Press Release

PUC Orders Large Utilities to Provide Information on Pension Plan Funding

Published on 2/5/2009

Filed under: Electric Gas Water and Wastewater Telecommunications Transportation and Safety

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today ordered all large utilities under its jurisdiction to provide information related to the funding of defined benefit pension plans.

“Attention has been focused on the impact that the declining stock market may have on utility pension plans.  In the utility industry, significant funding increases may be necessary to bring these pension programs to acceptable funding levels,” said Commission Vice Chairman Tyrone J. Christy. “In that event, questions arise as to what effect the need for this funding could have on the cost of capital, capital budgets, day-to-day operations, service and rates paid by utility consumers.”

The Commission voted 4 -0 to approve a motion by Vice Chairman Christy that requires all larger jurisdictional utilities that are subject to ongoing management audits by this Commission to provide information related to the funding of defined benefit pension plans. Commissioner Wayne E. Gardner recused.

The information requested from utilities includes:

An explanation as to how compliance with the requirements of the Pension Protection Act of 2006 will be accomplished;

A summary of its recent pension plan obligation including the measurement date, the Fair Value of the Plan Assets, the Accumulated Benefit Obligation and the Projected Benefit Obligation; and

An explanation of any actions the company is taking to address the recent activity in the financial markets as it relates to the pension plan.

The utilities have 60 days from entry of the Commission Order to file the information with the PUC.

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, audio of select Commission proceedings or more information about the PUC, visit our Web site at www.puc.state.pa.us.

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