Allegheny reduces trading exposure with contract sale

Maryland-based Allegheny Energy has reduced its exposure to energy trading by selling an energy supply contract to a subsidiary of Goldman Sachs for $405 million.

The company’s Allegheny Trading Finance unit signed an agreement in Augustto sell its energy supply contract with the California Department of Water Resources(CDWR) and associated hedge transactions to J Aron & Company. The sale priceis subject to adjustment based both on changes in the mark-to-market value atclosing and on the number of trades to be assumed by J Aron.

Debt reduction
Allegheny says it will use proceeds from the sale to reduce debt, improve liquidity and fund the cost of

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