CITIZEN POWER Clean Air Council

Public Policy Research Education and Advocacy

FOR IMMEDIATE RELEASE Contact: David Hughes

July 19, 2001 412/421-6072

Joseph Otis Minott, Esq

215/567-4004

CITIZEN POWER AND CLEAN AIR COUNCIL APPEAL PUC DECISION

FIRSTENERGY-GPU MERGER AND RATE ORDERS ILLEGAL

PITTSBURGH, July 19/PRNewswire—Pittsburgh based Citizen Power and Philadelphia based Clean Air Council today filed a joint appeal in Pennsylvania Commonwealth Court seeking a reversal of the Pennsylvania Public Utility Commission’s June 20 Orders approving the FirstEnergy-General Public Utilities (GPU) merger and granting GPU POLR [Provider of Last Resort] cost relief.

The “Petition for Review” cites multiple PUC violations of law and regulatory code, asserting that “The Stipulation and Merger Orders are not supported by substantial record evidence, reflect arbitrary and capricious abuse of administrative discretion, violate the 1998 GPU Restructuring Settlement, are contrary to applicable law, and/or violate the United States and Pennsylvania Constitutions.”

“Twice as many parties opposed this Settlement as signed it,” said David Hughes, Executive Director of Citizen Power. “It’s clear that the PUC was desperate to find a way to help GPU. The PUC approved the merger without requiring the Companies to meet their burden of proof that it would be in the public interest. The PUC also granted GPU rate relief even though the Company created its own problems,” Hughes said.

The Council and Citizen Power are very concerned that, if approved, this Settlement could lead to further degradation of Pennsylvania air quality. “FirstEnergy has a number of power plants that emit pollutants at many times the levels of modern plants, and they intend to crank them up to meet GPU customer demand if the merger is consummated,” said Joseph Otis Minott, Esq, Executive Director of Clean Air Council. “Given that the prevailing winds run west to east, this poses a health risk to Pennsylvanians and to the state’s ability to meet the federal health standard for ozone.”

Clean Air Council is a signatory party to the 1998 GPU Restructuring Settlement. “The Commission’s Orders violate the Restructuring Settlement without agreement of the parties to it,” said Michael Fiorentino, attorney for Clean Air Council. “The Council must challenge a decision which siphons funding from the Sustainable Energy Fund.”

Roger Odisio, economist with Citizen Power calls the PUC’s approval of the POLR side of the Settlement “a short term fix done by taking money owed to NUGs [non utility generators] and using it to pay GPU’s POLR costs. But the deal is contingent on the merger being consummated. If the merger is abandoned or disapproved by the New Jersey Board of Public Utilities, despite all the headlines to the contrary, customers are likely to be on the hook for hundreds of millions of additional dollars,” Odisio said.

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