Press Release

PUC Approves Settlement in PPL Electric Utilities’ 2004 Request to Increase Distribution Rates

Published on 7/25/2007

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today approved the settlement allowing PPL Electric Utilities to raise distribution rates for residential customers and to decrease rates for commercial and industrial customers. The new rates will go into effect on Aug. 1, 2007.

In December 2004, the PUC approved a $137.1 million increase in distribution rates that became effective on Jan. 1, 2005.  An appeal to Commonwealth Court was filed by the Office of Small Business Advocate (OSBA), Office of Consumer Advocate (OCA), Commission on Economic Opportunity (CEO) and the PP&L Industrial Customer Alliance (PPLICA). 

The Commonwealth Court issued its decision in the appeal of several of the issues on Aug. 4, 2006, reversing in part, vacating in part and affirming in part the Commission’s December 2004 decision.  One of the areas the Commonwealth Court reversed was the Commission’s decision to permit recovery of Hurricane Isabel costs.  The Court sent the case back to the PUC for resolution.

On Feb. 8, 2007, the Commission remanded the proceeding to the PUC’s Office of Administrative Law Judge.  On June 15, 2007, the parties to the case submitted a Joint Petition for Settlement to the Administrative Law Judge (ALJ), who issued a recommended decision on June 29, 2007.

In the settlement, the monthly bill for a typical homeowner will increase approximately, 3.8 percent, from $96.52 to $100.20 for a home that uses 1,000 kilowatt-hours (kWh) of electricity.

Industrial and commercial customers will see a decrease of approximately 2 to 5 percent in their monthly bill, depending on each customer’s power usage.

Reconciliation for the four customer classes will be calculated separately for each customer class, and any over/under collection of costs will be recovered or recouped on a kWh basis.  The four service customer classes are: residential; small commercial and industrial; large commercial and industrial-primary; and large commercial and industrial-transmission.  From Aug. 1, 2007, through Dec. 31, 2009, PPL Electric will provide refunds and recoupments of previously charged distribution costs.  The charges will be recomputed on Jan. 1, 2008, and Jan. 1, 2009, to reflect and under-or-over recovery of charges and refunds, and any revised projected sales.

The parties that agreed to the settlement include PPL Electric, the PUC’s Office of Trial Staff, the United States Department of Defense, OCA, OSBA, PPLICA and Eric Epstein.

The increase will affect about 1.2 million residential customers and about 174,700 commercial, industrial and municipal customers in Berks, Bucks, Carbon, Chester, Clinton, Columbia, Cumberland, Dauphin, Juniata, Lackawanna, Lancaster, Lebanon, Lehigh and Luzerne counties.

This settlement for the 2004 request is separate from PPL Electric’s 2007 request to increase rates by 2.7 percent beginning in 2008.  Under the company’s 2007 proposal, the monthly bill for an average customer using 1,000 kWh would increase about $6 from $97 to $103.  The PUC held public input hearings in June.  The Commission has until Jan. 1, 2008, to make a final decision on the 2007 request.
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 new releases and 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-00049255, R-00049255C0001-C0020

Contact:

• Cyndi Page
  Sr. Communications Specialist
  717-214-5434
  cypage@pa.gov