ALLENTOWN, Pa. — A competitive electricity marketplace in Pennsylvania moved a step closer to reality Tuesday (10/1), when Pennsylvania Power & Light Co. unveiled a program that would provide more than 54,000 customers with an opportunity to choose their electricity supplier as early as next summer.

"This pilot program will provide our customers with an important opportunity to work with us and tell us more about their needs in a competitive electricity marketplace," said William F. Hecht, PP&L's chairman, president and chief executive officer.

PP&L, the first state utility to file a customer choice pilot program, is asking the state Public Utility Commission to approve its plan by April 1. If the PUC approves, PP&L customers could begin selecting their electricity supplier in July. "PP&L is calling on all Pennsylvania utilities to propose similar pilots to ensure that customers statewide have real choices," Hecht said.

"The program we are filing today is a significant information- gathering component of the effort to provide all customers with the opportunity to select their electricity supplier. We continue to believe that it is possible to have a fully competitive electricity marketplace by the end of this decade — or sooner," said Hecht.

"Deregulation of the electricity generation portion of the utility business would result in customers paying lower prices, over time, than they would be under a regulated system," Hecht said.

He said PP&L has designed its pilot to test limited elements of a more competitive electricity marketplace — mainly the process of customers' selection of an electricity supplier.

If the proposal is approved by the PUC, beginning in April PP&L will recruit customers to participate in the program. About 5 percent of the company's customers will have the opportunity to pick the company that generates their electricity. PP&L also will notify outside generation suppliers of the opportunity to participate in the pilot. Transmission and delivery of the electricity to customers' homes will continue to be provided by PP&L.

"Customers who choose to participate will help everyone learn more about the operation of a more competitive electricity marketplace," said Hecht. "Part of our proposal is a tracking and assessment process that will provide important information as we design the full-scale transition to a competitive marketplace."

Hecht said he is encouraged by the growing interest in customer choice, especially in Pennsylvania. "We are seeing increased support over a wide spectrum and we are anxious to get started with this pilot to gain more important information, particularly about customer communications needs," he said.

Here are some of the specific elements of the program that PP&L presented to the commission:

• About 48,000 PP&L residential customers would be given the opportunity to participate, along with about 6,000 of the company's commercial and industrial customers.
• If more customers volunteer than can be accommodated in any class of customers, those to participate in the pilot will be selected at random.
• Customers selected to participate would have the right to choose their electricity supplier from a number of companies. PP&L will issue an invitation to suppliers that wish to participate in the pilot.
• Suppliers would need PUC approval before participating in the pilot.
• Other utilities would be able to offer electricity to PP&L customers if those utilities allow PP&L to offer electricity to their customers.
• To permit "shopping" during the pilot program, PP&L will offer approximately a 2-cent per kilowatt-hour credit to customers. If a supplier is offering electricity at less than 2 cents per kilowatt-hour, the customer can save money. Hecht said PP&L is convinced that electricity will be available at less than 2 cents per kilowatt-hour.
• The pilot would run through Dec. 31, 1998.

"After we get a response from the PUC on our proposal, we will communicate more details of the pilot program to all our customers. This pilot, combined with the pilots that we hope other utilities will propose, will create real progress toward customer choice," said Hecht.

PP&L is a subsidiary of PP&L Resources, Inc. Other PP&L Resources subsidiaries include Power Markets Development Co., an international independent power company; and Spectrum Energy Services, which markets energy-related services and products.

Following this news release is a fact sheet containing additional information on PP&L's competition pilot program.

Additional information -- including the complete details of this proposal and recent PP&L statements on competition -- are available at PP&L's Internet site (http://www.papl.com.) or by calling (610) 774-5894 to receive fax copies.

Video and audio newsfeeds on this announcement, featuring William F. Hecht, are available. The video newsfeed will be available for download at these satellite coordinates between 2 p.m. and 2:30 p.m., EST: Satellite SBS6, Transponder 17, Frequency 12120, Polarity Horizontal. The audio feed is available by calling 1-800-322-9272.

PP&L Competition Pilot

Fact Sheet

• 54,346 customers will be eligible for the pilot. Represents 5 percent of average retail peak load, about 256 megawatts.
• 47,700 residential customers will be selected; 6,600 General Service customers; 39 primary customers; 7 transmission/substransmission.
• Public Utility Commission approval is required for the pilot to begin. If approved as filed, pilot would run from April 1, 1997, through Dec. 31, 1998. PP&L would begin seeking participants April 1. — Customers will be able to shop for energy. When the pilot begins, PP&L will continue to provide capacity, all back-up services and customer service. In the future, pilot participants may have the opportunity to shop for other services as well.
• As pilot begins, customers will be offered approximately a 2-cent per kilowatt-hour credit. The 2-cent per kwh credit will be offset by the cost of the purchases from an alternative supplier so that customer bill reflects electricity-purchase savings.
• Customers will apply by June 1. If a certain class is over- subscribed, participants will be randomly selected. Participants will be notified of their selection by July 1.
• Participants may leave the pilot at the end of any billing cycle. Those who leave may not re-enter. If a customer class is under-subscribed, an eligible customer may enter the program at the beginning of any billing cycle.
• Another Pennsylvania utility or its affiliate may participate as a supplier in PP&L's pilot if it offers PP&L the right to participate in its pilot.
• Suppliers must file evidence of financial and technical fitness with the PUC and obtain PUC approval to participate.
• During the pilot period, PP&L will evaluate the pilot to assess the program and identify strengths/weaknesses.