PHILADELPHIA -- Peco Energy Co. said it reached a settlement with opponents of its deregulation plans that includes a 10 percent reduction in its electric rates through 2000.
The proposed settlement, filed yesterday with the Pennsylvania Public Utility Commission, contains rate reductions that Peco valued at $330 million annually.
The Philadelphia-based utility also said that, as part of the agreement, which it expects state regulators to approve by year-end, it would take a one-time write-off of $2 billion.
Peco plans to refinance or write off $7.46 billion in investments such as nuclear plants and contracts that require it to buy electricity at above-market rates. Such obligations would make Peco uncompetitive as it begins to face rival electricity sellers for the first time.
Pennsylvania plans to deregulate electricity sales to consumers over the next few years, ending Peco's monopoly on power sales in its service area. The settlement is part of Peco's plans for dealing with deregulation.
Under the settlement, Peco would be allowed to refinance $4 billion and charge customers fees totaling $1.461 billion to eliminate some of its long-term obligations, said Neil McDermott, a Peco spokesman. It would write off the rest.
Peco said the plan's opponents also agreed to withdraw challenges concerning the PUC's order on the company's plan for refinancing the debt and to the constitutionality of the state's Electric Competition Act.
Pub Date: 8/28/97