Press Release

PUC OKs PPL Plan to Provide Default Service After Rate Caps Expire

Published on 5/10/2007

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today approved PPL Electric Co.’s Revised Competitive Bridge Plan that allows the company to begin purchasing generation supplies over the next three years for use after the expiration of a current generation rate cap.                                                                                                   

The Commission voted 3-1 to approve a motion by Vice Chairman James A. Cawley that included reconciliation requirements, additional reporting requirements for the company and consumer protections. Chairman Wendell F. Holland issued a dissenting statement.

The Revised Competitive Bridge Plan is designed to provide a transition from capped rates to prevailing market prices for default electric generation service for PPL consumers. Currently, PPL consumers are paying capped generation rates and will continue to do so until the end of 2009.

The plan includes:

• Issuing two contracts per year through 2009 to meet the default service generation needs for 2010;
• Enhancing several Demand Side Management (DSM) programs including customer incentives to shift load from on-peak to off-peak periods;
• Notifying those consumers representing the top 10 percent of peak load in each customer class about the availability of DSM programs; and
• Implementing a customer education program to inform consumers about the end of the rate caps, the Competitive Bridge Plan and opportunities to shop for an alternate electric generation supplier.

The 1996 electric competition law requires electric companies such as PPL, or a Commission approved alternative supplier, to provide default electric generation service to customers who have not selected an alternative generation supplier.

The generation rates were capped as a part of the law and settlement agreements reached during those restructuring proceedings. After the expiration of the rate caps, the default service prices for electric generation service are required to reflect “prevailing market prices,” according to the law.

The Commission’s role is to ensure that the process utilities use to achieve the default service electricity generation prices – such as the Competitive Bridge Plan – reflects prevailing market prices. The generation prices are not set by the PUC, but rather are determined by the wholesale market, over which the PUC exercises no jurisdiction.

PPL filed the Competitive Bridge Plan Aug. 6, 2006. The plan was revised following separate stipulations between the company, Reliant Energy Inc., the Commission’s Office of Trial Staff, the state’s Office of Consumer Advocate, Constellation NewEnergy Inc., Constellation Energy Commodities Group Inc., Citizens for Pennsylvania’s Future and the Sustainable Energy Fund of Central Eastern Pennsylvania.

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities to ensure safe and reliable utility service at reasonable rates; protect the public interest; educate consumers to make independent and informed utility choices; further economic development; and foster new technologies and competitive markets in an environmentally sound manner. For recent news releases, or more information about the PUC, visit our Internet homepage www.puc.state.pa.us.

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P-00062227

Contact:

• Press Secretary
  717-787-5722