Under a tentative agreement reached Tuesday (10/3), Pennsylvania Power & Light Co. will purchase power from Paxton Creek Cogeneration Associates during periods of peak electricity use by customers.

The settlement, which must be approved by the state Public Utility Commission, resulted from negotiations to modify a 1985 contract and settle legal proceedings pending before the PUC. Those proceedings involve Paxton Creek's request that the PUC revise the 1985 contract and the related rate increase proposed by Harrisburg Steam Works Ltd.

Under the 25-year contract, PP&L purchased all of the electricity generated by Paxton Creek, a cogenerator that supplies steam to Harrisburg Steam Works Ltd.

"Under the terms of the settlement, PP&L will buy up to 900 hours of electricity generation at full output from Paxton Creek at times when customer demand for electricity, and the cost to produce it, are highest," said Frank Long, PP&L's executive vice president and chief operating officer.

"The cost for the electricity will be comparable to that of electricity from combustion turbines that run during peak periods of customer use," he added. "It's a settlement that benefits PP&L's customers by providing reliable and economical peak electric service as well as meeting the needs of Paxton Creek, Harrisburg Steam Works and the community.

"We are pleased to have reached a settlement that enables Paxton Creek to remain economically viable and benefits our customers by providing reasonably priced electricity to meet peak use."