Pennsylvania Power & Light Co. will file a response by mid-June with the Federal Energy Regulatory Commission to a recent request by 16 municipal customers to disallow PP&L from collecting potential "stranded costs" from the municipal customers.

"We still are reviewing and analyzing the recent filing made by the municipal customers and intend to file a detailed written response with the FERC," said John Sipics, PP&L's general manager of Power Systems Support. "We also intend to have further discussions with the customers on the issue of stranded costs."

The term "stranded costs" is used to define various costs that were incurred by electric utilities because of regulation that may not be recoverable in a future competitive market. The FERC's recent rulemaking on "open access" to promote wholesale competition allows utilities to recover stranded costs under certain conditions.

The municipal customers purchase electricity wholesale from PP&L and then distribute it to retail customers in the municipality. The municipalities are Lansdale, Blakely, Catawissa, Duncannon, Ephrata, Hatfield, Kutztown, Lehighton, Mifflinburg, Olyphant, Perkasie, Quakertown, St. Clair, Schuylkill Haven, Watsontown and Weatherly.

PP&L has contracts to supply electricity to the municipal customers that expire in 1999. In their FERC filing, the municipal customers request that after their contracts with PP&L expire, PP&L shouldn't be allowed to charge a yet-undetermined stranded investment charge if the municipal customers buy their power from other sources.

"PP&L is assessing its plan for open access charges in light of the recent FERC order on wholesale competition," Sipics said. "The recent FERC ruling sets forth standards for addressing the stranded cost issue and we will evaluate it under those guidelines."