Allegheny Power 2010 Annual Report Download - page 42

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27
Revenues –
Total revenues increased $198 million in 2009 compared to the same period in 2008. This increase primarily resulted
from the OVEC sale and higher unit prices on affiliated generation sales to the Ohio Companies and non-affiliated
customers, partially offset by lower sales volumes.
The increase in reported segment revenues resulted from the following sources:
Increase
Revenues by Type of Service 2009 2008 (Decrease)
(In millions)
Non-Affiliated Generation Sales:
Retail $ 778 $ 615 $ 163
Wholesale 669 718 (49)
Total Non-Affiliated Generation Sales 1,447 1,333 114
A
ffiliated Generation Sales 2,843 2,968 (125)
Transmission 73 150 (77)
Sale of OVEC participation interest 252 - 252
Other 122 88 34
Total Revenues $ 4,737 $ 4,539 $ 198
The increase in non-affiliated retail revenues of $163 million resulted from increased revenue in both the PJM and MISO
markets. The increase in MISO retail revenue is primarily the result of the acquisition of new customers, higher unit
prices and the inclusion of the transmission related component in retail rates previously reported as transmission
revenues. The increase in PJM retail revenue resulted from the acquisition of new customers, higher sales volumes and
unit prices. The acquisition of new customers in MISO is primarily due to new government aggregation contracts with 60
area communities in Ohio that will provide discounted generation prices to approximately 580,000 residential and small
commercial customers. Lower non-affiliated wholesale revenues of $49 million resulted from decreased sales volumes in
PJM partially offset by increased capacity prices, increased sales volumes in MISO, and favorable settlements on
hedged transactions.
The lower affiliated company wholesale generation revenues of $125 million were due to lower sales volumes to the Ohio
Companies combined with lower unit prices to the Pennsylvania companies, partially offset by higher unit prices to the
Ohio Companies and increased sales volumes to the Pennsylvania Companies. The lower sales volumes and higher unit
prices to the Ohio Companies reflected the results of the power procurement processes in the first half of 2009 (see
Regulatory Matters – Ohio). The higher sales to the Pennsylvania Companies were due to increased Met-Ed and
Penelec generation sales requirements supplied by FES partially offset by lower sales to Penn due to decreased default
service requirements in 2009 compared to 2008. Additionally, while unit prices for each of the Pennsylvania Companies
did not change, the mix of sales among the companies caused the overall price to decline.
The following tables summarize the price and volume factors contributing to changes in revenues from generation sales:
Source of Change in Non-Affiliated Generation Revenues
Increase
(Decrease)
(In millions)
Retail:
Effect of 8.6% increase in sales volumes $ 53
Change in prices 110
163
Wholesale:
Effect of 13.9% decrease in sales volumes (100)
Change in prices 51
(49)
Net Increase in Non-Affiliated Generation Revenues $ 114