Pennsylvania's Public Utilities Commission suspended today the $49 million rate increase it gave Metropolitan Edison Co. on March 22, freezing the rates the operator of the shutdown Three Mile Island nuclear plant can charge for at least six months.
"What we've done is kept things the way they were before March 22," Chairman W. Wilson Goode said in announcing the unanimous decision of the three-man PUC. "The rate increase granted [Met Ed] was predicated upon the costs associated with the construction and operation of Three Mile Island Unit No. 2, which has now been rendered inoperable and unusable for an indefinite period."
The freezing of the rates at the preaccident level was clearly a setback for Met Ed and its owner, General Public Utilities, whose attorneys two days ago told the PUC that it faced bankruptcy if it did not win at least$33 million of the $49 million rate increase.
"The company's position is that a sharing of the burden of the accident among investors, customers and employes was necessary," GPU Chairman William G. Kuhns said in a statement issued from GPU headquarters in Parsippany, N.J. "The effects of this action by the PUC cannot be evaluated at this time." He would not comment on the prospect for bankruptcy.
In freezing the rates at the pre-accident level, the PUC said it needed at least six months to conduct studies of who was to blame for the accident and what the economic impact of the accident would be for Met Ed and its customers.
"Until we find out all the facts, things should stay the way they are," Chairman Goode said. "There should be no changes until all the facts are in."
Echoed Commissioner Michael Johnson: "This is the only course we can take. This action recognizes that rates based on the assumption that TMI-2 would be in operation are clearly excessive."
The commission's action was taken across North Street from its regular hearing room in a state auditorium, where today's meeting was moved to accommodate the more than 300 people who packed it to overflowing. The action was cheered several times by the audience, most of whom appeared to be Met Ed customers.
"I want the commission to know we are very unhappy about this accident." said William Vestine, a Met Ed customer who said he also represented a citizens group calling itself Three Mile Alert, "We will not bear the burden of the Met Ed's fission folly."
The PUC ignored the utility's plea that it faced bankruptcy, choosing instead to believe that the company will survive on the insurance claims it collects from the accident. Met Ed's lawyers conceded they would recoup much of their losses through insurance claims but publicly worried if they would collect them fast enough to stave off bankruptcy.
GPU general counsel James B. Liberman said that Met Ed faced the staggering expense inthe next few months of financing the entire recovery operation at Three Mile Island. He said Met Ed was paying the salaries, meals and housing costs for about 1,000 outside technicians and engineers engaged in the recovery operation.
"We had as many as 2,000 of them out at Three Mile Island at one point," Liberman said. "We've managed to get the number down to 1,000."
In its action today, the PUC also said it plans to study how Met Ed and another GPU subsidiary, Pennsylvania Electric Co., are passing along the costs of purchasing outside electricity to make up for the loss of nuclear electricity at Three Mile Island.
"There will be no automatic pass-through without the fullest consideration of all the facts," Commissioner Johnson promised the cheering crowd. "We mean absolutely that."
GPU has said that it is paying $800,000 a day to buy power from 10 other electric companies in four neighboring states to service its 1.5 million customers in Pennsylvania and New Jersey. GPU said the outside power is costing its two subsidiaries (Met Ed and Pennsylvania Electric) located in Pennsylvania almost $14 million a month. CAPTION: Picture, Pennsylvania utility commissioners Louis Carter, left, W. Wilson Goode, and Michael Johnson announce decision. AP