Ed Rendell has stepped in to block the merger of Greensburg electric
utility Allegheny Energy with Akron, Ohio-based FirstEnergy by directing
the Department of Environmental Protection to file a brief with the
Public Utility Commission opposing the deal.
"This merger would be a great deal for Wall Street and Ohio, but
terrible for Pennsylvania's workers and consumers," Mr. Rendell said in a
statement released Tuesday morning.
The governor said the merger would reduce electricity competition and
increase electric rates, and that it could cost the state nearly 1,000
PUC spokeswoman Jennifer R. Kocher said that since the Department of
Environmental Protection was already a party to the merger case, having
filed to be an intervenor on June 14, the agency "more than likely"
would have filed a brief even without the governor's specific direction.
According to the schedule that has been established for the case, she
said, administrative law judges should make their recommendation on
whether or not to approve the merger by the end of the year, with the
PUC's decision likely to come early next year, after Mr. Rendell has
The PUC began evidentiary hearings on the case Tuesday in Harrisburg.
The hearings are expected to continue the rest of the week.
Allegheny Energy and FirstEnergy responded to Mr. Rendell's
announcement with a statement noting that "several groups concerned with
jobs and economic growth in Pennsylvania have publicly supported the
merger," including the International Brotherhood of Electrical Workers
and the PA Economic Development Association.
The release also said FirstEnergy "has delayed hiring in order to
accommodate Allegheny Energy employees, and will look for ways to
provide additional career opportunities."
David Hughes, executive director of Citizen Power, a public policy research organization, was not impressed.
Citizen Power is also an intervenor in the case, and Mr. Hughes said
the companies' response, like the merger proposal itself, falls short of
providing the assurances needed regarding competition, environmental
concerns and jobs.
"'Finding other career opportunities' sounds like you're going to lay people off and try to find other jobs for them," he said.
Noting that merger proposals typically result in PUC-approved
settlements between the companies involved and intervenors, he said that
in the negotiations now in progress, "parties have made proposals, but
the companies haven't been very cooperative."
"It's hard to measure the governor's statement in terms of impact" on
the negotiations, he said. "But in terms of whether he's correct or
not, we think he's right on target."