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From the Vault: News from the Wednesday, Aug. 11, 1976, edition of the Press & Journal

Posted 8/7/18

FPC denies Met-Ed rehearing in move to break power pact

Metropolitan Edison Company's request for a rehearing on its controversial case with the borough to break the longstanding 1 …

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From the Vault: News from the Wednesday, Aug. 11, 1976, edition of the Press & Journal

Posted

FPC denies Met-Ed rehearing in move to break power pact

Metropolitan Edison Company's request for a rehearing on its controversial case with the borough to break the longstanding 1 cent-per-kilowatt contract has been denied by the Federal Power Commission.

Philip P. Ardery, legal counsel for the borough in its running battle to defend the 70-year-old contract, this week notified Borough Manager George Merkel of the denial action.

He said Met-Ed now has 60 days from July 30 if it wishes to take an appeal to the Federal Circuit Court. This could either be the Court in Pennsylvania or the District of Columbia.

Middletown’s defense of the contract dates back to March 6, 1974, when Met-Ed filed a petition requesting the Federal Power Commission to investigate the company's wholesale rate to Middletown, which was fixed at 1 cent per kwh on July 14, 1906. In 1975, the Federal Power Commission’s administrative judge ruled in favor of Middletown.

Exceptions were filed but again the FPC upheld the original decision.

Met-Ed filed for a rehearing of the last opinion July 1, and that was denied July 30.

Met-Ed has continually used Kutztown as a comparative case against the Middletown contract. The Federal Power Commission said, “Kutztown, the customer most comparable with Middletown, does not have the benefit of a similar contract. Nor does it appear that any other customer of Met-Ed is so lucky. The fact of the contract, however, cannot be ignored. This contract, undesirable as it may be to Met-Ed, is certainly an operative ‘other consideration’ as set forth in the company’s own definition of undue discrimination.”

Met-Ed contends that because of the extremely favorable, less than cost-based rate available to Middletown in perpetuity, there is no way for Met-Ed, for Met-Ed's other customers, and for any supplier of electricity in the country to successfully compete with Middletown. The FPC ruled such an argument ignores the essential differences between a rate fixed by contract and rate established by the FPC.

Ruled the commission:

“The facts of this case simply do not allow a finding of a price squeeze. The 1906 contract established the relationship of the parties. That the price might ultimately become unfair to either party surely was considered by the drafters of the document. To the extent that Middletown might come to have a competitive advantage over Met-Ed, it is an advantage which could have been foreseen and remedied by the York Haven Power and Water Co. (Met-Ed’s predecessor) in 1906. To the extent that a price squeeze does exist, it is a self-imposed squeeze and one with which the parties must live.”

Met-Ed argued that, over the years 1937 through 1975, Middletown has paid $2.5 million less than it would have had it been charged the same rate as Kutztown. This fact represents one side of what can be termed the equitable equation. The other side of that equation is the fact that Middletown's customers would sustain a 50 percent increase in rate were Middletown to be deprived of its contract right.

“The unspoken question addressed to the commission was whether a $2.5 million shortfall over a period of some 28 years by a company having a total electric revenue of $172.5 million for the year ending July 1972 was more grievous than the potential 50 percent increase in rates to Middletown customers.”

Rep. Wright inspects potential flood areas

Congressman James Wright Jr., D-Texas, visited the flood-prone Susquehanna Valley last Friday and used Middletown and Royalton as a starting point.

As potential chairman of the powerful U.S. Public Works Committee which handles federal grants, Wright came to Pennsylvania for a personal inspection of hard-hit communities. After arriving at Harrisburg-Olmsted International Airport, he was met by town officials and a group of Frey Manor residents. Wright said: “I want to look at these places hit by floods and get a feel for the people who have suffered.”

Wright was given a book which contained photographs of the disastrous flood in Middletown, Royalton and Lower Swatara Township.

His van first moved to the First Ward, where local officials pointed out areas hit by the 1972 flood, including lower Royalton. From that point, the party motored through Frey Manor. Wright was told of the Army Corps of Engineers’ decision to disallow a project to dredge the Swatara Creek and remove “Mud Island,” which has been viewed as a potential cause for future flooding.

Local woman robbed at Harrisburg mall

An elderly Middletown woman was admitted to Community General Osteopathic Hospital last Wednesday night with fractures suffered when she was assaulted and robbed at Harrisburg East Mall, according to a hospital spokeswoman.

The spokeswoman said Mrs. Reno Thompson, 68, of 17 Beechwood Drive, was admitted for surgery with a fractured hip and leg and was listed in fair condition.

She reportedly was knocked down by two men who fled with her purse, the spokeswoman said. Swatara Township police were investigating.

Headlines from the edition

• Council defeats reorganization bid by Tritch

• School board acts on 1976-77 term personnel

• Medical center’s system aids poison victims

• Third annual Legion-VFW softball tourney opens on Friday

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