Power problems (deregulation) not limited to CA
Customers who shopped for new electricity suppliers under the Pennsylvania's ``Customer Choice'' program began returning to the company in February, 2000 and are doing so again this winter, resulting in an increased load of 175 megawatts, GPU explained.
Under the ``Provider of Last Resort'' rules established under the state's energy restructuring plan, the company is required to supply these customers with electricity.
Since it was unable to contract ahead for this power, GPU pointed out, it has to be purchased in the open market at prices substantially higher than the company is permitted to charge its customers.
GPU has to purchase the electricity because the company's power plants were sold as part of the deregulation plan.
In early December, GPU Energy asked the Pennsylvania Public Utility Commission to defer for future collection power costs exceeding what its subsidiaries -- Metropolitan Edison and Pennsylvania Electric, both of which are doing business as GPU Energy -- are allowed to recover through rates set by the commission.
That petition pointed out the sale of its provider of last resort obligation, which was proposed by the commission's rules, failed last spring when no suppliers submitted qualifying bids.
On Friday, responding to requests from others for the commission to dismiss GPU Energy's December filing, the company asked the commission for interim relief, saying California's "experience demonstrates that substantial impairment of earnings and a substantial loss of cash flow will most assuredly follow if wholesale supply costs continue to skyrocket out of control.
``In order to avoid a similar situation in Pennsylvania, a reasonable deferral mechanism should be established before these financial impacts substantially deteriorate the company's financial health,'' the company's statement said.
Also pending before the Pennsylvania commission is a request for approval of GPU's planned merger with FirstEnergy Corp. (NYSE:FE - news) . That transaction, approved by shareholders of both companies in November, would create the sixth largest U.S. electric distribution system, serving 4.3 million customers between Toledo, Ohio, and the New Jersey shore.
biz.yahoo.com |
