Public Policy Research Education and Advocacy



FOR IMMEDIATE RELEASE                                            Contact:  David Hughes

September 23, 2000                                                                                412/421-6072

                                                                                                               Harvey Reiter






PITTSBURGH, Sept. 13/PRNewswire/--Citizen Power, a regional watchdog organization, announced today that it will appeal the Public Utilities Commission of Ohio (PUCO) decision reaffirming its approval of FirstEnergy's transition plan.


        Under the transition plan approved by PUCO, FirstEnergy is permitted to count as "competitive" switches any customers who transfer their accounts from FirstEnergy to its wholly owned subsidiary, First Energy Services, an entity that will sell electricity to these customers from the same power plants now used to serve them. This procedure will allow FirstEnergy to qualify for 100 percent recovery of hundreds of millions of dollars in “stranded costs”, costs for which it would be at risk if such "switches" did not count toward a 20% statutory switching threshold.  Citizen Power made the observation that a utility does not compete with its wholly owned subsidiary and that counting such intracorporate transfers would thwart the intentions of the Ohio legislature in passing its landmark restructuring legislation.


        The PUCO order issued today dismisses Citizen Power's objections with the terse conclusion that, if the legislature had intended to preclude it from counting switches to an affiliate it would have "defined switching to exclude affiliated suppliers."


        "I am greatly disappointed by the Commission's order," said David Hughes, Executive Director of Citizen Power. "It means higher costs for consumers with no real increase in competitive choice. It seems to me a matter of plain common sense, that when the legislature spoke about competitive ‘switches’, it could not have meant that utilities could treat switching of customers within the FirstEnergy corporation as proof that competition was working."


        The order also rejected Citizen Power's arguments that FirstEnergy should not be allowed

to exclude "nearby" suppliers’ access to the 1120 megawatts of "jump start" generation capacity, and that FirstEnergy must give up control of the transmission lines to an independent operator before competition starts. "PUCO failed to respond to a single argument we made on these important issues”, said Hughes. “For example, and this is critical, you can’t have competition when one competitor controls access to the market. This just shows that PUCO is more interested in having pseudo competition begin in January, no matter what the long term cost to ratepayers", added Hughes.


        "Citizen Power does not believe PUCO's orders are logically supportable and it intends to go to court", said Harvey Reiter, attorney for Citizen Power. "We feel confident that, on review of PUCO's orders, the court will reject PUCO's decision as unsupported and direct it to consider

the critical adverse effects of the FirstEnergy plan for competition in northern Ohio."