PUC Approves PP&L Restructuring Plan

The Public Utility Commission this week approved by a 4-0 vote the restructuring plan for Pennsylvania Power & Light Company.

Under the plan approved today, PP&L will provide customers who shop for their electricity a system average shopping credit of 3.73 cents per kWh beginning in January 1999. Shopping credits will vary from one rate class to another and will increase over time to match anticipated increases in the market price of generation.

The plan allows PP&L to collect $2.9 billion in stranded costs over eight and one-half years, starting in January 1999, through a competitive transition charge. The Electricity Generation Customer Choice and Competition Act of 1996 allows utilities to collect stranded costs that the PUC finds to be just and reasonable.

The PUC directed that one-third of PP&L customers will be able to buy power from the supplier of their choice on Jan. 1, 1999, another third on Jan. 2, 1999, and the remainder on Jan. 2, 2000.

Starting in 1999, PP&L will unbundle its rates to reflect separate prices for the generation charge, the competitive transition charge, and transmission and distribution charges. While generation will be open to competition, PP &L will continue to provide transmission and distribution services to its customers at PUC-regulated rates.

The Allentown-based PP&L serves 1.2 million customers in eastern and central Pennsylvania.