FirstEnergy Subsidiary Signs Power Purchase Agreement with PPM Energy for Wind Power in PA
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December 18, 2006
Akron, Ohio — FirstEnergy Corp. (NYSE: FE), today announced that its FirstEnergy Solutions subsidiary has entered into an 23-year agreement to purchase the 34.5 megawatts (MW) of output from the Casselman Wind Power Project, which is being developed in Somerset County, Pennsylvania, by PPM Energy, ScottishPower's (NYSE: SPI) competitive U.S. energy business.
Construction for the Casselman project, located about 60 miles southeast of Pittsburgh near the towns of Meyersdale and Rockwood in Somerset County, will begin this summer and is scheduled to be completed by the end of 2007. It is expected to feature 23 wind turbines rated at 1.5 MW each.
"This partnership is part of the new clean energy industry taking shape in Pennsylvania — one that promises to enhance security, ensure fuel price stability, generate economic growth, create jobs and improve the environment," said Pennsylvania Department of Environmental Protection (DEP) Secretary Kathleen A. McGinty, who also serves as chairperson of the Pennsylvania Energy Development Authority.
"This project builds substantially on our accomplishment of being a leader on the East Coast for wind energy production," Secretary McGinty said. "Pennsylvania will continue to invest energy dollars at home to put residents to work, and we will continue to support renewable energy markets that increasing the demand for environmentally friendly electricity generation."
"We are pleased to have reached an agreement with one of the leaders in the wind power market," said Guy Pipitone, senior vice president, Operations Strategy & Development, of FirstEnergy. "This agreement will bring our total amount of wind power contracts to 464.5 MW - positioning FirstEnergy to become one of the largest renewable energy suppliers in our region."
"PPM Energy is delighted to enter into an agreement with such a strong company as FirstEnergy as we expand into Pennsylvania, which has one of the most progressive Renewable Portfolio Standards in the nation," said PPM Energy CEO Terry Hudgens.
"Somerset County is pleased to see a $61 million dollar investment in our county. Multiple local businesses will participate in this development project which will assist in maintaining family-sustaining jobs in Somerset County," said James Marker, Chairman, Board of Commissioners, Somerset County, Pennsylvania.
The Casselman project — which encompasses almost 2,000 acres - was awarded a grant from PA DEP because it will utilize several hundred acres of reclaimed surface mine areas. In addition, the project received a production incentive grant from the TRF Sustainable Development Fund. The actual footprint of the turbines uses less than two percent of the total acreage. It is expected to create approximately 60 jobs during construction and three to four full-time jobs in the community once it becomes operational.
FirstEnergy is a diversified energy company headquartered in Akron, Ohio. Its subsidiaries and affiliates are involved in the generation, transmission and distribution of electricity, as well as energy management and other energy-related services. Its seven electric utility operating companies comprise the nation's fifth largest investor-owned electric system based on serving 4.5 million customers in Ohio, Pennsylvania and New Jersey; and its generation subsidiaries control nearly 14,000 megawatts of capacity.
PPM Energy now has more than 2000 megawatts of wind energy in operation or under construction. The strength of its renewable project pipeline has allowed the company to increase its 2010 target by more than 50 percent to at least 3,500 megawatts developed or controlled by PPM Energy. PPM Energy balances its supply portfolio with sales to wholesale customers, placing almost all of its output in long-term contracts. Major customers include the cities of Seattle, Sacramento, Eugene, Pasadena, and Anaheim as well as investor-owned utilities such as Xcel Energy and Pacific Gas & Electric Company and the federal Bonneville Power Administration. PPM Energy also creates innovative new products to meet customer needs, such as operations and maintenance services and build-to-sell project development.
Forward-Looking Statements: This news release includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements typically contain, but are not limited to, the terms "anticipate," "potential," "expect," "believe," "estimate" and similar words. Actual results may differ materially due to the speed and nature of increased competition and deregulation in the electric utility industry, economic or weather conditions affecting future sales and margins, changes in markets for energy services, changing energy and commodity market prices, replacement power costs being higher than anticipated or inadequately hedged, the continued ability of our regulated utilities to collect transition and other charges or to recover increased transmission costs, maintenance costs being higher than anticipated, legislative and regulatory changes (including revised environmental requirements), and the legal and regulatory changes resulting from the implementation of the Energy Policy Act of 2005 (including, but not limited to, the repeal of the Public Utility Holding Company Act of 1935), the uncertainty of the timing and amounts of the capital expenditures needed to, among other things, implement the Air Quality Compliance Plan (including that such amounts could be higher than anticipated) or levels of emission reductions related to the Consent Decree resolving the New Source Review litigation, adverse regulatory or legal decisions and outcomes (including, but not limited to, the revocation of necessary licenses or operating permits, fines or other enforcement actions and remedies) of governmental investigations and oversight, including by the Securities and Exchange Commission, the United States Attorney's Office, the Nuclear Regulatory Commission and the various state public utility commissions as disclosed in our Securities and Exchange Commission filings, generally, and with respect to the Davis-Besse Nuclear Power Station outage and heightened scrutiny at the Perry Nuclear Power Plant in particular, the timing and outcome of various proceedings before the Public Utilities Commission of Ohio (including, but not limited to, the successful resolution of the issues remanded to the PUCO by the Ohio Supreme Court regarding the Rate Stabilization Plan) and the Pennsylvania Public Utility Commission, including the transition rate plan filings for Met-Ed and Penelec, the continuing availability and operation of generating units, the ability of generating units to continue to operate at, or near full capacity, the inability to accomplish or realize anticipated benefits from strategic goals (including employee workforce initiatives), the anticipated benefits from voluntary pension plan contributions, the ability to improve electric commodity margins and to experience growth in the distribution business, the ability to access the public securities and other capital markets and the cost of such capital, the outcome, cost and other effects of present and potential legal and administrative proceedings and claims related to the August 14, 2003 regional power outage, the successful completion of the share repurchase program announced August 10, 2006, the risks and other factors discussed from time to time in our Securities and Exchange Commission filings, including our annual report on Form 10-K for the year ended December 31, 2005, and other similar factors. We expressly disclaim any current intention to update any forward-looking statements contained herein as a result of new information, future events, or otherwise.