GPU files to recover purchased power costs from customers

Dec. 6, 2000—On behalf of its Pennsylvania utilities, GPU Inc. filed with the Pennsylvania Public Utility Commission to seek recovery from customers of purchased power costs, plus interest until 2003.

After restructuring in Pennsylvania, GPU�s utilities were only supposed to provide transmission and distribution service and not generation to its customers. But competitors showed little interest in serving its customers, and GPU had to continue serving them as �provider of last resort.�

A default service program for competitors to serve GPU�s customers never materialized, Ned Raynolds, spokesman for GPU says.

�The petition notes that the program for alternate suppliers to serve 20% of GPU�s provider of last resort obligation beginning last June failed when no suppliers submitted qualifying bids,� the company states in a release.

According to the Pennsylvania Office of Consumer Advocate, GPU lost only 4% of its residential customers and 9% of its commercial customers to alternative suppliers as of last summer.

GPU subsidiaries Pennsylvania Electric Co. and Metropolitan Edison Co. sold their generation as part of the restructuring agreements with state regulators during deregulation in Pennsylvania. GPU was supposed to end up as a holding company for transportation and distribution utilities. End use customers were supposed to buy electricity from other competitors entering the recently deregulated market.

�Without sources of electric generation, we incur significant costs to purchase power sometimes at wholesale electricity prices that are well above the costs that are recovered in their rates,� the company stated in a release.

�We�re still standing here,� says Ned Raynolds, spokesman for GPU. �But we don�t think we ought to lose our shirt being provider of last resort.�

GPU is proposing to the commission that a monthly tally be kept of the costs of purchased power and carrying costs. That bill, if not recovered in current rates, would then be recovered from customers in 2003. If the PUC grants the request, customer rates won�t go up immediately but will permit GPU to recover the costs later.

How often rates will be adjusted in the future to accommodate purchased power expenses is under discussion, Raynolds says.