PPL Montana said Thursday (5/25) that legal action announced by a state Public Service Commissioner is groundless and an unfortunate waste of resources.

"We know of absolutely no basis or precedent for legal action that would provide for state regulation of PPL's energy sales in Montana," said Brad Spencer, PPL Montana vice president and chief operating officer. "In fact, we are convinced that any such action is unconstitutional."

Commissioner Brad Molnar said Thursday he would pursue legal action to force the PSC to reverse a 1999 action that approved federal control over PPL Montana's power plants.

Spencer said that in 1999 the Federal Energy Regulatory Commission granted the plants "exempt wholesale generator" status and the authority to sell electricity produced at market-based rates. Previously, the Montana PSC had approved this status for PPL Montana's plants.

FERC renewed PPL's market-based rate authority just last week.

"We understand the members of the public and public officials are concerned about rising electricity prices, but undertaking baseless legal action will do nothing to solve the problem," said Spencer. "Rather, this action will result in an unfortunate waste of state resources."

Spencer said a PSC reversal of its 1999 vote would do nothing to change the fact that sales from PPL's Montana power plants are regulated by FERC, not by the Montana PSC.

"As a member of the Montana business community, we also are very concerned that this action sends a very bad message about the wisdom of making the investments in the state, investments that are key to economic development and jobs," said Spencer.

PPL will decide a specific course of action after it has had an opportunity to review the court filing in detail, Spencer said.

PPL Montana, a subsidiary of PPL Corporation (NYSE: PPL), has electric generating facilities throughout the state with a combined generating capacity of about 1,200 megawatts. PPL Montana has offices in Billings, Butte and Helena and employs 500 people. The company operates coal-fired power plants at Colstrip and Billings, as well as 11 hydroelectric power plants along Rosebud Creek and the Missouri, Madison, Clark Fork and Flathead rivers. PPL EnergyPlus, another PPL subsidiary, operates a trading floor in Butte that markets and sells power in the wholesale energy market. More information about the company is available at www.pplmontana.com.