Press Release

PUC Investigates First Energy’s Rate Increase Request for Met-Ed and Penelec Customers

Published on 5/4/2006

Filed under: Electric

HARRISBURG, Pa. – The Pennsylvania Public Utility Commission (PUC) today voted today to investigate a First Energy request to increase its rates for the company’s Metropolitan Edison Co. (Met-Ed) and Pennsylvania Electric Co. (Penelec) customers.

The Commission voted unanimously to investigate the company’s Rate Transition Plan that will affect the rates for Met-Ed and Penelec customers. The PUC suspended the proposal and assigned it to a PUC administrative law judge for a recommended decision. The Commission has until Jan. 10, 2007, to make its final decision at a public meeting in Harrisburg.

According to the company’s filing, the proposed increase would allow Met-Ed and Penelec to begin to recover the costs of distribution, transmission and generation services, which have increased during the last several years. The Rate Transition Plan attempts to restore the balance intended by the 1998 restructuring plan in a gradual, measured way that preserves the Companies’ financial integrity while avoiding rate shock to consumers, according to the company. It also addresses shortfalls in non-utility generation power cost recovery.

Med-Ed

The Met-Ed proposal calls for an overall increase of $216 million (19 percent) for 2007 under the company’s preferred approach. They also offered an alternative that calls for an increase of $269 million (24 percent).

Met-Ed also is requesting automatic rate adjustment rates to recover transmission costs, storm damage expenses, the cost of providing low-income programs and government mandates. In addition, the company is proposing changes in its generation rates for 2008, 2009 and 2010 which could increase rates by up to $165 million each year.

Under the preferred approach, the proposal increases the yearly bill for an average Met-Ed customer using 6,000 kwh per year to about $707 a year from about $601 (18 percent). Under the alternative proposal, the average Met-Ed customer’s yearly bill would increase to about $726 a year (21 percent). Met-Ed serves about 534,966 customers in eastern and southeastern Pennsylvania.

Penelec
The Penelec proposal calls for an overall increase of $157 million (15 percent) for 2007 under the company’s preferred approach. They also offered an alternative that calls for an increase of $206 million (19 percent).

Penelec also is requesting automatic rate adjustment rates to recover transmission costs, storm damage expenses, the cost of providing low-income programs and government mandates. In addition, the company is proposing changes in its generation rates for 2008, 2009 and 2010 which could increase rates by up to $135 million each year.

Under the preferred approach, the proposal increases the yearly bill for an average Penelec customer using 6,000 kwh per year to about $648 a year from about $571 (14 percent). Under the alternative proposal, the average Penelec customer’s yearly bill would increase to about $669 a year (17 percent). Penelec serves about 587,975 customers in western and southwestern Pennsylvania.    

The Pennsylvania Public Utility Commission ensures safe, reliable and reasonably priced electric, natural gas, water, telephone and transportation service for Pennsylvania consumers, by regulating public utilities and by serving as responsible stewards of competition. For recent news releases, or more information about the PUC, visit our website at www.puc.state.pa.us.

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Docket Nos.    R-00061366, R-00061367,  P-00062213, P-00062214

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