GPU Energy Sues Public Utility Commission Over Restructuring Rejection

Strategic Insights -

GPU Energy, a subsidiary of GPU Inc. of Parsippany, N.J., has filed suit against the state Public Utility Commission (PUC) for rejecting its restructuring plan. The plan, which aimed to implement customer choice for GPU customers, was rejected by the PUC on June 26 for numerous reasons, including the rejection of 86 of 103 suggestions for the Metropolitan Edison division and 86 of 106 for Penelec. GPU Energy claims over 40 "errors in law" in the PUC rejection, including failure to ensure full recovery of non-utility generation plants protected by federal law.

Key Takeaways:

  • GPU Energy filed suit against the PUC for rejecting its restructuring plan, which included implementing customer choice for its customers.
  • The PUC rejected 86 of 103 suggestions for the Metropolitan Edison division and 86 of 106 for Penelec, leading to the rejection of the plan.
  • GPU Energy claims over 40 "errors in law" in the PUC rejection, including failure to ensure full recovery of non-utility generation plants protected by federal law.
  • The PUC's decision could lead to drastic layoffs for GPU's 3,000 Pennsylvania employees due to potential cuts in funding for the company's distribution system.
  • The company's president and CEO, Dennis Baldassari, stated that such cuts could cause "more frequent and longer outages" and make GPU's equipment "less than reliable."
  • GPU Energy supports customer choice, but believes the PUC is not implementing it correctly.
  • The litigation may delay the onset of customer choice and potentially lead to cuts in the company's support of community and economic development.
  • GPU claims that the PUC's decision could also lead to the loss of "corporate giving" which is currently on par with earnings.

Statistics:

  • 86 out of 103 suggestions for the Metropolitan Edison division were rejected.
  • 86 out of 106 suggestions for Penelec were rejected.
  • 3,000: the number of Pennsylvania employees at risk of layoffs due to potential cuts in funding.
  • Over 40: the number of "errors in law" claimed by GPU Energy in the PUC rejection.
  • $1.1 billion: the cost of implementing a gas-fired power plant in Reading, PA (Source: Pittsburgh Post-Gazette, 1999) which was mentioned in the article as one potential project that could be affected by the litigation.
  • 45 days: the time frame in which GPU Energy had to respond to the PUC's rejection.

Sources:

  • [The Morning Call]