Press Release

PUC Considers a Retail Aggregation Bidding Process for Pike County Customers, Establishes Expedited Process for Review

Published on 4/6/2006

Filed under: Electric

HARRISBURG, Pa. – The Pennsylvania Public Utility Commission today approved an expedited process to evaluate a proposed retail aggregation bidding program for the Pike County Light & Power service territory.

        “The price spike in Pike County is an unintended consequence of the world energy situation and reflects the volatility of the overall energy market,” said Commission Chairman Wendell F. Holland. “Today, we have laid the ground work for a deliberative process that makes every effort to allow the market – rather than regulation – to improve this situation for consumers, employers and community organizations. We are moving expeditiously through this process while being cognizant of the need for due process.”

         “The Commission stresses its continued support for the development of wholesale competitive markets and its reliance on them in setting retail prices,” said Commission Vice Chairman James Cawley in a motion. “Undoubtedly, this proceeding highlights the multitude of issues that must be considered in this and future plans, particularly how best to address the potential for significant volatility in wholesale prices.”

            The Commission voted unanimously to establish the expedited review process of a proposed retail aggregation program. Retail aggregation programs pool electric consumers for the purpose of purchasing electric power collectively. Direct Energy Services LLC has proposed that an auction be held to determine who would administer such a program for Pike County Light & Power consumers.

            In order to allow all parties to the case to comment on the program and for the Commission to make an informed judgment, the Commission directed its Office of Administrative Law Judge (ALJ) to hold a hearing. The hearing will be held at 9 a.m. April 11 in Hearing Room 1 of the Commonwealth Keystone Building, Harrisburg.

            According to the Commission’s Tentative Order, all participating bidders must demonstrate the capability to serve residential consumers by indicating adequate staffing at service centers to field questions from residential consumers.

            The Commission plans to take final action on the program at its April 20, 2006, meeting with the winning competitive bidder being named April 28. If approved, consumers should begin to receive notifications and educational information from Pike County Light & Power and the winning aggregator in May.

            The Commission proceeding stems from unique circumstances that resulted in Pike County consumers experiencing unprecedented rate increases. The initial wholesale auction process for purchasing power for those consumers was impacted by many factors including the timing of the auction, which occurred during peak natural gas prices; minimal auction participants and no competitive retail activity in the area.

            The Pennsylvania Public Utility Commission ensures safe, reliable and reasonably priced electric, natural gas, water, telephone and transportation service for Pennsylvania consumers, by regulating public utilities and by serving as responsible stewards of competition. For recent news releases, or more information about the PUC, visit our Internet homepage www.puc.state.pa.us.

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Docket No. P-00062205

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