Press Release

Also Allows All PP&L Residential Customers to Choose in 1999

    Harrisburg, Pa. - Calling it an important step on the path to full electric choice, the Pennsylvania Public Utility Commission (PUC) today reached an agreement with Pennsylvania Power & Light (PP&L) in which the utility will sell capacity to suppliers serving residential customers at a fixed price in 1999. In addition, the utility will allow 100 percent of its residential customers to shop for electricity in 1999.

    As a result of this agreement, the PUC voted 5-0 today to withdraw a prior Interim Order as to PP&L.

    "These two actions, combined, will provide a vital jump start for the competitive residential electricity market in PP&L’s territory," said PUC Chairman John Quain. "The agreement will provide increased shopping opportunities for a greater number of PP&L customers."

    At issue is the price suppliers must pay for installed capacity through the Pennsylvania-New Jersey-Maryland (PJM) regional power pool, based in Valley Forge, Pa. Utilities own capacity - one component of wholesale electricity - and sell it to suppliers doing business in the PJM region. The suppliers, in turn, sell the electricity at the retail level to consumers.

    Under today’s agreement, PP&L agrees to sell installed capacity to electricity suppliers that serve PP&L residential customers at $19.72 per kilowatt (kw)-year in 1999, providing a boost to the developing residential retail sales market. In addition, PP&L will give all its residential customers the opportunity to shop for electricity as of January 2, 1999. Originally, two-thirds of PP&L’s residential customers would have had the option.

    "We’re very pleased that PP&L and the PUC have been able to work cooperatively to find a timely solution to this issue," said PUC Chairman John Quain. "This is another step toward attracting electricity suppliers into the state and establishing a robust electricity market in Pennsylvania."

    Last month, the PUC received complaints that capacity was not available, or it was being priced above economically justified prices, thereby preventing potential suppliers from entering the marketplace. Consequently, in a September 21, 1998, order, the PUC reiterated its position that the price of capacity that utilities charge electricity suppliers should reflect the $19.72 per kw-year charge contained in utility restructuring proceedings.

    PP&L challenged the order in federal court, claiming that the pricing of capacity is regulated by the Federal Energy Regulatory Commission. Under the settlement, PP&L agrees to dismiss its federal lawsuit. In turn, the PUC today voted 5-0 to modify its September 21, 1998, interim order in regards to PP&L.

    For recent news releases, or more information about the PUC, visit our Internet home page: http://puc.paonline.com. Additional information on electric competition can be found at www.electrichoice.com or by calling 888-PUC-FACT.

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