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): March 22, 1995
PENNSYLVANIA ELECTRIC COMPANY
(Exact name of registrant as specified in charter)
Pennsylvania 1-3522 25-0718085
(State or other (Commission (IRS employer
jurisdiction of file number) identification no.)
incorporation)
2800 Pottsville Pike, Reading, Muhlenberg Township, Berks County,
PA 19640-0001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(610) 929-3601
ITEM 5. OTHER EVENTS.
1. FERC "MEGA NOPR"
On March 29, 1995, the Federal Energy Regulatory
Commission ("FERC") issued a Notice of Proposed Rulemaking
("NOPR") on Open Access Non-discriminatory Transmission Services
by Public Utilities and Transmitting Utilities (RM95-8-000), a
supplemental NOPR on Recovery of Stranded Costs (RM94-7-001)
superseding an earlier June 1994 NOPR, and related NOPRs.
According to the FERC, the new rules, if adopted,
would, in essence, provide open access to the Nation's interstate
electric transmission network and thereby encourage a more fully
competitive wholesale electric power market.
Among other things, under the FERC's proposal:
(a) all electric utilities subject to the FERC's
jurisdiction would be required to file non-discriminatory
open access transmission tariffs for both network and point-
to-point service which would be available to all wholesale
sellers and buyers of electricity. The FERC would establish
"pro forma" initial tariffs for all utilities based on
presently filed cost data 60 days after the effective date
of the new rule; thereafter, utilities would be able to
propose changes in these tariffs;
(b) jurisdictional utilities would be required to
accept service under these new tariffs for their own
wholesale transactions; and
(c) utilities would be entitled to recover their
legitimate and verifiable "stranded costs" -- i.e., costs
which the utility may incur when a wholesale customer stops
purchasing electricity from the utility and, instead, uses
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the utility's transmission system to purchase power from
another source.
While the FERC's proposed open transmission access rule
does not provide for so-called "corporate unbundling" (i.e.,
disposing of ancillary services or creating separate affiliates
to manage transmission services), it does provide for "functional
unbundling." In the NOPR, the FERC describes such functional
unbundling to mean that
(a) the utility must make the same charges for trans-
mission services (including ancillary services) to it's new
wholesale customers as are provided by the tariff under
which it offers these services to others;
(b) the tariff must include separate rates for trans-
mission and ancillary service; and
(c) the utility (i) is restricted to using the same
electronic network as is used by its customers to obtain
system transmission information when engaging in wholesale
transactions and (ii) may not have access to any internal
system transmission data which is not otherwise available to
non-affiliated third parties.
With respect to stranded costs, the FERC proposed in
the related NOPR that it would provide recovery mechanisms where
stranded costs result from municipalization or other instances
where former retail customers become wholesale customers, as well
as wholesale stranded costs. The NOPR also states that the
states would be expected to provide for recovery of stranded
costs attributable to retail wheeling or direct access programs,
and the FERC would intervene only when the state regulatory
agency lacked necessary authority.
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As the NOPRs provide for comment periods of 180 days,
the FERC would not be implementing any of its proposed new rules
prior to the first quarter 1996, at the earliest.
2. GPU System Transmission Tariff
On March 22, 1995, prior to the FERC's issuance of
the NOPRs discussed above, the Company and it's electric
operating affiliates (Jersey Central Power & Light Company and
Metropolitan Edison Company) filed with the FERC proposed
integrated transmission system open access transmission tariffs.
Such proposed tariffs provide for both firm and interruptible
transmission service on a point-to-point basis. Network
services, where requested, would be negotiated on a case by case
basis. Transmission service would be provided on a comparable
basis to that afforded to GPU Companies for off-system, wholesale
sales. Rates would be based upon a distance sensitive,
"megawatt-mile" methodology for firm service and zonal pricing
for interruptible service.
While the GPU Companies believe that their
proposed transmission tariffs are consistent with the FERC's
Transmission Pricing Policy Statement, they do not know whether
or to what extent the FERC will require modifications to any of
the proposed terms and conditions of transmission tariffs as a
result of the FERC's NOPRs or otherwise.
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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.
PENNSYLVANIA ELECTRIC COMPANY
By:______________________________
T. G. Howson, Vice President
and Treasurer
Date: April 20, 1995