Press Release

HARRISBURG, Pa. – State regulators today approved the merger of GPU Energy and FirstEnergy Corp., but postponed a decision on GPU’s request to raise rates.

The Public Utility Commission (PUC) said GPU could merge with Akron, Ohio-based FirstEnergy, provided the companies agreed to certain conditions, including not charging customers for costs associated with the merger and maintaining current levels of community support programs for a set period of time. The vote was 5-0 on a motion by Commissioner Terrance J. Fitzpatrick. (Link to motion.)

In the same motion, the commission voted 4-1 to convene a collaborative meeting on the rate request, directing parties to the case to meet beginning May 29 to negotiate a settlement. Commissioner Nora Mead Brownell dissented. (Link to Brownell statement.)

"We’re holding in abeyance the request for rate cap relief in order to afford the parties an opportunity to resolve that issue in a commission-facilitated collaborative," Fitzpatrick said. "It is in the best interest of the utilities, other parties to the case and consumers that we continue to discuss this issue and work together to reach an amicable settlement."

The PUC has effectively used collaborative settlement talks in the past to resolve divisive issues. Fitzpatrick said the talks will conclude no later than June 20 and, whether the collaborative is successful or not, the PUC will issue a final decision no later than July 13.

In approving the merger, the commission stated that it must be beneficial to both GPU ratepayers and Pennsylvania.

"The public utility code clearly states that mergers must bring substantial, affirmative benefits to consumers, and that benefits to the companies alone do not provide sufficient evidence for approval," Fitzpatrick said. "While the merger is expected to create synergies and efficiencies that may improve the operations of the GPU companies, these factors alone would not support a finding that the merger is in the public interest.

"Thus, the conditions are critical to our approval of the merger," he said.

To ensure that customers continue to receive reliable service, the new merged company may not withdraw GPU’s transmission facilities from the operational control of the PJM Interconnection without the PUC’s approval. It would also have to implement a service quality index to measure and improve, where necessary, GPU’s reliability and service quality.

The new company must also accept the GPU code of conduct and provide training and educational materials about the code of conduct to employees within 30 days of the effective date of the merger.

To ensure the state benefits from the merger, GPU would be required to maintain its current level of community support programs and economic development initiatives for three years following the merger.

Because the merger proposal did not identify potential job losses, the PUC is requiring the companies to submit a detailed plan of anticipated job cuts within 60 days of the effective date of the merger to ensure that Pennsylvania does not face a disproportionate share of job cuts.

The companies have 30 days from the entry date of today’s order to notify the PUC if they accept the merger conditions.

For more information about the PUC and additional press releases, visit our website at http://puc.paonline.com.