In a motion filed July 16, Pennsylvania Power & Light Co. asked the Federal Energy Regulatory Commission to revoke the status of Schuylkill Energy Resources, Inc., as a qualifying cogeneration facility.

Approval of the request would permit PP&L to lower the rate PP&L pays the Schuylkill County independent power producer for electricity the company sells to PP&L.

"PP&L believes that, since January 1990, its ratepayers have been bearing about $800,000 each month in excess charges for electric power because Schuylkill and its corporate affiliate, Reading Anthracite, have erroneously claimed the favored status of 'cogenerator,' " said Jesse Dillon, PP&L counsel. "As a result, PP&L alleges that its 1.2 million ratepayers have paid Schuylkill more than $55 million to which it is not entitled."

Under federal law, electric utilities like PP&L are required to buy power from independent power producers like Schuylkill Energy. PP&L customers pay the cost of the energy purchases through the Energy Cost Rate on electric bills.

Under the terms of the contract between PP&L and Schuylkill, if the plant operates as an anthracite culm-fired cogeneration facility, Schuylkill is entitled to a higher payment from PP&L for its electricity.

To qualify for the higher rate, Schuylkill needs to send some of the power plant's thermal output, or steam, to Reading Anthracite, which then needs to use the steam to dry coal silt that will be sold.

"In its motion, PP&L contends that Reading Anthracite failed to dry the amount of silt required in each calendar year as required by the FERC's 1986 and 1992 orders," Dillon said. "The evidence demonstrates dramatically lower numbers for tons of silt actually dried and sold."

PP&L is asking the commission to determine that Schuylkill never complied with cogeneration qualification requirements.

Along with ending the higher rate payments, PP&L is seeking to recover the excess money paid to Schuylkill through a state court action pending in Lehigh County, Pennsylvania.