Consumer Coalition Calls FirstEnergy/Allegheny Merger OK – A ‘Missed Opportunity’ but Welcomes Panel to Review Competitive Marketplace

FOR IMMEDIATE RELEASE: February 24, 2011

HARRISBURG (Feb. 24) – Energy Consumers First (ECF), a new coalition pushing for a stronger consumer bill of rights and more energy competition, expressed disappointment that the Pennsylvania Public Utility Commission (PUC) missed an opportunity today to increase consumer choices as part of its approval of a merger between FirstEnergy and Allegheny Power.

As part of its ruling, the PUC did announce a study of the “state of competition in Pennsylvania,” an action ECF said it welcomed even though its recommendations would come too late to help customers in the FirstEnergy/Allegheny Power territory in the short run.

“The merger of FirstEnergy and Allegheny Power creates the state’s largest electric service area, involving some 50 of the state’s 67 counties,” said Barbara Hafer, ECF spokesperson. “But the reality is that unless the PUC moves to change the climate for competition, customers in that territory currently have only two choices – go with the power provided by the incumbent utility’s subsidiary, First Energy Solutions, or one other option. That’s not what anyone would call ‘robust competition.’”

Hafer, the state’s former Auditor General and Treasurer, said she believed that the PUC was trying to respond to consumer concerns voiced through Energy Consumers First by commissioning the study of competition “and we’re committed to working to make the project a substantive success.”

She said, “The PUC has listened and heard citizens including those who have spoken through Energy Consumers First. Pennsylvanians wanting more electricity choices was a consistent message I heard while attending community events and speaking on talk shows across the state.”

While energy choice has been rolled out across the state over the past decade, it’s been more of a success in the commercial and industrial sector than among residential customers, Hafer noted. “The business sector success proves that energy choice is the right way to go but the fact that only one in five residential customers make a change says that the PUC needs to do more to ensure a level playing field among providers. And it appears that the ‘default provider’ process is the place to make improvements in the interest of consumers.”

Hafer said she was particularly pleased that the PUC review promises fair consideration of a plan to auction off blocks of what are called “default service customers” — those who do not choose a competitive provider — with the proceeds of the auction being shared among customers in the form of a rebate.

“Right now, as long as one company controls 80 percent of the market, they’re going to exercise a virtual monopoly affecting both the price of electricity and innovation. Now is the time to level the playing field and increase competition.”

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Barbara Hafer; Mobile 717-512-8330
Honorary Chairwoman
Tony May; Office 717-238-2970