Press Release

PUC Approves Rate Adjustments for Citizens’ and Wellsboro Electric Companies

Published on 3/27/2008

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today approved revised default service rates for Citizens’ Electric Co. and Wellsboro Electric Co. effective April 1, 2008.

Citizens’ Fixed Generation Supply Service Rate (Fixed GSSR) will go to 8.6162 cents per kWh, an increase of about 0.7134 cents per kWh (9.03 percent).  The bill for the average customer using 500 kWh a month will increase by $3.57 from $39.51 to $43.08.  Citizens’ serves about 6,560 customers in Union County.

Wellsboro’s Fixed GSSR will go to 10.6730 cents per kWh, an increase of about 2.1169 cents per kWh (24.74 percent).  The energy component on a bill for the average residential customer using 500 kWh each month will increase $10.59 from $42.78 to $53.37.  Wellsboro serves about 5,900 customers in Tioga County. The new rates for both companies take effect April 1, 2008. 

The changes to the Fixed GSSR reflect updated estimates to forecast costs and sales, which are then reflected in the rates.  The Fixed GSSR is based upon the total amount of annual estimated purchased power costs, plus the total annual estimated administrative charges associated with the purchasing of generation supply to serve the default service customers divided by the projected total kWh sales for the application period.

The larger price increase for Wellsboro reflects higher transmission congestion costs related to an outage at the First Energy’s East Towanda transformer.  Repairs on this transformer were accelerated as a result of cooperation between Wellsboro, FirstEnergy Corporation and PJM Interconnection LLC, and completed by Feb. 28, 2008.  Congestion costs represent the higher cost of transmitting electricity from one point to another constrained point on the transmission grid.  While transmission congestion charges have significantly subsided since then, collection of historical congestion costs incurred prior to the transformer repair are being spread out over an annual period to help moderate the impact of this transformer outage on Wellsboro’s customers.  Higher capacity costs and, to a lesser extent, higher administrative charges, and the inclusion of alternative energy portfolio costs for the first time, also contributed to the price increases at Wellsboro and Citizens’.

The Commission reviews the companies’ filings to verify computations; ensure the proposed rates reflect the energy contract prices and Federal Energy Regulatory Commission approved tariff rates; and determine that the filings are in compliance with the default service riders and Commission orders.  This action today by the Commission allows Citizens’ and Wellsboro to charge customers for its filed costs.  However, the Commission in its Public Meeting of Feb. 28, 2008, also directed that an investigation be conducted to assess the reasonableness of the congestion costs incurred by Wellsboro.  The results of this investigation will determine if consumers are entitled to a future refund of some or all of the higher congestion costs.

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-2008-2030582; R-2008-2030583

Contact:

• Denise McCracken
  Senior Communications Specialist
  717-787-5722
  demccracken@pa.gov