Saying that the decision in its restructuring case leaves it no alternative, PP&L, Inc., announced Wednesday (7/15) that the company is appealing the order and is challenging the state Public Utility Commission's action in state and federal courts.

William F. Hecht, PP&L, Inc.'s chairman, president and chief executive officer, said the company is filing three actions on Wednesday:

• An appeal of the PUC restructuring order to Pennsylvania Commonwealth Court, which asks that the court reverse specific PUC decisions, including the use of an inappropriate market price forecast, the establishment of an excessive shopping credit and arbitrary extension of the customer choice transition period.
• A suit in Pennsylvania Commonwealth Court asking the court to halt implementation of the state's Customer Choice Act because the PUC has misinterpreted and misapplied the act.
• A suit in U.S. District Court in Allentown asking the court to halt implementation of the act because it violates federal law and the U.S. Constitution.

"The court actions we are taking today are very selective and are intended to resolve the issues in dispute between PP&L, Inc., and the PUC in a businesslike fashion," Hecht said. "We do not take these actions lightly, nor are we filing these cases to be contentious. Given the current restructuring order, however, it is necessary that we take these steps to achieve an appropriate balance among stakeholders as the industry moves to a competitive marketplace."

Hecht added that the company had previously informed the commission that it would be filing the court actions.

Despite the necessity of these court challenges, Hecht said that PP&L, Inc., is not backing away from its support of competition in the electricity business. "We remain committed to providing customers the benefits of choice and we plan to discuss alternatives to the current order with the PUC and other parties in settlement meetings that are scheduled to begin tomorrow," he said.

Hecht said that the current PUC order jeopardizes the financial health of PP&L, Inc., and that it inappropriately burdens the company's shareowners, many of whom live in Pennsylvania. He also said the order could prove detrimental to the employees of PP&L, Inc., and to the company's community and economic development efforts.

The commission's actions in the state's restructuring cases, Hecht said, also have favored Pennsylvania's high-priced electricity suppliers over those that have a history of keeping customer rates low.

"The commission has ignored the fact that PP&L, Inc., customers pay 40 percent less for electricity than customers in Philadelphia," said Hecht.

"PP&L, Inc., has been a friend to the Pennsylvania electricity consumers. We have provided the highest quality service at prices that are the same today as they were in 1986. And, we supported customer choice because competition provides the opportunity for all customers to enjoy the service and prices that companies like PP&L, Inc., can provide. The PUC actions, however, have the potential to seriously injure the companies that have done the best job of serving customers," said Hecht.

The PUC administrative law judge who heard the case had recommended that the company be permitted to recover $4 billion. PP&L, Inc., has said previously that the commission order would permit the company to recover only about $2.569 billion in transition costs.

Hecht emphasized that transition costs largely flow from required compliance with state and federal laws regarding taxes and the purchase of electricity from independent power producers. Other transition costs, he said, are the result of power plant construction expenditures to meet the needs of PP&L's customers. These costs were previously approved by the PUC for inclusion in the company's rates.