 28.7 $ 10.5 $ $ 10.5 Level 2 35.9 (32.9 ) 3.0 112.4 (34.3 ) 78.1 Level 3 124.9 124.9 189.8 189.8 Total $ 192.4 $ (35.8 ) $ 156.6 $ 312.7 $ (34.3 ) $ 278.4 Derivative assets and liabilities included in Level 1 primarily consist of exchange-traded futures and other exchange-traded transactions that are valued using closing prices for identical instruments in active markets. Derivative assets and liabilities included in Level 2 primarily consist of commodity forward contracts and interest rate swaps and are valued using a pricing model with inputs that are observable in the market, such as quoted forward prices of commodities, or that can be derived from or corroborated by observable market data. Derivative assets included in Level 3 consist of FTRs and are valued using an internal model based on data from PJM Interconnection, L.L.C. (PJM) annual and monthly FTR auctions. The following table shows the expected settlement year for derivative assets and liabilities outstanding before netting of cash collateral and FTR obligation at September30, 2009: (In millions) 2009 2010 2011 2012 Total Level 1 $ 1.0 $ 31.7 $ (1.6 ) $ (2.4 ) $ 28.7 Level 2 44.5 (26.3 ) (14.3 ) (0.9 ) 3.0 Level 3 38.9 86.0 124.9 Net derivative assets (liabilities) $ 84.4 $ 91.4 $ (15.9 ) $ (3.3 ) $ 156.6 The following tables provide a reconciliation of the beginning and ending balance of FTR derivative assets meas

NOTE 10: STOCK-BASED COMPENSATI

NOTE 10: STOCK-BASED COMPENSATION
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 10: STOCK-BASED COMPENSATION	NOTE 10: STOCK-BASED COMPENSATION The following table summarizes stock-based compensation expense included in operations and maintenance expenses: ThreeMonthsEnded September30, NineMonthsEnded September30, (In millions) 2009 2008 2009 2008 Stock options $ 1.7 $ 2.1 $ 5.6 $ 6.9 Performance shares 1.4 1.1 5.5 1.5 Non-employee director shares 0.3 0.3 0.7 0.8 Stock units 0.1 0.6 Total stock-based compensation expense 3.4 3.5 11.9 9.8 Income tax benefit 1.4 1.4 4.8 3.9 Total stock-based compensation expense, net of tax $ 2.0 $ 2.1 $ 7.1 $ 5.9 Stock-based compensation expense is based on awards ultimately expected to vest, using an estimated annual forfeiture rate of 5%. No stock-based compensation cost was capitalized during the nine months ended September30, 2009 and 2008. Stock Options Allegheny records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant under the Black-Scholes option-pricing model using the following weighted-average assumptions for stock options granted during the periods indicated: Three Months Ended September30, Nine Months Ended September30, 2009 2008 2009 2008 Annual risk-free interest rate 3.58 % 2.86 % 3.18 % Expected term of the option (in years) 6.36 6.00 6.04 Expected annual dividend yield 1.31 % 2.53 % 1.12 % Expected stock price volatility 27.0 % 36.4 % 27.3 % Grant date fair value per stock option $ 13.50 $ 7.14 $ 15.27 No stock options were granted during the three months ended September30, 2009. The annual risk-free interest rate is based on the United States Treasury yield curve at the date of the grant for a period equal to the expected term of the options granted. The expected term of the stock option grants was calculated in accordance with Staff Accounting Bulletin 107, using the simplified method. AE continues to use the simplified method for its calculation of expected term due to its lack of sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term and because AE has granted stock options in prior years with varying vesting terms, which also makes it difficult to evaluate historical exercise data. The expected annual dividend yield assumption was based on AEs current dividend rate at the time of each grant. For stock options granted during 2009 and 2008, the expected stock price volatility was based on both historical stock volatility and the volatility levels implied on the grant date by actively traded option contracts on AEs common stock. Stock option activity during the three and nine months ended September30, 2009 was as follows: Stock Options Weighted Average Exercise Price Aggregate Intrinsic Value (inmillions) Outstanding a

NOTE 11: PENSION BENEFITS AND P

NOTE 11: PENSION BENEFITS AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 11: PENSION BENEFITS AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS	NOTE 11: PENSION BENEFITS AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS Substantially all of Alleghenys personnel, including officers, are employed by AESC and are covered by a noncontributory, defined benefit pension plan. Allegheny also maintains a Supplemental Executive Retirement Plan (the SERP) for executive officers and other senior executives. Allegheny also provides subsidies for medical and life insurance plans for eligible retirees and dependents. Medical benefits, which make up the largest component of the postretirement benefits other than pensions, have retiree premiums based upon an age and years-of-service vesting schedule, include other plan provisions that limit future benefits and take into account certain collective bargaining arrangements. Subsidized medical coverage is not provided in retirement to employees hired on or after January1, 1993, with the exception of certain union employees who were hired or became members before May1, 2006. The provisions of the postretirement health care plans and certain collective bargaining arrangements limit Alleghenys costs for eligible retirees and dependents. The components of the net periodic cost for pension benefits for employees and covered dependents by Allegheny were as follows: Pension Benefits Three Months Ended September 30, Nine Months Ended September30, (In millions) 2009 2008 2009 2008 Components of net periodic cost: Service cost $ 5.6 $ 5.3 $ 16.8 $ 15.9 Interest cost 17.7 17.1 53.2 51.4 Expected return on plan assets (18.5 ) (19.2 ) (55.7 ) (57.6 ) Amortization of unrecognized transition obligation 0.1 0.1 0.3 0.3 Amortization of prior service cost 0.8 0.8 2.4 2.4 Recognized actuarial loss 2.8 1.8 8.4 5.4 Net periodic cost $ 8.5 $ 5.9 $ 25.4 $ 17.8 The components of the net periodic cost for postretirement benefits other than pensions (principally health care and life insurance) for employees and covered dependents by Allegheny were as follows: Postretirement Benefits Other than Pensions Three Months Ended September30, Nine Months Ended September30, (In millions) 2009 2008 2009 2008 Components of net periodic cost: Service cost $ 1.1 $ 1.1 $ 3.3 $ 3.3 Interest cost 4.3 4.3 12.9 12.8 Expected return on plan assets (1.3 ) (1.8 ) (4.0 ) (5.4 ) Amortization of unrecognized transition obligation 1.4 1.4 4.3 4.3 Recognized actuarial loss 0.5 0.2 1.4 0.5 Net periodic cost $ 6.0 $ 5.2 $ 17.9 $ 15.5 For the three months ended September30, 2009 and 2008, Allegheny capitalized $4.6 million and $3.4 million, respectively, and for the nine months ended September30

NOTE 12: FINANCIAL INSTRUMENTS

NOTE 12: FINANCIAL INSTRUMENTS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 12: FINANCIAL INSTRUMENTS	NOTE 12:FINANCIAL INSTRUMENTS As of September30, 2009 and December31, 2008, the carrying amounts of accounts receivable, accounts payable and short-term debt are representative of fair value because of their short-term nature. The carrying amounts and estimated fair values of long-term debt, including long-term debt due within one year, were as follows: September30, 2009 December31, 2008 (In millions) Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt $ 4,488.1 $ 4,647.4 $ 4,209.8 $ 3,951.7 The fair value of long-term debt was estimated based on actual market prices or market prices of similar debt issues.

NOTE 13: COMPREHENSIVE INCOME A

NOTE 13: COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 13: COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS	NOTE 13: COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS Comprehensive income consisted of the following: ThreeMonthsEnded September30, NineMonthsEnded September30, (In millions) 2009 2008 2009 2008 Net income $ 77.4 $ 89.2 $ 284.3 $ 379.9 Other comprehensive income, net of tax: Cash flow hedges, net of tax of $21.2, $51.0, $16.4 and $6.7, respectively (33.7 ) 80.5 (25.7 ) 10.6 Defined benefit pension and other benefit plan amortization, net of tax of $0.6, $0.3, $1.7 and $0.9, respectively 0.8 0.4 2.5 1.0 Comprehensive income 44.5 170.1 261.1 391.5 Less comprehensive income attributable to noncontrolling interest (0.4 ) (0.2 ) (0.8 ) (0.7 ) Comprehensive income attributable to Allegheny Energy, Inc. $ 44.1 $ 169.9 $ 260.3 $ 390.8 The components of accumulated other comprehensive loss, included in the shareholders equity section of the Consolidated Balance Sheets, were as follows: (In millions) September30, 2009 December31, 2008 Cash flow hedges, net of tax of $1.5 and $17.8, respectively $ 2.4 $ 28.1 Net unrecognized pension and other benefit plan costs, net of tax of $(47.0) and $(48.7), respectively (68.9 ) (71.4 ) Total $ (66.5 ) $ (43.3 )

NOTE 14: EARNINGS PER SHARE

NOTE 14: EARNINGS PER SHARE
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 14: EARNINGS PER SHARE	NOTE 14: EARNINGS PER SHARE The reconciliation of the basic and diluted earnings per common share calculation is as follows: Three Months Ended September30, Nine Months Ended September30, (In millions, except share and per share amounts) 2009 2008 2009 2008 Basic Income per Share: Numerator: Net income attributable to Allegheny Energy, Inc. $ 77.0 $ 89.0 $ 283.5 $ 379.2 Denominator: Weighted average common shares outstanding 169,565,262 168,894,148 169,503,916 168,232,547 Basic earnings per share attributable to Allegheny Energy, Inc. $ 0.45 $ 0.53 $ 1.67 $ 2.25 Diluted Income per Share: Numerator: Net income attributable to Allegheny Energy, Inc. $ 77.0 $ 89.0 $ 283.5 $ 379.2 Denominator: Weighted average common shares outstanding 169,565,262 168,894,148 169,503,916 168,232,547 Effect of dilutive securities: Stock options (a) 412,767 1,003,600 399,548 1,450,503 Stock units 2,262 36,766 3,595 276,238 Non-employee stock awards 58,887 55,084 Performance shares 17,261 12,448 18,005 8,573 Total shares 169,997,552 170,005,849 169,925,064 170,022,945 Diluted earnings per share attributable to Allegheny Energy, Inc. $ 0.45 $ 0.52 $ 1.67 $ 2.23 (a) The dilutive share calculations exclude 2,007,513 shares and 637,846 shares for the three months ended September30, 2009 and 2008, respectively, and 1,750,389 shares and 491,388 shares for the nine months ended September30, 2009 and 2008, respectively, relating to stock options because the inclusion of these amounts would have been antidilutive under the treasury stock method.

NOTE 15: VARIABLE INTEREST ENTI

NOTE 15: VARIABLE INTEREST ENTITIES
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 15: VARIABLE INTEREST ENTITIES	NOTE 15:VARIABLE INTEREST ENTITIES GAAP requires the primary beneficiary of a Variable Interest Entity (VIE) to consolidate the entity and also requires majority and significant variable interest investors to provide certain disclosures. A VIE is an entity in which the equity investors do not have a controlling interest or in which the equity investment at risk is insufficient to finance the entitys activities without receiving financial support from the other parties. Independent Power Producer Contracts. Potomac Edison purchased power from an independent power producer (an IPP) under a long-term power purchase agreement at a cost of $19.5 million and $30.3 million for the three months ended September 30, 2009 and 2008, respectively, and $65.6 million and $85.0 million for the nine months ended September 30, 2009 and 2008, respectively. West Penn purchased power from another IPP under a long-term power purchase agreement at a cost of $11.6 million and $9.3 million for the three months ended September 30, 2009 and 2008, respectively, and $35.7 million and $25.6 million for the nine months ended September 30, 2009 and 2008, respectively. Allegheny has requested, but has been unable to obtain, information necessary to determine whether the IPPs are VIEs and whether Allegheny is the primary beneficiary, because the IPPs have determined that such information is proprietary. Potomac Edison recovers the full amount, and West Penn recovers a portion, of the cost of the applicable power contract in their respective rates charged to consumers or through customer surcharges. Neither Potomac Edison nor West Penn is subject to any risk of loss associated with the applicable potential VIE, because neither of them has any obligation to the applicable IPP other than to purchase the power that the IPP produces according to the terms of the applicable electricity purchase contract. APS Constellation, LLC (APS Constellation).Allegheny Ventures, Inc., a non-utility subsidiary of AE, formed a partnership in 1995 with an unregulated business of Constellation Energy in a joint venture energy services company named APS Constellation. The business purpose of APS Constellation is the marketing, development, and implementation of energy conservation projects. APS Constellation, working under an Engineer/Procure/Construct agreement as a subcontractor for Potomac Edison, completed multiple energy conservation projects for Potomac Edisons government customers at Ft. Detrick, Maryland. The projects resulted in performance payments and other fees remitted to APS Constellation. APS Constellation securitized the future revenue streams from the projects through several financings and made a partnership distribution of the proceeds in the early 2000s. Some of the project financings required Potomac Edison to provide ongoing guarantees. In 2005, the joint venture operating agreement was amended based on Alleghenys desire to limit its obligations and participation in APS Constellation, such as non-voluntary capital contributions and economic participation in future projects. In 2007, APS Constellation, at Constellation Energys request, began a new project w

NOTE 16: OTHER INCOME

NOTE 16: OTHER INCOME (EXPENSE), NET
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 16: OTHER INCOME (EXPENSE), NET	NOTE 16: OTHER INCOME (EXPENSE), NET Other income (expense), net, consisted of the following: ThreeMonthsEnded September30, NineMonthsEnded September30, (In millions) 2009 2008 2009 2008 Equity component of AFUDC $ 1.6 $ 1.0 $ 4.0 $ 2.4 Interest and dividend income 0.3 1.4 1.5 5.4 Cash received from a former trading executives forfeited assets 1.6 Other 2.1 0.6 5.9 Total $ 1.9 $ 4.5 $ 6.1 $ 15.3

NOTE 17: COMMITMENTS AND CONTIN

NOTE 17: COMMITMENTS AND CONTINGENCIES
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 17: COMMITMENTS AND CONTINGENCIES	NOTE 17: COMMITMENTS AND CONTINGENCIES Allegheny is involved in a number of significant legal proceedings. In certain cases, plaintiffs seek to recover large and sometimes unspecified damages, and some matters may be unresolved for several years. Allegheny cannot currently determine the outcome of the proceedings described below or the ultimate amount of potential losses. Management provides for estimated losses to the extent that information becomes available indicating that losses are probable and that the amounts are reasonably estimable. Additional losses may have an adverse effect on Alleghenys results of operations, cash flows and financial condition. Environmental Matters and Litigation The operations of Alleghenys owned facilities, including its generation facilities, are subject to various federal, state and local laws, rules and regulations as to air and water quality, hazardous and solid waste disposal and other environmental matters, some of which may be uncertain. Compliance may require Allegheny to incur substantial additional costs to modify or replace existing and proposed equipment and facilities. Global Climate Change. The United States relies on coal-fired power plants for more than 48% of its energy. However, coal-fired power plants have come under scrutiny due to their emission of gases implicated in climate change, primarily carbon dioxide, or CO2. Allegheny produces approximately 95% of its electricity at coal-fired facilities and currently produces approximately 45million tons of CO2 annually through its energy production. While there are many unknowns concerning the final regulation of greenhouse gases in the United States, federal and/or state legislation and implementing regulations addressing climate change, including limits on emissions of CO2, likely will be adopted some time in the future. Thus, CO2 legislation and regulation, if not reasonably designed, could have a significant impact on Alleghenys operations. On June26, 2009, the U.S. House of Representatives passed the American Clean Energy and Security Act. The U.S. Senate released its draft of the bill, the Clean Energy Jobs and American Power Act, on September30, 2009. Allegheny can provide no assurance that limits on CO2 emissions, if imposed by legislation or otherwise, will be set at levels that can accommodate its generation facilities absent the installation of controls. Moreover, there is a gap between desired reduction levels in the current proposed legislation and the current capabilities of technology; no current commercial-scale technology exists to enable many of the reduction levels in national, regional and state proposals. Such technology may not become available within a timeframe consistent with the implementation of any future climate control legislation or at all. To the extent that such technology does become available, Allegheny can provide no assurance that it will be suitable for installation at Alleghenys generation facilities on a cost effective basis or at all. Based on estimates from a 2007 U.S. Department of Energy (DOE) National Electric Technology Laboratory report and announced projects by other entities,

NOTE 18: SUBSEQUENT EVENTS

NOTE 18: SUBSEQUENT EVENTS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
NOTE 18: SUBSEQUENT EVENTS	NOTE 18: SUBSEQUENT EVENTS On October1, 2009, AE Supply issued $600 million aggregate principal amount of senior unsecured notes, consisting of $350 million of 5.75% Notes due 2019 and $250 million of 6.75% Notes due 2039. AE Supply used a portion of the net proceeds from the sale of these notes to repay in full its existing $447 million term loan on October2, 2009. AE Supply capitalized $5.3 million in debt issuance costs associated with this new debt issuance and expensed $0.6 million of unamortized debt costs associated with the extinguished term loan. On October6, 2009, Allegheny agreed to the sale and long-term lease of the majority of the assets of its fiber optic network subsidiary, Allegheny Communications Connect, Inc. (ACC), for $27 million to NTELOS Holdings Corp. ACC owns and manages a fiber optic network of more than 2,200 route miles, primarily in Pennsylvania and West Virginia, with portions in several adjoining states. The transaction consists of the sale, lease and assignment of approximately 75% of the network. Allegheny will continue to maintain the lines that are leased. ACC will retain the remaining assets to serve the needs of Alleghenys electric utility subsidiaries, including Smart Grid initiatives. Allegheny expects to close the transaction by the end of 2009. The agreement is subject to regulatory approvals and customary closing conditions. On October7, 2009, AE Supply signed definitive agreements to purchase two hydro generation facilities with a capacity of approximately 11 MWs and to settle a related power purchase contract, for a cash purchase price of approximately $2.0 million. The purchase is subject to approval by FERC. AE Supply expects to complete the transaction by the end of 2009. On October21, 2009, AE Supply used the remaining proceeds of its senior secured note offering to repurchase approximately $152 million aggregate principal amount of its 7.80% Medium Term Notes due 2011 pursuant to a cash tender offer at an aggregate premium of $12.7 million. AE Supply plans to expense the $12.7 million premium, $0.3 million in unamortized debt costs, and $0.4 million in fees related to this tender offer during the three months ending December31, 2009.

Document Information

Document Information
	9 Months Ended Sep. 30, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-09-30

Entity Information

Entity Information (USD $)
	9 Months Ended Sep. 30, 2009	Oct. 31, 2009
Entity [Text Block]
Trading Symbol	AYE
Entity Registrant Name	ALLEGHENY ENERGY, INC
Entity Central Index Key	0000003673
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		169,562,824