Duquesne Light Wins Approval to Leave PJM

While FERC Approves Move to Midwest ISO, Decision Maintains Exorbitant

PJM Capacity Charges, Through 2011, That Favor Generators Over Utility


Jan 17, 2008, 00:00 ET from Duquesne Light

    PITTSBURGH, Jan. 17 /PRNewswire-USNewswire/ -- Today, the Federal
 Energy Regulatory Commission (FERC) conditionally approved Duquesne Light's
 transfer from the PJM Interconnection to the Midwest ISO, in a move that
 would free customers from exorbitant power capacity charges over the longer
 term, but require payment of these charges through 2011.
     "It is very good news that Duquesne Light is allowed to leave PJM,
 because the method the group uses to set capacity charges has put the
 profits of generators ahead of the interests of our customers," said Morgan
 O'Brien, president and chief executive officer. "In the long term, this
 will be good for our customers because we will be able to avoid future PJM
 capacity auctions. All indicators are that capacity is only going to get
 more expensive, beyond the exorbitant prices PJM already charges."
     "It is disappointing, however, that Duquesne Light customers will be
 paying for PJM capacity through 2011, long after the company has left PJM,"
 O'Brien added. "These costs could exceed $100 million annually for all of
 our customers."
     These capacity charges are monies paid to generators to encourage the
 construction of new power plants. So far, it is having the opposite effect.
 There has been no apparent interest in building future generation.
     It has been estimated that the average Duquesne Light residential
 customer could pay an extra $80 a year for these capacity charges, through
 2011, while seeing no improvement in service and reliability. In total, the
 new system for determining capacity charges will result in an additional
 $15 billion transfer of money from customers throughout PJM's service
 territory to generators over a three-year period.
     Duquesne Light is waiting to receive the actual FERC order before fully
 evaluating today's decision, and considering the company's options.

SOURCE Duquesne Light