BILLINGS, Mont. (Sept. 2, 2005) — PPL Corporation (NYSE: PPL) believes that there is robust competition in the wholesale electricity market in the portion of Montana served by NorthWestern Energy and in the Northwest United States, and that the Federal Energy Regulatory Commission should grant the company market-based rate authority, PPL said today (9/2).
"We welcome this review as an opportunity to settle this issue," said Paul Champagne, president of PPL EnergyPlus, the PPL business unit that handles wholesale energy transactions, including sale of the power generated by PPL Montana.
"The wholesale electricity market in the portion of Montana served by NorthWestern Energy and throughout the Northwest is extremely competitive. PPL does not have market power in electric generation. The FERC should renew our market-based rate authority," Champagne said. FERC announced yesterday (9/1) that it will undertake additional analysis of PPL's request to renew market-based rate authority in the Northwest.
Champagne cited several compelling reasons for concluding that no single company controls the market:
• PPL Montana is a very small generator in the large and vibrant Northwestern United States wholesale energy market.
• PPL Montana is only one of many generators in Montana; the total capacity of its plants equals only about 25 percent of the power generated in the state.
• PPL Montana is not the largest generator in the state. The federal government is.
• PPL sells 450 megawatts to NorthWestern Energy under contract through 2007; this is some of the lowest priced power NorthWestern buys.
• PPL consistently has offered prices to NorthWestern that are lower than the market prices.
• PPL sells about 250 megawatts under contract to other end-users in Montana.
• In addition, PPL sells power on the daily spot power market to serve Montana businesses.
“There is absolutely no evidence that there is anything but healthy, robust competition in the wholesale electricity market in the portion of Montana served by NorthWestern Energy and the Northwestern United States. No single company has an unfair competitive advantage,” Champagne said. “The FERC’s decision to conduct further analysis, which is consistent with actions it has taken in similar circumstances nationally, is based on preliminary screening tests.”
In the order, the commission states that the additional analysis does not constitute a definitive finding of market rate power. The screens are conservatively designed to identify the subset of applicants who require closer scrutiny. The FERC has ordered similar examinations of competition for other companies in markets without regional transmission operating organizations, Champagne noted.
PPL expects the FERC proceedings to take at least six months. The company will continue to sell electricity at market-based rates while cooperating fully with the FERC in its analysis, Champagne said.
PPL Corporation (NYSE: PPL), headquartered in Allentown, Pa., controls about 12,000 megawatts of generating capacity in the United States, sells energy in key U.S. markets and delivers electricity to nearly 5 million customers in Pennsylvania, the United Kingdom and Latin America. More information is available at http://www.pplweb.com/.