In complying with its 1998 Pennsylvania restructuringsettlement, GPU Energy has issued a request for proposals (RFP)from electricity suppliers interested in providing competitivedefault service (CDS) to customers in its Metropolitan Edison Co.and Pennsylvania Electric Co. service territories.

CDS is the competitive bid process used to assign retailelectric choice customers to a “provider of last resort.” Theprovider of last resort acts as a safety net to ensure that no onewithin the service territory is left without an electricitysupplier, according to Pennsylvania’s electricity competition law.This provider is also obligated to serve consumers who do notchoose an electric supplier or who cannot find a supplier willingto take them.

Under its Pennsylvania restructuring settlement, whichimplemented electric competition, GPU was ordered to bid out itsprovider of last resort obligation over several years. Under theRFP, licensed suppliers with the Pennsylvania Public UtilityCommission (PUC) may bid for the opportunity to provide CDS at nomore than GPU’s capped generation rate.

Bidders accept that they could be responsible for supplyingelectricity to up to 40% of the company’s customers for one yearbeginning June 1, 2001. GPU said that suppliers would also be ableto choose whether they want to provide customer-care functions suchas billing and collections as well.

“It started off last year with 20%, it grows to 40% this yearand 60% up to 80%,” said Ray E. Dotter, spokesman for GPU. “Lastyear we did not receive any bids. The goal of this [RFP] is to givea jump start to competition so that a competitive supplier can comein and have a chunk of customers.”

GPU said subject to PUC review, over the next two-year period,provider of last resort service could be competitively bid for upto 80% of GPU’s customers.

If GPU selects a CDS supplier from this bidding process, it willthen conduct a lottery to select customers to receive provider oflast resort service from the new supplier. Any of the customersselected will have the option of returning to GPU Energy at nocharge, to receive electric service.

“We are hopeful that the market will respond to the RFP and makethis successful, but based on what happened last year, and currentmarket conditions, that doesn’t seem likely,” said Dotter. “Westill think it is in our customers’ interest to try to takeadvantage of opportunities to help develop competition.”

Late last year, a similar bidding process for competitivedefault service in PECO’s Pennsylvania service territory led tomonths of protesting over fairness. After a bidding period inOctober 2000, The New Power Company was awarded 299,300 electricitycustomers by PECO Energy, but Green Mountain Energy Co. disputedthe transfer (see Daily GPI, Dec. 8, 2000; Dec. 26, 2000). ThePennsylvania PUC, however, overruled Green Mountain’s charge thatPECO did not negotiate in good faith pertaining to the biddingprocess, and sanctioned awarding the customers to New Power.

Dotter assured that GPU Energy’s bidding process has beenapproved by the PA-PUC and provides for fair bid evaluation.

Interested suppliers should contact Andrew Wildrick, managerpower contract origination for GPU Energy, at (610)-375-5354. GPUsaid notification of intent to participate should be sent by Friday(April 6).

Domestically, GPU Inc.’s three electric utility subsidiaries -doing business as GPU Energy – serve two million customers inPennsylvania and New Jersey.

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