CITIZEN POWER
Public Policy Research Education and Advocacy
FOR IMMEDIATE RELEASE Contact:
David Hughes
June 12, 2001 412/421-6072
CITIZEN POWER REFUSES TO SUPPORT ANTI COMPETITIVE
SETTLEMENT; DEAL PROVIDES COMPANY WITH “CLOSETED” REVENUE INCREASE AND CRUMBS
FOR RENEWABLE ENERGY
PITTSBURGH, June 12/PRNewswire—The proposed
settlement filed yesterday at the Pennsylvania Public Utility Commission by
FirstEnergy and General Public Utilities is a bad deal for GPU ratepayers, for
competition and for the environment, according to David Hughes, Executive
Director of Citizen Power, a utility watchdog organization. In comments to be
filed tomorrow, Citizen Power will urge
the PUC to reject this settlement proposal and protect ratepayers and Pennsylvania’s
fledgling competitive electricity market.
The
settlement proposal, signed by only a few of the parties to the FirstEnergy-GPU
merger and GPU rate cap relief cases, is designed to decide the case that has
the Commission in a predicament. It appears that the Governor and the PUC do
not want to grant the company’s request for a rate increase that would break
the deregulation price cap, but they fear for GPU’s financial status if the
merger is not consummated. The PUC is to vote on the case on Thursday.
“The
Governor and notable others have made it clear they wanted the promised
benefits of deregulation to be preserved,” said David Hughes. “This deal gives
FirstEnergy tremendous market power in Pennsylvania, while letting its
proponents claim that it does not break the price cap. This claim is not true.
GPU customers are going to pay higher bills if this settlement is approved,”
said Hughes.
The
settlement includes language that lets FirstEnergy and GPU collect some, or
all, of the difference between the costs of buying power and what it can charge
it’s customers. This increase will be hidden from ratepayers because it will be
collected through the “transition” charge on their bills. The actual “stranded
costs”, supposed to be collected through the transition charge, will be
deferred and collected from ratepayers beginning in 2010.
“GPU
voluntarily chose to sell all of it’s generating capacity, so if it has to pay
increased prices for wholesale power, (known as “Provider of Last Resort
(POLR)) that is a bill it’s shareholders should eat,” said Hughes. “It is
outrageous to charge ratepayers again for the company’s mistakes and Citizen
Power refuses to be part of this,” Hughes said.
FirstEnergy
has agreed to provide $15 million for renewable energy projects, but will
completely control $10 million of the spending. “This is not a ‘green’ company.
They cannot be trusted to spend this money on legitimate renewable energy
projects,” said Hughes. “Citizen Power is not going to support a settlement
that gives FirstEnergy the ability to limit competition and green power
development in Pennsylvania,” continued Hughes.
“If
the merger fails for any reason, the settlement terms get worse,” said Roger
Odisio, economist with Citizen Power. “GPU will not have to wait until 2010 to
collect its POLR costs. GPU ratepayers will pay all of GPU’s POLR costs
incurred beginning June 1, 2001, with only the precise timing yet to be worked
out,” concluded Odisio.