Press Release

Includes Guaranteed Rate Cuts & Full Phase-In for 1999

    Harrisburg, Pa. ¾ Calling restructuring settlement talks with GPU a hard-fought but balanced solution for both customers and stockholders, the Pennsylvania Public Utility Commission (PUC) today voted 3-0 to tentatively accept a settlement agreement with GPU Energy. The settlement includes guaranteed rate cuts for customers, greater opportunities to cut costs for customers who shop, and the ability for all customers to shop in 1999.

    "Through the tentative approval of this settlement, Pennsylvania takes yet another step toward bringing greater certainty to the marketplace," said PUC Chairman John Quain during today’s special public meeting. "We are grateful for the hard work and spirit of compromise exhibited by the parties in reaching the settlement of these two cases. We look forward to the comments of all interested parties prior to making a final determination next month."

    Under the settlement signed earlier today, Metropolitan Edison (Met-Ed) customers will receive a guaranteed 2.5 percent rate cut and Pennsylvania Electric Company (Penelec) customers will receive a 3.0 percent guaranteed rate cut in 1999, whether the customers shop for electricity or not. The rate cuts are in addition to the savings customers may realize if they shop for electricity. Met-Ed and Penelec are subsidiaries of New Jersey-based GPU.

    Because of the settlement, the dates for which GPU customers will receive customer choice enrollment information have been modified. GPU will send notification letters to successfully enrolled customers no later than Oct. 23. The Customer Choice packet will include a How To Shop Guide; a list of licensed suppliers who have told the PUC they will serve GPU residential customers, complete with phone numbers and web addresses; a chart for customers to calculate their savings; and a price to compare figure. Customers save money when they purchase electricity for less than the price to compare figure. Customers who select a supplier by Dec. 1, 1998, will see the savings on their January 1999 bills.

    Also signing the settlement today was the International Brotherhood of Electrical Workers; Mid-Atlantic Power Supply Association, representing generation suppliers; rural electric cooperatives; Office of Consumer Advocate; and Office of Small Business Advocate.

    Other provisions of the settlement agreement include:

• A greater opportunity to save money for customers who shop. Today’s settlement increases Met-Ed’s average price to compare figure from 3.757 cents per kilowatt-hour (kWh) to 4.35 cents per kWh, and boosts Penelec’s from 3.73 cents per kWh to 4.404 cents per kWh. Actual prices to compare will vary by customer rate class. Customers save money when they purchase electricity for less than the price to compare;

• Allowing 100 percent of GPU customers to shop for power on January 1, 1999 - two years sooner than required by law;

• Extending a rate cap on transmission and distribution charges through December 31, 2004 - three and one-half years beyond the period required by the Electric Competition Law;

• Extending a rate cap on electricity purchased from GPU, as the supplier of last resort, by five years until 2010. This is important for customers who do not shop for power;

• Recovery of $658.14 million in stranded costs over 12 years for Met-Ed. Penelec will collect $332.16 million in stranded costs over 11 years. Both amounts include full recovery of the above-market costs of government-mandated contracts to buy electricity from non-utility generators. Also, these stranded cost calculations may later be adjusted to reflect the actual proceeds resulting from the companies’ planned divestiture of generation assets;

• An option for customers to choose another licensed supplier to provide metering services beginning Jan. 1, 1999, and billing services beginning Jan. 1, 2000;

• Establishing a sustainable energy fund for the development and use of renewable energy and clean energy technologies. Met-Ed will contribute $5.7 million in 1999 and Penelec $6.4 million in 1999;

• Providing $2.7 million in 1999 in assistance and energy conservation programs for low-income customers of Met-E

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    717-787-5722