Press Release

HARRISBURG, Pa. – The state Public Utility Commission (PUC) voted today to defer judgement on GPU Energy’s request to collect more than $82 million in wholesale power costs from customers and to consolidate the request with the company’s application to merge with First Energy Corporation.

The PUC is expected to vote on the merger of GPU with Akron, Ohio-based First Energy in May.

GPU asked the PUC in November for permission to collect from customers in future years more than $82 million in projected losses from purchasing wholesale electricity. The company has since indicated its losses in 2001 could exceed $145 million.

GPU cannot recover the costs because it agreed to a rate cap as part of its restructuring under electric competition. The PUC capped rates for GPU and other utilities at 1997 levels in exchange for allowing utilities to collect stranded costs from customers. Stranded costs are utility assets that have little value in a competitive market.

Under GPU’s 1998 restructuring settlement, generation rates for customers are capped through 2010 for Met-Ed customers and 2009 for Penelec customers. The two companies are subsidiaries of GPU.

PUC Chairman John M. Quain said consolidating the two requests would give GPU extra time to better explain why it should be allowed to break the rate caps. The electric competition law lists specific circumstances under which utilities can petition the PUC to raise rates above the established caps.

Pennsylvania’s Electric Choice Program is widely recognized as the most successful and best run in the country, having saved customers nearly $2.8 billion to date in guaranteed rate cuts and savings. More than 550,000 customers have selected an alternative electric supplier under the program.

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