The Public Service Commission of West Virginia issued an order late Friday approving construction of Trans-Allegheny Interstate Line Co.'s 500-kV transmission line project in West Virginia subject to certain conditions.

“After a thorough, extensive public process, the Commission has authorized this critical upgrade to the transmission system,” said Paul J. Evanson, chairman, president, and chief executive officer of Allegheny Energy. “We commend the Commission for taking this important action to improve the reliable flow of electricity in West Virginia and throughout the mid-Atlantic area.”

The order approves TrAILCo’s preferred route, as well as certain modifications south of Morgantown known as the Grafton Area Route and other individual adjustments. The order also requires Commission approval in the other states that the Trans-Allegheny Interstate Line (TrAIL) must pass through, prior to beginning construction in West Virginia. TrAILCo continues to evaluate other specifics of the order.

The Commission also approved TrAILCo’s settlement agreement with the Staff of the Public Service Commission of West Virginia, the Consumer Advocate Division, and the West Virginia Energy Users Group concerning TrAIL. The settlement provides specific benefits to West Virginia, including:

• Allegheny’s West Virginia utilities (Monongahela Power Company and The Potomac Edison Company) and TrAILCo will locate 100 to 150 managerial, professional, technical, and administrative jobs in north-central West Virginia. This will involve construction of a new facility in the state. The annual payroll and benefits associated with the jobs at this facility will be approximately $12 million.
• Monongahela Power and Potomac Edison will not seek recovery in West Virginia of the transmission charges associated with TrAIL (estimated to be more than $31 million) for at least a seven-year period beginning from January 2007.
• TrAILCo will contribute $5 million to fund energy conservation programs and assistance plans for low-income customers in West Virginia over a five-year period.
• Monongahela Power and Potomac Edison will provide rate relief totaling approximately $6 million to industrial customers for the years 2010 and 2011.

The West Virginia segments of TrAIL represent the largest portion of the project, which is also awaiting regulatory decisions in Virginia and Pennsylvania. Earlier in the week, the Hearing Examiner in Virginia recommended that regulators in that state authorize construction of the Virginia segments of TrAIL, subject to approvals in West Virginia and Pennsylvania. TrAILCo expects decisions from state regulators in Virginia and Pennsylvania later this year.

In the meantime, TrAILCo will proceed with pre-construction activities, including: right-of-way acquisition, permitting, and engineering activities in West Virginia. The construction phase will last about two-and-a-half years, with TrAIL planned for completion by June 2011.