<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 1, 1997
PP&L Resources, Inc.
___________________________________________________________________________
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-11459 23-2758192
___________________________________________________________________________
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
No.)
Pennsylvania Power & Light Company
___________________________________________________________________________
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-905 23-0959590
___________________________________________________________________________
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
No.)
TWO NORTH NINTH STREET, ALLENTOWN, PA. 18101-1179
___________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 610-774-5151
___________________________________________________________________________
(Former name or former address, if changed since last report.)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
On April 1, 1997, Pennsylvania Power & Light
Company ("PP&L" or "the Company") filed its restructuring
plan with the Pennsylvania Public Utility Commission
pursuant to the provisions of Pennsylvania's
Electricity Generation Customer Choice and
Competition Act (the "Act"). In this regard, the following
Exhibits are submitted herewith:
(c) Exhibits
99.1 A letter which the Company distributed to members
of the investment community on April 1, 1997,
describing the filing and the financial and
accounting implications of the Act for the
Company.
99.2 The Company's news release regarding the filing,
including an appended fact sheet.
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
PP&L RESOURCES, INC. AND
PENNSYLVANIA POWER & LIGHT COMPANY
By: /s/ R. E. Hill
R. E. Hill
Senior Vice President-Financial
(PP&L Resources, Inc. and Pennsylvania
Power & Light Company)
Date: April 2, 1997
<PAGE>
Exhibit 99.1
(Company logo appears here)
Pennsylvania Power & Light Company
Two North Ninth Street
Allentown, PA 18101
610/774-5151
John R. Biggar
Vice President - Finance
610/774-5613
FAX: 610/774-5106
April 1, 1997
Members of the Investment Community:
Re: PP&L's Restructuring Plan
In accordance with the provisions of Pennsylvania's
Electricity Generation Customer Choice and Competition Act
("Customer Choice Act"), Pennsylvania Power & Light Company filed
its Restructuring Plan with the Pennsylvania Public Utility
Commission on April 1, 1997. Under the provisions of the
Customer Choice Act, the PUC is required to take action on the
Restructuring Plan by the end of 1997.
The Restructuring Plan provides a framework for a
smooth transition from today's regulated prices to a marketplace
in which customers will have the ability to have direct access to
the generation supplier of their choice.
Calculation of Stranded Costs
Under the Customer Choice Act, the PUC is authorized to
determine the level of stranded costs for each electric utility
and provide a mechanism for recovery of an appropriate amount of
stranded costs in accordance with the standards established by
the Customer Choice Act. That mechanism is a non-bypassable
competitive transition charge ("CTC") to be paid by all PUC-
jurisdictional customers who receive transmission and
distribution service from the Company.
Stranded costs are defined in the Customer Choice Act
as "an electric utility's known and measurable net electric
generation-related costs, determined on a net present value basis
over the life of the asset or liability as part of its
restructuring plan, which would have been recoverable under a
regulated environment but which may not be recoverable in a
competitive generation market and which the Commission determines
will remain following mitigation by the electric utility."
The Restructuring Plan filed by the Company on April 1
includes a claim of $4.6 billion for stranded costs. As provided
in the Customer Choice Act, the categories of stranded costs are
comprised of:
1. Net plant investments and costs attributable to
existing generation plants and facilities, disposal of spent
nuclear fuel, retirement costs attributable to existing non-
nuclear generating plants and other transition costs,
including employee severance, early retirement, outplacement
and related costs for employees who are affected by changes
that are expected to occur as a result of restructuring of
the electric utility industry;
2. Prudently incurred costs related to the
cancellation, buyout, buydown or renegotiation of NUG
contracts; and
3. Regulatory assets and other deferred charges
typically recoverable under current regulatory practice and
cost obligations under PUC-approved contracts with NUGs.
The Company's calculation of $4.6 billion of stranded
costs is higher than previous public estimates published by other
firms for several reasons. Those estimates were not prepared in
accordance with the methodology required by the Customer Choice
Act. In addition, the public estimates excluded certain elements
of cost, such as fossil decommissioning costs, capital additions
to generating facilities over the remainder of their useful lives
and allocated administrative and general costs. Finally, the
Company is currently projecting a lower market price of
electricity than what was assumed in those estimates of stranded
costs.
The Company's estimate of stranded costs for the
Susquehanna nuclear plant and for its fossil generation plants
was calculated by comparing the annual revenue requirements under
a regulated environment for each generating plant with the annual
revenues that plant would be expected to receive from the sale of
its output using projected market prices of electricity developed
by an independent expert for each year beginning January 1, 1999
to the end of that plant's useful life. A PUC-jurisdictional
percentage was applied to the annual excess or deficiency. The
resulting stream of excesses or deficiencies was discounted to
present value using a discount rate of 7.92% -- the Company's
weighted after-tax cost of capital at December 31, 1996.
NUG stranded costs were determined by comparing the
difference between the contract cost of energy required to be
purchased from non-utility generators under contracts in place
(beginning January 1, 1999 through the end of the contract term)
and the projected market prices of electricity for the energy
required to be purchased under those NUG contracts. This
difference was adjusted for the PUC-jurisdictional portion and
discounted at the Company's weighted after-tax cost of capital to
determine the present value at January 1, 1999. Stranded NUG
costs also include the present value of payments occurring after
December 31, 1998 to buy out two NUG contracts.
The Company's calculation of stranded costs related to
regulatory assets is the present value at January 1, 1999 of the
PUC-jurisdictional portion of regulatory assets that relate to
generation. Among other things, these regulatory assets include
unrecovered energy costs, postretirement benefits other than
pensions, taxes recoverable, deferred Susquehanna operating and
carrying costs, retired miners' health care costs and voluntary
early retirement costs.
In determining the appropriate amount of stranded cost
recovery, the Customer Choice Act requires the PUC to consider
the extent to which an electric utility has taken steps to
mitigate generation-related stranded costs by appropriate means
that are reasonable under the circumstances. Mitigation efforts
undertaken over time prior to the enactment of the Customer
Choice Act are to be considered of equal importance by the PUC in
determining an electric utility's stranded costs as actions taken
after the passage of the Customer Choice Act.
PP&L's Mitigation Efforts
Mitigation describes any efforts by a utility to reduce
costs or increase revenues (other than by rate increases), both
historically and prospectively, and thereby reduce its stranded
costs. Historic mitigation refers to past efforts to reduce
costs and increase revenues. The effect of these historic
efforts is reflected in the level of a utility's current rates
and its corresponding level of stranded costs. Future mitigation
refers to prospective plans and efforts during the transition
period and thereafter to reduce costs or increase revenues, which
will further reduce a utility's stranded cost claim.
Utilities that have been successful in controlling
costs in the past will have lower current rates and
correspondingly lower stranded costs. Utilities, such as the
Company, have already accomplished significant mitigation by
controlling costs and have passed the benefits of lower costs
through to ratepayers over time.
Cost control and efficient management have been an
integral part of the Company's corporate culture for many years,
and it has done an outstanding job of controlling costs and
rates. The Company's efforts in this regard include
refinancings, O&M cost reductions, reductions in planned capital
expenditures, employee reductions, inventory reductions, improved
nuclear and fossil plant operations, buyouts of NUG contracts and
economic development initiatives.
The result of the Company's past mitigation efforts
have resulted in reasonable rates to customers. While it is not
possible to quantify the precise savings achieved through these
mitigation efforts, the success the Company has achieved can be
seen by viewing its rates in perspective over time and comparing
those rates to the rates of other utilities.
The Company's average rate in 1996 was 7.38 cents per
kwh, which is only slightly above the 1986 average rate of 7.34
cents per kwh after the Susquehanna Unit No. 2 rate case in 1985.
Adjusted for inflation, the Company's rates have declined by more
than 25% since 1986. Given the initial 54-month rate cap
contained in the Customer Choice Act, this real price decrease
will likely continue. Assuming that today's rates remain in
place through June 2001 and an annual inflation rate of 2.5%, the
Company's rates will have declined, in real terms, by about one-
third since 1986.
Based on the most recent available data, the Company's
rates are approximately 7% below the Pennsylvania average.
In addition to past mitigation efforts, the Company has
included in its Restructuring Plan additional cost reductions
designed to further reduce its stranded cost claim. These
efforts include the Company's planned reduction of capital
expenditures by $671 million over the five-year period 1996-2000
compared to the Company's 1995 budget for capital expenditures
over that five-year period. The Company has also projected about
$513 million of unspecified reductions of future O&M and
administrative and general costs.
With PUC approval, the Company recently concluded
arrangements for the buyout of a 100 megawatt NUG contract, and
the buyout of a second contract -- 18 megawatts -- is currently
awaiting approval by the PUC. These NUG buyouts are not
reflected in the Company's current rates and reduce stranded
costs by about $100 million.
In its 1995 rate case with the PUC, the Company filed
for, and was granted, the right to extend the lives of its
transmission and distribution plant. If the Company had used
those longer lives when the transmission and distribution
facilities were originally placed in service, the accumulated
depreciation for those facilities would have been less than what
is currently recorded on the Company's books. In its
Restructuring Plan, the Company proposes to take the $205 million
difference between the current actual accumulated depreciation
and the theoretical accumulated depreciation and transfer it to
the accumulated reserve for depreciation associated with the
Susquehanna station.
In total, the Company estimates that its future
mitigation efforts have resulted in a reduction in the Company's
stranded cost claim by over $1 billion.
Summary of Stranded Cost Calculations
As set forth in the Restructuring Plan filed with the
PUC on April 1, the Company's net mitigated stranded cost claim
is $4.6 billion, as summarized below:
Amount
Category of Stranded Cost (Millions of Dollars)
Nuclear Generation $2,852
Fossil Generation 718
NUG Contracts 657
Regulatory Assets 384
$4,611
Financial Implications of the Customer Choice Act
The ultimate impact of the Customer Choice Act on the
Company's financial health will depend on numerous factors.
These factors include:
1. The amount of stranded cost recovery approved
by the PUC, the PUC's overall treatment of the
Company's filing and the effect of the rate cap imposed
under the provisions of the Customer Choice Act;
2. The actual market price of electricity over
the transition period;
3. Future sales levels; and
4. The extent to which the regulatory framework
established by the Customer Choice Act will continue to
be applied.
Under the provisions of the Customer Choice Act, the
Company's rates to PUC-jurisdictional customers are capped at the
level in effect on January 1, 1997 through mid-2001 for
transmission and distribution services and through the year 2005
for generation customers. By applying the CTC proposed by the
Company in its Restructuring Plan (which is restricted by the
rate cap) through the year 2005, the Company anticipates
collecting $4,210 million of its stranded costs. Based on these
projections, the remaining $401 million would be reflected as
lower cash flow to the Company after the transition period than
would have occurred with continued regulated rates.
In this regard, it should be noted that the Company's
stranded cost claim included in the Restructuring Plan is based
on a projection of future market prices and assumes a significant
portion of the Company's stranded costs will be recovered by way
of increased market prices for electricity. This increase may or
may not occur. To the extent that the market price of
electricity does not increase as projected, the Company could be
placed at risk for a greater non-recovery of stranded costs.
In any event, it should be remembered that the estimate
of under-recovery has been calculated on a discounted cash flow
basis over 25 years and does not represent an estimate of an
exposure to an accounting write-off. If the Restructuring Plan
filed by the Company is accepted by the PUC, the Company will
have essentially the same amount of revenues through the end of
the transition period in 2005 that it would have had if today's
regulated rates had been continued over that period of time.
If the PUC permits full recovery of the Company's
stranded costs, including full recovery of all regulatory assets
and above-market NUG costs over the transition period, the
Company estimates that its net income over the transition period
would be reduced by about 5%.
However, the PUC may make adjustments to components or
assumptions included in the Restructuring Plan filed by the
Company that could have an adverse effect on the amount of the
CTC or the categories of stranded costs that are recoverable
through the CTC. As a result of these uncertainties, from an
accounting perspective the Company cannot determine whether and
to what extent it may be subject to a write-off or a reduction in
earnings until the PUC issues an order with respect to the
Restructuring Plan. Based on the substantial amounts involved in
the Restructuring Plan, should the Company be required to incur a
write-off, it could be material in amount.
SFAS No. 71
The Company believes that the Customer Choice Act
establishes a definitive transition to market-based pricing for
electric generation. This transition includes cost-of-service
based ratemaking during the transition period. In addition, the
Company's stranded costs will be collected through a non-
bypassable CTC. Based on this structure, the Company believes it
will continue to meet the requirements of Statement of Financial
Accounting Standard ("SFAS") No. 71 throughout the transition
period.
At the conclusion of the transition period, the Company
believes it will be at risk to recover its generation costs
through market-based revenues. At that time, the Company expects
to discontinue the application of SFAS No. 71 for the electric
generation portion of its business.
The Company understands that the Securities and
Exchange Commission has begun inquiries regarding the
appropriateness of the continued application of SFAS No. 71 by
utilities in states that have enacted deregulation legislation
similar to the Customer Choice Act. As discussed above, the
Company believes it currently meets and will continue to meet the
requirements to apply SFAS No. 71 during the transition period.
In the event that the SEC concludes that the current regulatory
and legal framework in Pennsylvania no longer meets the
requirements to apply SFAS No. 71 to the generation business, the
Company would reevaluate the financial impact of electric
industry restructuring and a material write-off could occur.
Given the current regulatory environment, the Company's
electric transmission and distribution businesses are expected to
remain regulated and, as a result, will continue application of
the provisions of SFAS No. 71.
Securitization
The Company is considering securitizing some portion of
its stranded costs. However, the Company has not included an
application for a qualified rate order as part of its
Restructuring Plan. This should not be viewed as an indication
that the Company is opposed to securitization.
The Company has not included a request for
securitization at this time for several reasons. First, there is
tremendous uncertainty at the present time as to when and if the
Company would be allowed to issue transition bonds. The current
PECO securitization proceeding has been highly contentious and it
appears likely that any PUC decision that permits PECO to issue
transition bonds may be appealed by one or more of the parties.
Any such appeal could significantly delay the actual issuance of
transition bonds.
Second, there are several unresolved issues regarding
tax matters, structure and accounting issues that require further
review. It is apparent that securitization requires much more
analysis than originally contemplated. Rather than rushing to
include securitization in the Restructuring Plan, the Company has
elected to attempt to resolve these issues and present a more
definitive proposal to the PUC.
Third, the Restructuring Plan is itself complex and
raises many important and novel issues. Given the likelihood of
substantial delay in the issuance of transition bonds, the
Company decided not to needlessly complicate its Restructuring
Plan with a securitization proposal at this time.
The Company supports securitization. In reaching a
decision about securitization, the Company will carefully
consider the specific nature of the stranded costs being
securitized and how various categories of stranded costs can
impact the relative benefits of securitization available to
ratepayers and shareowners. For example, a considerable portion
of the Company's stranded costs are related to regulatory assets
and NUG contract payments that have not been financed with
corporate debt or shareowner capital. The securitization of
these costs may not provide rate reductions for our ratepayers in
the same amount as for those stranded costs related to generating
assets that have been previously so financed.
In evaluating securitization, we will also consider the
dilutive effect that securitization could have on earnings per
share if proceeds from the issuance of transition bonds are used
to buy back the common stock of PP&L Resources, Inc. at prices
above book value and the savings from the repurchase of common
stock are passed on to customers. The analysis will include the
potential impact that such dilution could have on the level of
common stock dividends paid by PP&L Resources, Inc.
We will also consider the impact that securitization
could have on the need for the Company to issue securities during
the transition period that would not otherwise have been issued
but for securitization.
* * *
For your reference, I have enclosed a copy of the news
release issued by the Company today with respect to the filing of
its Restructuring Plan with the PUC and a fact sheet that
provides some additional details concerning the Restructuring
Plan.
If you have questions concerning the Restructuring
Plan, the Company's claim for stranded cost recovery or plans for
securitization, please feel free to call Tim Paukovits, our
Investor Relations Manager (610/774-4124) or me (610/774-5613).
Sincerely,
/s/ John R. Biggar
Enclosures
Certain statements contained herein are "forward-
looking statements" within the meaning of the
securities laws. Although the Company believes
that the expectations reflected in such statements
are reasonable, it can give no assurance that such
expectations will prove to have been correct.
<PAGE>
Exhibit 99.2
PP&L Files Customer Choice Plan with PUC
______________________________________________________
Pledging to continue its record of price stability and
to provide customers with the information they need to make
informed choices in a changing marketplace, Pennsylvania
Power & Light Co. Tuesday (4/1) filed its customer choice
implementation plan with the state Public Utility
Commission.
Under the filing, called a restructuring plan, all
customers will have the prices they pay for electricity
capped at current levels for as long as four-and-one-half
years and for up to nine years for some customers.
"This plan outlines a smooth transition from today's
regulated prices to a marketplace in which customers will
have the opportunity -- through the choices they make -- to
reduce the prices that they pay for electricity," said
William F. Hecht, PP&L's chairman, president and chief
executive officer. "Under this plan, customers can't lose.
They will have more choices while having the assurance of a
price cap during the transition period."
Tuesday's filing continues PP&L's leadership role in
the transition to a competitive electricity marketplace for
electricity, Hecht said. Under legislation signed by Gov.
Ridge last December, Pennsylvanians will have the
opportunity to select the company that generates the
electricity they use. The state's current electric
utilities will continue to provide delivery services.
Customer choice would be phased in, beginning in January of
1999.
Hecht pointed out that PP&L's plan provides that
customers who decide to shop for their electricity supply
will have a guarantee that the prices PP&L charges for the
delivery service component of current rates will not
increase for four-and-one-half years and that electricity
generation rates for those who decide not to shop for their
electricity supply will be capped for nine years.
"If our plan is approved, customers who are buying
their electricity from PP&L in the year 2001 will be paying
prices that are essentially the same as they were paying in
1986," said Hecht. "This is a 15-year record of price
stability that is unmatched in Pennsylvania." Hecht noted
that, when inflation is taken into account, PP&L rates will
have dropped by about one-third over that same period.
As part of its plan, PP&L also is proposing to make
available to all customers rates that sharply reduce the
cost of delivering additional electricity. These savings
would apply in addition to any savings that customers
realize through the competitive marketplace. "Our proposal
to provide reduced prices for additional electricity use
will benefit individual customers and promote economic
growth in the communities we serve," said Hecht.
"As the issue of customer choice has been examined over
the past several years, there has been a lot of discussion
about lower rates for Pennsylvanians. The customers of PP&L
have enjoyed low rates for decades and will continue to do
so in the future. At PP&L, we have a proven history of
delivering on the promise of competitive prices," said
Hecht.
In addition to being stable, he noted that PP&L's
prices are among the lowest in the Mid-Atlantic region.
The Company's plan is based on charges in effect on
Jan. 1, 1997. The company does not propose to change those
rate levels in its filing.
Hecht said PP&L is committed to a comprehensive
customer education effort as part of the transition to
competition. "We already are working with the PUC and other
groups to ensure that customers have the information they
need to make informed choices," said Hecht. "Customers
shouldn't be apprehensive about these changes, especially
because they don't need to make any decisions until they are
comfortable with the information they have."
As part of Tuesday's filing, PP&L outlines extensive
education efforts for consumers, Hecht said. The consumer
education initiatives, which include a comprehensive
customer handbook, Internet information and community
meetings, will be carried out in cooperation with the PUC
and consumer groups.
The filing also details the Company's plan to increase
efforts to help customers who have difficulty paying their
bills.
Hecht said that a competitive generation marketplace is
good news for all of the state's electricity users.
"As a result of the changes coming to the state's
electricity business, PP&L -- which has competitive prices
and a superior record of satisfying customers -- will be
able to offer electricity to all the residents of
Pennsylvania. We are very much looking forward to that
opportunity," said Hecht.
In Tuesday's filing, the Company asks the PUC to
approve a Competitive Transition Charge that would permit
PP&L to recover costs incurred to provide service to
customers in a regulated environment which may not be
recoverable in a competitive marketplace. The Competitive
Transition Charge would be listed as a separate line item on
the bills of all "delivery" customers.
"The proposal to recover these costs through the CTC
does not represent an increase in the prices customers pay.
As a practical matter, customers are paying these charges
today under a regulated system. The transition charge is
simply a mechanism to smooth the road to the competitive
marketplace," said Hecht.
Based on projected electricity prices, PP&L estimates
that it faces transition costs of about $4.6 billion. Most
of these transition costs result from the construction of
the Susquehanna nuclear power plant. Other components
include costs to add environmental protection equipment at
coal-fired power plants, the cost of purchasing power from
non-utility generators and accounting-related charges
resulting from certain financial and ratemaking practices
under regulation.
Hecht stressed that these costs are the result of the
Company's efforts to live up to responsibilities that it
takes very seriously. "We spent this money to provide high-
quality and competitively priced service to our customers in
central eastern Pennsylvania. We anticipated being able to
recoup these investments over periods ranging up to 40
years. With competition coming to the business, that is no
longer practical," said Hecht.
Hecht said that the Company's transition cost request
is fair and is consistent with the legislation enacted last
year. "Even with the plan we propose, our projections show
that PP&L will fail to recover about $400 million of its
transition costs," said Hecht.
The Company's filing also outlines the organizational
changes that PP&L will make to treat all electricity
suppliers on a comparable basis, including PP&L's
competitive electricity generation and sales business.
These organizational changes, which include the
establishment of a Retail Energy Supply group to sell
electricity throughout the Mid-Atlantic region, were
announced last month.
The Company has deferred a decision on whether or not
it will seek to securitize any portion of the transition
costs that are approved by the PUC. The Pennsylvania
customer choice legislation permits utilities to issue
special bonds to refinance -- or "securitize" -- transition
costs. "It is not clear at this time whether
securitization will be in the long-term best interest of our
customers and our shareowners," said Hecht. "For that
reason, we have not included a request to securitize
transition costs in our filing with the PUC. We will
continue to study this issue and may seek securitization in
the future."
Hecht emphasized that PP&L will continue its commitment
to improve the quality of life in the communities of central
eastern Pennsylvania. "As has been the case for more than
75 years, the continued health and vitality of this region
is an important factor in the financial success of PP&L.
Our commitment to economic development and community
involvement will remain a top priority," Hecht said.
The PUC is expected to hold hearings on the Company's
filing and make a final decision on the proposal by the end
of this year.
"We look forward to a full, open discussion of our
filing. We are convinced that this plan is in the long-term
best interests of all who depend on PP&L," said Hecht.
PP&L, a subsidiary of PP&L Resources, Inc., provides
electric service to 1.2 million customers in 29 counties of
central and eastern Pennsylvania. Other company
subsidiaries are Power Markets Development Co., an
international power company; and Spectrum Energy Services
Corp., which markets energy-related services and products.
For recent news releases and other information about
PP&L Resources, see our Internet home page:
http://www.papl.com/
* * * * *
Following is a fact sheet that provides more details on the
Company's filing.
PP&L Restructuring Plan
Fact Sheet
____________________________________
- -- With the April 1, 1997, filing of its Restructuring Plan,
PP&L continues to be a strong and active proponent of retail
competition.
- -- The plan caps rates that all customers pay for
electricity for four-and-one-half years and for some
customers for as long as nine years. PP&L rates already are
below the Pennsylvania average. PP&L's rates today are
essentially the same as they were in 1986, which means they
are about 25 percent lower in real terms when adjusted for
inflation.
- -- One-third of PP&L's customers would have the opportunity
to choose their electricity supplier beginning Jan. 1, 1999.
Another third would have that opportunity beginning on Jan.
1, 2000, and all customers would be able to choose by Jan.
1, 2001.
- -- Enrollment periods would begin six months before each
step of the phase-in. If a class is over-subscribed,
customers will be selected on a random basis.
- -- Any supplier who is licensed by the PUC and satisfies
interconnection requirements may participate. The filing
includes a fee schedule for PP&L to provide certain services
to suppliers, including billing and general administration.
- -- PP&L plans to participate as a generation supplier to
customers in its current service territory and elsewhere.
To accommodate this participation, the company is proposing
a separation of its generation and electricity sales
function from the transmission and distribution function.
- -- PP&L plans an extensive education effort to ensure that
customers understand retail competition and can participate
on an informed basis.
- -- PP&L's transition costs are estimated to be $4.6 billion
in four main categories: nuclear generation, fossil
generation, non-utility generator contracts and regulatory
assets. PP&L is not proposing to securitize any of its
transition costs at this time, but it continuing to study
the securitization option.
- -- The plan will unbundle customer rates into three main
categories: Transmission & Distribution charge; a
Generation charge; and a Competitive Transition Charge,
which will be used to recover transition costs. The CTC
will be paid by all customers who receive transmission and
distribution service from PP&L.
- -- The CTC does NOT result in an increase in customer rates;
it is simply a restatement of costs currently being paid by
customers.
- -- PP&L will continue to be the "supplier of last resort"
for customers who choose not to shop.
- -- The filing includes a proposal to expand programs for
low-income customers.
