FirstEnergy Corp. and Allegheny Energy, Inc., along with 10 parties to their merger proceeding in Maryland, have filed with the Maryland Public Service Commission a comprehensive settlement that addresses issues raised in the case. The settlement enhances commitments made in the initial merger application and includes customer credits of $6.5 million – a $4 million increase over the initial filing – to be provided over four years to Potomac Edison’s residential electric distribution customers. It also maintains the companies’ commitment to locate a regional headquarters in Potomac Edison’s Maryland service territory, and includes reliability enhancements and support for the development of new renewable energy resources in the state.

The settlement enhances the significant commitments made in the initial merger application and includes:

• Customer credits of $6.5 million for Potomac Edison’s Maryland residential electric utility distribution consumers over a four-year period, in addition to the savings consumers will realize in the ratemaking process
• A $600,000 contribution of corporate funds for the Electric Universal Service Program
• A reduction of $750,000 in costs to customers for EmPower Maryland Programs, and a designated employee accountable for Potomac Edison’s participation in the program
• Assistance in the development of renewable energy projects with an average annual output of 13,000 megawatt-hours, or the megawatt equivalent, in Maryland
• Reliability commitments aimed at reducing the duration of outages

Parties signing the settlement include the State of Maryland; the Maryland Energy Administration; Maryland Department of the Environment; Maryland Industrial Customers; the Utility Workers Union of America, AFL-CIO; UWUA System Local No. 102; the Board of County Commissioners of Washington County, Maryland; the City of Hagerstown; the Town of Thurmont; and the Town of Williamsport. The settlement, which resolves all issues raised by these parties in the FirstEnergy-Allegheny Energy merger case, is subject to approval of the Maryland Public Service Commission.

The companies filed their application with the Maryland Public Service Commission on May 27, 2010. In it they committed to operate a regional headquarters for Potomac Edison; no net job losses at the Potomac Edison’s Maryland utility operations for at least two years as a result of involuntary attrition related to the integration process; a monthly credit for residential customers totaling $2.5 million over two years; support for competitive markets; a continuation of collective bargaining agreements; commitments to customer reliability; and continued economic development and community support.