PUC PECO DECISION A BAD PRECEDENT FOR ELECTRIC RESTRUCTURING

Pittsburgh, May 22—The Pennsylvania Public Utility Commission’s decision to overturn the Judge in the PECO restructuring case does not bode well for electric ratepayers in Pennsylvania, according to consumer and environmental watchdog group Citizen Power.

PECO sought PUC permission to “securitize” the $1.1 billion in “stranded” cost recovery the PUC awarded the utility. PECO has requested that it be able to recover nearly $6 billion of its investment in nuclear plant construction costs. The company wants to be able to borrow over $1 billion immediately and guarantee the loan with payments that its customers will have to make during the transition to a competitive market.

The PUC Administrative Law Judge called PECO’s plan a “train wreck” and recommended that the PUC delay a decision on the company’s request until the investigation into PECO’s transition plan is completed in December. The full commission disregarded Judge Louis Cocheres’ recommendation.

“This decision sends a clear signal to Pennsylvanians that this PUC intends to reward utilities for bad investment decisions,” said David Hughes, executive director of Citizen Power.

“There will be little competition if ratepayers have to bail out these nuclear utilities,” said Hughes.

“All the intervenor expert witnesses in the case presented evidence that supported Judge Cocheres’ finding,” Hughes continued. “This can only be considered a political decision by the commission, because it is certainly not based on the evidence.”

Duquesne Light has about $1.7 billion invested in the Perry 1 and Beaver Valley 2 nuclear units. Citizen Power is concerned that the PUC will do the same thing to Duquesne ratepayers when that utility’s restructuring case comes before the commission.

“Like PECO customers, we’re paying some of the highest rates in the country. If the PUC is going to force ratepayers to pay for uneconomic investments once they’re able to choose a new electric supplier, the savings will be too small to make it worth switching,” Hughes said. “Makes you wonder whom this so-called competition is really supposed to benefit,” Hughes concluded.

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