Rendell Opposes Allegheny Energy Merger
2 min readGovernor’s News Release
Rendell: Proposed FirstEnergy, Allegheny Energy Merger a Terrible Deal for Consumers, Great Deal for Ohio and Wall Street
Harrisburg – Governor Edward G. Rendell today called on the Pennsylvania Public Utility Commission to deny the merger request by FirstEnergy and Allegheny Energy, saying the proposed deal could kill 980 good-paying jobs in southwestern Pennsylvania and harm competition in electricity markets at a time when prices are rising.
The Governor directed the Department of Environmental Protection to file a brief on behalf of the commonwealth with the PUC urging the commissioners to deny the merger request.
“This merger would be a great deal for Wall Street and Ohio, but terrible for Pennsylvania’s workers and consumers,” said Governor Rendell. “Wall Street’s investors would benefit to the tune of $2 billion, but Pennsylvania could lose nearly 1,000 jobs and our consumers would have fewer choices because there’d be less competition to keep electricity prices low.
The Governor said the driving force behind the merger was clearly articulated by Allegheny Energy President and CEO Paul Evanson during his Sept. 15 presentation at the Barclays Capital 2010 CEO Energy Conference in New York: “We’ll cover over 70 percent of the land mass in the state of Pennsylvania…We’ll be the largest (utility) in the state….We like to be in a dominant position in a state and think we will be that in Pennsylvania.”
The Governor said because FirstEnergy and Allegheny Energy are now competitors working to produce and distribute energy at the lowest possible price, a merger would reduce competition and create an electrical behemoth that would further increase the already-rising electric rates paid by families, employers, local governments and schools.
Merger-related job losses would be most severe in southwestern Pennsylvania. If the merger is permitted, the new company will be headquartered in Akron, Ohio, threatening well-paying jobs at Allegheny Energy’s Greensburg, PA, headquarters.
In addition to increasing consumer costs and adding to unemployment, a review of the merger application shows that it lacks any positive environmental effects, energy efficiency incentives or increases in renewable energy – all of which are needed to help Pennsylvania grow its economy, the Governor added.
