Allegheny Power 2014 Annual Report Download - page 6

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SETTING A NEW COURSE FOR OUR
COMPETITIVE BUSINESS
In the face of evolving competitive markets, we took proactive
steps to reposition our competitive generation business,
with a focus on reducing our exposure to risk and pursuing
higher-margin sales while leaving a portion of the generation
we produce available to capture future market opportunities.
As part of our repositioning efforts, we are limiting our
exposure to weather-sensitive demand in mass market and
certain commercial and industrial (C&I) sales channels. We
intend to maintain our sales efforts to attract strategic,
large C&I customers whose demand for electricity is mostly
unaffected by weather. We also are continuing sales to
Ohio governmental aggregation communities and pursuing
wholesale power auctions where opportunities align with our
generation portfolio. Both of these channels produce positive
margins and involve minimal customer acquisition costs.
We believe this strategy will better position us to benefit from
opportunities as markets improve while limiting the risk from
continued challenging market conditions.
As we pursue this new strategy, we also remain vigilant in our
efforts to prudently manage capital expenditures across our
generating fleet. For example, at our Beaver Valley Nuclear
Power Station, we deferred from 2017 to 2020 a planned
Unit 2 reactor head and steam generator replacement after
determining the unit can continue to operate safely and
reliably.
We’re confident that these and other actions have placed our
competitive business in a more stable position, enabling us to
assess market conditions and participate when, and where,
opportunities are most promising.
Our new Waldo Run transmission substation in
Doddridge County, W.Va., supports the area’s
Marcellus shale gas industry and enhances
service reliability for Mon Power customers.
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