More than a dozen Pennsylvania-based municipalities last month slapped PPL Corp. with a lawsuit asserting that the electric utility pushed up power prices in the state’s electricity markets. PPL sent letters to several of the municipalities prior to the lawsuit seeking to convince them that there was no need to participate in the legal action.

According to a Dow Jones report, the complaint was filed in the U.S. District Court for the Eastern District of Pennsylvania. The suit asserts that PPL blocked competitive suppliers from selling cheaper electricity to the boroughs, the Dow Jones report noted.

Prior to the filing of the lawsuit, PPL sent letters to the relevant municipalities in an effort to cut the legal action off at the pass. “We have become aware that a lawsuit may be filed against PPL by some of our municipal customers,” wrote John Sipics, PPL’s vice president for asset management. “We understand that the basis of the potential lawsuit would be PPL’s activities in the wholesale electricity market during the first quarter of 2001 and a report issued by the Pennsylvania Public Utility Commission.”

But Sipics told the municipalities that the company “has done nothing wrong. We said so at the time, it is still true, and no one has shown otherwise. Our actions in the wholesale capacity market were legal and ethical at all times.” Sipics noted that PJM’s market monitor, “who has examined our actions in the market, concluded that PPL did not violate PJM standards or rules.” In addition, the PPL executive said that FERC “already has completed two investigations and found no reason to take action against PPL.”

Sipics also said that because the municipalities have been paying less than the prevailing market prices, “you and your customers have benefited significantly from being supplied by PPL. In fact, under the current contract, you will be paying no more for electricity in 2003 than what you were paying in 1998 and 1999.”

A PPL spokesperson said via e-mail that the company would not comment on the lawsuit beyond the position detailed in the letters sent to the municipalities.

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