This article is about the electric utility. For other uses of Allegheny, see Allegheny (disambiguation).
Allegheny Energy (AYE) is an electric utility company that owns and operates electric generation facilities and delivers electric services to customers in Pennsylvania, West Virginia, Maryland and Virginia. Allegheny Energy generates in excess of $3 billion annually and serves 1.5 million customers with approximately 9,670 megawatts (MW) of electrical generating capacity, enough to power around 7.5 million homes. 
Electric utility companies are under increasing pressure, in the form of government legislation, to adopt cleaner electricity generation methods while maintaining competitive prices. AYE, with its easy access to cheap coal in Pennsylvania, West Virginia and Ohio, derives over 95% of its energy from burning coal and is investing over $1 billion over the next several years to retrofit its coal powerplants with technology to reduce toxic emissions. AYE currently does not have plans to substantially diversify its electricity generation base by making forays into nuclear, wind and solar power projects. Beyond the 1090MW derived from hydroelectric power currently, AYE is in the process of pursuing permits for a limited use of bio-mass and waste-tire derived fuel at two of its coal power plants in West Virginia.
In 2009, AYE generated a net income of $392.8 million on $3.43 billion in total revenues. This represents a 0.65% decrease in net income on a 1.2% increase in total revenues from 2008.
Allegheney operates through two reportable business segments:
Prices for fossil fuels, the key energy input for greater than 95% of AYE’s electrical output, are volatile. The prices of coal, natural gas, and other fossil fuels all affect AYE's expenses.
Growing political awareness of the risks of global warming is resulting in increasing governmental pressure for utility companies to reduce emissions. AYE, which generates more than 90% of its energy using coal and none from nuclear power is particularly vulnerable to "greener legislation". The company has announced no plans to increase its nuclear capacity although AYE is pursuing permits to allow for the use of bio-mass (wood chips and saw dust) and waste-tire derived fuel at two of its coal-fired power plants in West Virginia.
Like all utility companies, Allegheny's distribution services are still regulated by state governments. While this regulation places limits on distribution costs that can be added to electricity bills, it also ensures that the distribution companies have a service monopoly over the areas they serve.
This is no longer the case on the generation side of the business and AYE and its new parent, FE, face competition from a number of generation companies in the Northeast and Midwest. Most notable among these companies are American Electric Power Company (AEP), Duke Energy Corporation (DUK), Entergy (ETR), Exelon (EXC) and Public Service Enterprise Group (PEG).