PP&L, Inc. today (6/26) asked the state Public Utility Commission to reconsider its final order in the company's restructuring case under the electric competition law.
The PUC order had stated that the company could recover $2.864 billion in transition costs which the company said was an "unfair" determination of legitimate costs to be recovered. Additional adjustments in the final ruling indicate that recovery would, in actuality, be limited to $2.569 billion. Both numbers are significantly less than the $4 billion a PUC administrative law judge had determined was justified.
PP&L, Inc. Chairman, President and CEO William F. Hecht said the disparity in the numbers was a "solid reason" for the reconsideration petition. In making the request, PP&L Inc.'s petition noted significant errors in the final order and asked the PUC to re-examine its methodology and calculations.
"We remain committed to moving forward with the initiative to offer choice of electricity supplier to all Pennsylvanians," said Hecht.
"With this request, we are asking the PUC to correct serious errors that adversely impact PP&L, Inc.'s financial strength and our ability to be a strong electric supplier in Pennsylvania."
Hecht said that while PP&L, Inc. is taking the formal action of asking the PUC to reconsider its decision, the company also is considering other challenges to the order including litigation in state and federal courts.
"We have no wish to delay the transition to customer choice through court action, but we are really left with no alternative if the PUC fails to correct the mistakes in its order," said Hecht.
In a 23-page filing that lays out the details of the errors in the PUC order, PP&L, Inc. is asking the commission to make a decision on its reconsideration request by July 9.
In a related request filed earlier this week, the company asked the commission to extend the July 6 deadline for PP&L, Inc.'s compliance filing, a document that would detail the company's plan for carrying out the PUC restructuring order.
Hecht said the details of the PUC restructuring order, which were received by the company in written form on June 15, are even more injurious to the company than those announced by the PUC at its public meeting on June 4.
In its reconsideration request, the company asks the PUC to take the following actions regarding its June 15 order:
-- Correct errors in data regarding the company's current rates, energy sales, proposed shopping credits and return rates applicable to the competition transition costs.
-- Reconsider a commission action that reduces PP&L, Inc.'s recovery of transition costs to reflect a decrease in depreciation expenses for the company's nuclear generating plant.
-- Correct an overstatement of the market value of the company's generating facilities.
-- Clarify the commission's order concerning the mechanism for recovery of nuclear decommissioning costs.
-- Remove a provision from its proposed code of conduct that would unfairly disadvantage the company's electricity supply business by requiring it to obtain regulatory approval for transactions with the regulated distribution side of PP&L, Inc.
"We have been a leader in the effort to bring electricity competition to Pennsylvania," said Hecht. "Even in the face of this clearly adverse decision which would have a serious impact on the financial strength of our company, we remain willing to explore alternatives that would result in a reasonable resolution of our differences with the commission and move the customer choice process forward. In this petition, we are asking the PUC to take steps in that direction."
If this effort does not work, however, Hecht said the company will go to court to protect the investment of its nearly 175,000 shareowners and to seek recovery of an appropriate level of transition costs.
"Since this process began, PP&L, Inc. has supported providing customers with the opportunity to shop and reduce the prices they pay for electricity," said Hecht. "But there must be sound judgment in the process, judgment based on the circumstances of the company involved. A one-size-fits-all approach is unfair and negatively impacts PP&L, Inc., which has prices below the national average and second lowest in the state."