Metropolitan Edison and Pennsylvania Electric customers would have anopportunity to pre-pay a portion of their future electric bills -- and earn7.5 percent interest -- under a Voluntary Pre-payment Plan (VPP) proposedby the companies.

The plan, which was filed this week with the Public Utility Commission, offers qualified residential and smallbusiness customers an option to gradually phase in future generation priceincreases by making modest pre-payments during the next two years, beforerate caps expire at the end of 2010.

"The long period of capped electric rates has been good for customers,but has left a significant gap between what they pay for electricity andwhat it costs to produce it," said Douglas S. Elliott, president of

Pennsylvania Operations for FirstEnergy, parent company ofMet-Ed and Penelec. "This plan provides a way for customers to put moneyaside that would earn an attractive interest rate and be used to lower their future electric billls."

Each month, customers who sign up for the plan would pre-pay an amountequal to about 9.6 percent of their electric bill. Pre-payments would earn7.5 percent interest and be used to reduce their electric bills in 2011 and2012.

"This plan provides a way to help customers make a smooth transition to the market-based electricity prices that were called for under Pennsylvania's electric choice law," said Mr. Elliott.

Met-Ed serves 547,000 customers within 3,300 square miles of eastern and southeastern Pennsylvania. Penelec serves 585,000 customers within 17,600 square miles of northern and central Pennsylvania.

More details are available online.

9/26/2008