Press Release

PUC Approves PECO Voluntary Market Rate Transition Phase-In Plan

Published on 3/12/2009

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today approved a settlement to allow PECO Energy Co. (PECO) to begin a Voluntary Market Rate Transition Phase-In Program to help customers smooth out potential increases for electric generation supply service that will occur when rate caps expire Dec. 31, 2010.  

“I would encourage all eligible customers to consider enrollment in this plan,” said Commissioner Kim Pizzingrilli in a statement. “While our latest electric price estimates show that PECO’s current rates are fairly close to the market price, this option provides participating customers some protection against future price volatility.  As indicated in prior statements on rate mitigation, the Commission will continue its efforts to assist PECO energy customers through the expiration of rate caps.”

The Commission voted 5-0 to approve the phase-in program, which allows participating customers to make advance payments from July 1, 2009 through Dec. 31, 2010.  The payments are then credited to customer bills, with 6 percent interest, between Jan. 1, 2010, and Dec. 31, 2012.  A 60-day enrollment period for the program will open after Commission approval.

PECO also agreed to provide customer education materials on the phase-in program to the City of Philadelphia.  The company will coordinate with the city to obtain ideas and input on ways to increase customer assistance program (CAP) participation to include customers who are verified to meet the eligibility requirements of PECO’s CAP Rate Riders. 

The settlement was reached among the company, the PUC’s Office of Trial Staff, the Office of Consumer Advocate, the Office of Small Business Advocate, the City of Philadelphia, the Retail Energy Supply Association, the Tenant Union Representative Network, Action Alliance of Senior Citizens of Greater Philadelphia, Association of Community Organizations for Reform Now and Reliant Energy, Inc.

PECO provides electric transmission and distribution service to approximately 1.6 million customers in Southeastern Pennsylvania.  Rate caps were placed on generation rates as part of the 1996 restructuring of the electric industry.

In May 2007, the Commission approved a plan to mitigate and prepare Pennsylvania electricity customers for significant price increases that may occur as generation rate caps expire. The mitigation measures include:  energy efficiency; demand side response; default service supply procurement to help insulate customers from large fluctuations in market prices; rate mitigation programs; updated low-income programs; the removal of barriers to retail choice; and consumer education.

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.  P-2008-2062741

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