FirstEnergy Corp. and Allegheny Energy, Inc. yesterday announced that they received approval for their merger from the Public Service Commission of West Virginia.

"We are pleased to have successfully completed this important step in our merger process," said Anthony J. Alexander, president and chief executive officer of FirstEnergy. "We believe the commitments we've made to customers in Allegheny Energy's West Virginia service area will bring significant value in terms of reasonable rates, enhanced customer service and continued support for community initiatives. We look forward to a long and successful relationship with the West Virginia communities now served by Allegheny Energy."

The companies filed their merger application with the WVPSC on May 18, 2010, and filed a settlement agreement with all parties to the application on November 3, 2010. In the application and settlement agreement, the companies committed to:

• Locate a regional headquarters operation for Allegheny Power's West Virginia utility operations within the service territory of Monongahela Power.
• $7.5 million in rate reductions over a two-year period for Allegheny Power's West Virginia customers.
• No net job losses in the utility operating company positions in West Virginia for at least two years as a result of involuntary attrition related to the integration process.
• Expand FirstEnergy's Power Systems Institute program to West Virginia.
• Customer service enhancements and reliability commitments aimed at reducing the duration of outages and improving customer service at the company's call center.
• Maintain the customer call center operations in Fairmont, West Virginia, for at least five years.

The merger application and settlement were supported by the Staff of the WVPSC, the West Virginia Consumer Advocate Division, West Virginia Energy Users Group, the Utility Workers Union of America, AFL-CIO and UWUA System Local 102-O, West Virginia Citizen Action Group, Local Union 2357 and Local Union 50 of the International Brotherhood of Electrical Workers, the West Virginia State Building and Construction Trades Council, and the Marion County Commission.

The merger is expected to close in the first half of 2011, subject to customary closing conditions, including additional regulatory approvals, as outlined in the joint proxy statement/prospectus.

The companies have also received merger approval from the Federal Energy Regulatory Commission and the Virginia State Corporation Commission, and have applications pending with the Pennsylvania Public Utility Commission, and the Maryland Public Service Commission. Shareholders for both FirstEnergy and Allegheny Energy overwhelmingly approved proposals related to the proposed merger.