FOR IMMEDIATE RELEASE Contact: Jeanne K. Clark
March 25, 1998 412/421-6072
Pittsburgh, March 25 – Two administrative law judges today agreed with Citizen Power and recommended that the Pennsylvania Public Utility Commission (PUC) deny the proposed merger between Duquesne Light (DQE) and Allegheny Power (APS). The judges also recommended that the PUC deny both companies much of their requests for bailing out their so-called “stranded costs,” the bad company investments which would have been passed on to electric customers in the form of high rates.
“This is a major victory for us all,” said David Hughes, Executive Director of Citizen Power. “Citizen Power told the judges that the merger would be bad for customers – and they agreed. We told the judges that the “stranded costs” were inflated and would result in high electric rates – and they agreed. We told the judges that the purpose of deregulation was to help not harm, electric customers – and they agreed. And we are hopeful that the PUC Commissioners will also agree and accept the judges’ recommendations.”
In the merger case, the judges said the merger would substantially increase the power of the companies, and would prevent customers from benefiting from competition. While refusing to agree to the merger, the judges did give the two companies 18 months to come up with a plan which would protect competition and customers and still complete the merger.
On the Allegheny Power case, the judges refused all but 16% of the proposed “stranded costs.” On the Duquesne case, the judges’ recommended a number of cuts to “stranded costs,” with the final amount still to be calculated. Of special note is the fact that the judges specifically rebuffed Duquesne’s attempt to bill customers for the costs of the Brunot’s Island and Phillips plants. Prior to deregulation, electric companies were forbidden to bill for such non-operating plants, yet Duquesne still attempted, without success, to push these plants into their “stranded costs.”
“When Citizen Power began fighting the merger and stranded costs, everyone told us not to bother – that we couldn’t stop the Bailout; we little guys just couldn’t win,” said Hughes. “But today’s decisions show that you can win against the ‘big boys’. We are stopping the Bailout! And if PUC agrees, the money will return to the customers, where it belongs.”
Citizen Power is a Western Pennsylvania public policy, advocacy and education group that fights for consumers and the environment through education and litigation. Since the legislature’s middle-of-the night passage of the 1996 Electricity Generation Customer Choice and Competition Act, Citizen Power has represented the rights of consumers to lower rates and clean, safe power.
- 30 -