25-year company veteran takes a top role with Allegheny Energy
Another "interim" executive is assuming a leadership position at Allegheny Energy Inc., as the Hagerstown, Md.-based energy company struggles to get back onto solid financial footing.
Effective immediately, David C. Benson, a 25-year veteran of Allegheny Energy, is interim executive vice president of the company's generating and trading operation, Allegheny Energy Supply, which is based in Monroeville.
Benson replaces Michael P. Morrell, president of the unit, who will be taking advantage of the company's early-retirement option after he resolves what has become a controversial situation involving the sale of power to the state of California through its Department of Water Resources.
"As a 25-year veteran of Allegheny Energy, Dave's knowledge and years of experience are true benefits to our company," Jay S. Pifer, Allegheny Energy's interim president and chief executive, said in a statement. Pifer assumed temporary command of the company when Alan J. Noia retired earlier this year.
Allegheny Energy does business in western Pennsylvania as Allegheny Power and serves 600,000 customers statewide.
The dispute with California revolves around how much the state should pay for power. The contract's worth is pegged at roughly $4.5 billion, but California has protested vigorously that Allegheny Energy, among other power providers, took advantage of the state in early 2001 when it had to buy power at any price. California, in fact, is trying to renegotiate some $43 billion in power pacts with roughly two dozen suppliers.
News of Morrell stepping down was not a shock to analysts. "I had been expecting that he would leave, but I'm glad that he's staying around to handle the California situation," said Chris Ellinghaus, an energy analyst who follows Allegheny Energy for Williams Capital Group, New York. Ellinghaus has a buy rating on the company's stock and does not own any.
One analyst said that he had heard from enough Allegheny Energy investors that Morrell had to go, that he was considered part of the old regime which got the once conservative, old-line utility into hot water by expanding into high-powered energy trading, among other things, too quickly just as a number of factors converged -- including the Enron Corp. debacle -- to cripple the industry.
Ellinghaus estimates that coming to an amenable agreement with California could take from one to six months. He surmises that Benson was being groomed for his new position over the last few months, and that with his background in generation he was the right person for the temporary position.
