While it is still reviewing the details of Thursday's (5/14) Public Utility Commission non-binding poll in its restructuring case, PP&L,Inc. said it is extremely disappointed in the commission's position on recovery of transition costs.

"We understand -- and support -- the need to balance the interests of customers, shareowners, generation suppliers and others in these proceedings," said Robert J. Grey, PP&L's senior vice president and general counsel."We believe, however, that a final commission order along the lines discussed at today's meeting would fail to achieve such a balance and would be inconsistent with the state's Customer Choice Act."

A motion adopted by the commission Thursday stated that PP&L would be permitted to recover about $2.864 billion in transition costs over an eight-and-one-half-year period. The company had requested permission to recover $4 billion.

"A final commission order along these lines would be blatantly unfair to the shareowners of a company that has among the lowest rates in Pennsylvania and was one of the strongest proponents of providing customers with choices in their electricity suppliers," said Grey.

"Today, PP&L customers buy electricity at essentially the same prices that they paid in 1986. Considering inflation, customers actually have experienced a 40 percent reduction in prices over the past dozen years," said Grey. "Given our long-term record of low prices, there clearly is no reason for the commission to reduce the company's transition cost recovery.

"A final order such as this could jeopardize PP&L, Inc.'s financial strength and prove counterproductive to the interests of the commonwealth by hampering the company's ability to provide high-quality service to customers and to continue our active support of community and economic development," said Grey.

He said PP&L's restructuring filing was conservative and would have resulted in shareowners paying for an estimated $500 million in transition costs. Based on Thursday's commission motion, shareowners would be forced to absorb more than $1.8 billion.

Based on projected electricity prices, PP&L estimates its transition costs at about $4.5 billion. Grey stressed that transition costs flow from legitimate company expenses, part of which were incurred to comply with state and federal laws regarding taxes and the purchase of electricity from independent power producers. The remainder of these transition costs, he said, are the result of power plant construction expenditures, which were previously judged to be prudent by the PUC and have been in the company's rates for more than a decade.

Grey said the company still is reviewing the various aspects of Thursday's commission action and it may have additional comments after that review is complete.

The commission is expected to take final action on the company's restructuring plan June 4.