Pennsylvania Power & Light Co. Thursday (5/22) proposed a compromise approach on a planned customer choice pilot program that it hopes will keep the process moving forward in the Commonwealth.

"We are a leading proponent of providing Pennsylvania customers with the opportunity to choose the company that generates their electricity," said Paul Russell, PP&L's associate general counsel. "We are concerned that the Public Utility Commission's preliminary order and subsequent hearings and litigation could delay the pilot program, hindering our progress toward providing customers with choices in their electricity supplies."

Russell said that PP&L believes that some aspects of the PUC's May 9 preliminary order on the pilot programs are inconsistent with the Customer Choice Act passed by the state legislature late last year.

"While we believe that the preliminary order has serious flaws, we are willing to compromise on some of the important issues to keep the process moving forward. The alternative plan we propose addresses the issues raised by the PUC and would avoid the need for hearings and litigation," said Russell.

As part of its compromise proposal, PP&L offers to:

• Increase its average pilot credit from 2.77 cents per kilowatt-hour to 3.2 cents per kwh.
• Permit pilot participants to switch electricity generation suppliers on a monthly basis.
• Drop certain minimum requirements and fees for electricity suppliers.
• Work with the PUC to obtain required Federal Energy Regulatory Commission approval of transmission rates proposed in the pilot program.

"The improvements that we are proposing today in our alternative plan could cost PP&L an estimated $8.2 million on an annual basis. Even though we think the pilot program that we proposed to the PUC previously was equitable, we are proposing these additional incentives to keep the process moving — and avoid a protracted debate over how we should conduct these pilot programs," said Russell.

Under PP&L's proposal, customers would have the opportunity to begin volunteering to participate in the pilot program beginning this summer. Electricity would begin flowing from alternative suppliers beginning in October.

The pilot program is part of the transition from today's regulated electricity marketplace to a competitive one. As early as Jan. 1, 1999, one-third of Pennsylvanians will have the opportunity to select the company that generates their electricity. A second third would be offered choice as early as Jan. 1, 2000, and all customers could have choice by Jan. 1, 2001.

Under the Customer Choice Act, the state's current electric utilities will continue to provide delivery services — distribution of electricity to homes and businesses throughout the Commonwealth.

The act also calls for pilot programs to provide electricity companies and up to 5 percent of their customers with practical experience with the process. About 250,000 customers throughout the state will be offered the opportunity to participate. About 54,000 PP&L customers will have that opportunity.

PP&L plans to offer competitive electricity supplies to customers in its current service territory and to customers throughout Pennsylvania.