The Pennsylvania Commonwealth Court has upheld two state Public Utility Commission actions related to Pennsylvania Power & Light Co. rates and remanded a third issue to the PUC for recalculation.
In an opinion issued Tuesday (5/13), the court ruled that the PUC acted properly in allowing PP&L to recover certain costs associated with post-retirement benefits for company employees and in allowing PP&L to recover deferred costs that dated back to the start of commercial operation for the Susquehanna Unit 2 nuclear facility.
On a third issue, the court ordered the commission to reconsider an action related to the collection of the state gross receipts tax on bills that go unpaid by electricity consumers.
The state Office of Consumer Advocate had appealed the PUC actions following the commission's decision on PP&L's 1995 rate case.
According to Paul Russell, PP&L's associate general counsel, Tuesday's Commonwealth Court decision will have no immediate effect on the bills of PP&L customers. "The decisions on retirement expenses and on the Susquehanna Unit 2 costs simply confirm the commission's decisions on rates that are in effect today," said Russell. "On the gross receipts tax issue, we will await further PUC direction before taking any action."
The post-retirement expenses, which were related to changes in financial accounting rules, are being collected over 17 years at an annual rate of about $1.7 million. The Susquehanna Unit 2 costs, which were incurred between the commercial operation date of the facility and recognition of the unit in company rates, are being collected over a 10-year period at an annual rate of about $1.9 million.
The gross receipts tax issue amounts to about $740,000 per year.
"We are pleased that the Commonwealth Court has taken action to clear up any question about these issues," said Russell. "At the PUC's discretion, we will work with the commission to address the gross receipts tax issue."
In September of 1995, the commission granted PP&L an $85 million or 3.8 percent rate increase, the company's first base rate increase in a decade.