Press Release

PUC Approves Lower Rates than Requested by Met-Ed, Penelec

Published on 1/11/2007

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today approved lower rates than requested by Metropolitan Edison Co. (Met-Ed) and Pennsylvania Electric Co. (Penelec) in a multi-issue filing that addressed a general rate increase request, Rate Transition Plan and merger savings.

The Commission voted 4-0 to allow Met-Ed to increase its revenues by about $58.7 million (5.1 percent) and Penelec by about $50.2 million (4.6 percent). Met-Ed had requested an increase of about $216 million (19 percent) and Penelec for an increase of $157 million (15 percent). Vice Chairman James Cawley issued a statement.

Met-Ed

The Commission’s allowable increase of $58.7 million reflects an $80 million decrease in distribution revenues. The Commission allowed a pass through of a $133.5 million increase for a Transmission Service Charge Rider, which is largely the result of federally approved transmission rates. The company will be permitted to recover an additional $5.2 million for a total of about $12 million for Universal Service Programs that help low-income customers. 

The Commission denied the company’s Rate Transition Plan that included an increase in generation costs.  The Commission did not make any adjustments to rates to reflect merger savings based on FirstEnergy testimony that they provided $700 million of generation support provided to Met-Ed and Penelec.

Met-Ed serves about 534,966 customers in eastern and southeastern Pennsylvania. The new rates are effective Jan. 11, 2007.

Penelec

The Commission’s allowable increase of $50.2 million reflects an $18.7 million decrease in distribution revenues. The Commission allowed a pass through of a $59.9 million increase for a Transmission Service Charge Rider, which is largely the result of federally approved transmission rates. The company will be permitted to recover an additional $9 million for a total of about $16.3 million for Universal Service Programs that help low-income customers.

The Commission denied the company’s Rate Transition Plan that included an increase in generation costs.  The Commission did not make any adjustments to rates to reflect merger savings based on FirstEnergy testimony that they provided $700 million of generation support provided to Met-Ed and Penelec.

Penelec serves about 587,975 customers in western and southwestern Pennsylvania. The new rates are effective Jan. 11, 2007.

On March 10, 2006, Met-Ed and Penelec filed a Rate Transition Plan and request for a general rate increase. According to the filing, the proposed increases 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.

By operation of law, the rate request was suspended for up to seven months. On May 4, 2006, the PUC voted to investigate the proposal and assigned it to PUC Office of Administrative Law Judge for a recommended decision, which was issued Oct. 21, 2006.

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities to ensure safe and reliable utility service at reasonable rates; protect the public interest; educate consumers to make independent and informed utility choices; further economic development; and foster new technologies and competitive markets in an environmentally sound manner. For recent news releases, audio of select Commission proceedings or more information about the PUC, visit our Web site at www.puc.state.pa.us.

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Docket No. R-00061366

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