DQE Duquesne LT Hldgs

Proposal Fixes Residential Generation Rate Through 2010 PITTSBURGH, Jan. 25 /PRNewswire-FirstCall/ -- Duquesne Light Company (NYSE:DQE) today filed a petition with the Pennsylvania Public Utility Commission (PUC) requesting approval of a plan that will supply a secure source of electricity for residential and small commercial customers from 2008 through 2010. The petition is being filed now because the current supply plan for customers who have not chosen a generation supplier expires at the end of this year. Duquesne Light's proposal, which is intended to provide a bridge to the time when generation rate caps will expire for most other major electricity distribution companies in the state, seeks approval of the following elements: - fixed-price generation service for non-electric heat residential customers through 2010; - fixed-price generation service for non-electric heat small commercial and industrial (C&I) customers over the same period that will be adjusted annually, in 2009 and 2010, to reflect changes, up or down, in market prices; and - continuation of hourly pricing as the default service for large C&I customers. "Our goal is to continue to provide a reliable, secure energy source for our customers," said Morgan K. O'Brien, president and chief executive officer. "We are pleased to present a proposal that offers residential and small commercial customers a secure, supply of electricity through 2010 at a monthly cost below what they paid in 1992. Not many products have provided that degree of price stability for customers for such a long period of time." Residential Rates Remain Below 1992 Levels As part of the proposal, a non-electric heating residential customer using 600 kilowatt-hours per month would see an increase of just under $7 (approximately nine percent) in the overall monthly electric bill beginning in January 2008. Generation rates then would stay fixed through the end of 2010. By way of comparison, default service customers in other parts of the state and the region have seen dramatic increases in their monthly bills: 70 percent at Pike County (Pa.) Light & Power Co.; 59 percent at Delmarva Power (Maryland); 72 percent at Baltimore (Maryland) Gas & Electric Company; and 33 percent at Penn Power. Even with this increase, Duquesne Light customer bills still will be less than they were 15 years ago ($78.98 compared to $84.38 in 1992 for a non- electric heating residential customer using 600 kilowatt-hours per month). Pricing for other utilities has increased significantly since 1992. Natural gas pricing is up 139 percent; water and sewage rates have increased 76 percent; and the average cost of cable and satellite television has seen an 86-percent rise. Seeking Balanced Transition to Fully Competitive Statewide Market The PUC currently is developing default-service regulations that are expected to go into effect when rate caps at other major utilities in the state expire at the end of 2010. Because the retail market in Pennsylvania is not yet fully developed, Duquesne Light's supply proposal is designed to be an interim or transition plan. "Duquesne Light has undertaken extensive efforts to meet with interested parties to develop an energy supply plan that provides a balanced and responsible transition to a fully competitive statewide market in 2011," O'Brien said. "We believe our filing, which builds on the success of our prior default-service plans, reflects the different circumstances, preferences and market conditions faced by different customer groups as competitive markets continue to develop." Market Adjustments for Small C&I Customers The proposed fixed rate for small C&I customers will be adjusted in 2009 and in 2010 by a market index that reflects subsequent changes in prices. These customers will benefit as energy suppliers compete and by not being exposed to short-term market price fluctuations they may not be equipped to handle. Large C&I Fixed Rate Options Available in Market As noted earlier, Duquesne Light will continue to provide hourly pricing as its default service for large C&I customers. The company is confident customers preferring a fixed-price option will be able to obtain alternative choices from energy suppliers. As of December 2006, approximately 98 percent of the large C&I customer load in Duquesne Light's service territory already is shopping for energy supply. In addition, Duquesne's previous efforts to obtain a fixed rate at attractive prices for these customers using a solicitation process have proven to be difficult. Communication With Customers and Suppliers Key to Plan The company's filing seeks approval of the petition by July 1, which will allow Duquesne Light time to communicate with customers and suppliers. It also will provide time for suppliers to communicate with customers prior to the new rates becoming effective. About Duquesne Light Company Duquesne Light Company is a leader in the transmission and distribution of electric energy, offering superior customer service and reliability to more than half a million customers in southwestern Pennsylvania. DATASOURCE: Duquesne Light Company CONTACT: Media, Joseph Vallarian, +1-412-232-6848, or Financial Community, Darrin Duda, CFA, +1-412-393-1158, both of Duquesne Light

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