Press Release

    "With this settlement, the restructuring phase of Pennsylvania’s initiative in electric competition is largely over," said John M. Quain, chairman of the PUC. "Pennsylvanians may now look forward to the benefits of a truly competitive market in electric generation."

    The parties signing the settlement include the Office of Consumer Advocate and the Office of Small Business Advocate.

    Under the settlement:

• The rate cap on transmission and distribution charges will be extended six months, from June 30, 2001, to December 31, 2001;
• The rate cap on generation charges will be extended an additional year, from the end of 2005 to the end of 2006;
• Penn Power will forego the deferral and future rate recovery of certain universal service costs;
• Approximately two-thirds of Penn Power customers will be able to select an alternative electric generation supplier during 1999 and 2000. The remaining one-third will be able to choose on Jan. 1, 2001;
• The utility will fund a Customer Assistance Program at $500,000 in 1999, increasing to $1.61 million in 2002;
• Funding to the Low Income Usage Reduction Program will increase from its current level of $180,000 to approximately $645,000 in 2002;
• Penn Power will be allowed to recover $236 million in stranded costs over seven years;
• Customers will receive a system-average shopping credit of 3.63 cents per kilowatt-hour in 1999; and
• Penn Power and other parties agree to withdraw all legal challenges.

    Today’s vote will be issued as a tentative order to allow parties to the case to submit comments. All comments must be received by close of business on April 14. The PUC issued Penn Power’s restructuring order on July 22, 1998, but the utility appealed the ruling to the state Commonwealth Court.

    The New Castle-based Penn Power serves approximately 145,000 customers in western Pennsylvania.

    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 1-888-PUC-FACT.