PPL Electric Utilities announced Tuesday (1/23) that it plans to ask the Pennsylvania Public Utility Commission (PUC) to approve a modest increase in its electric rates beginning in 2008.

The company will be requesting an increase in its distribution rates, which cover the cost of personnel, poles, wires and equipment needed to deliver electricity. These costs make up about one-third of the total electric bill.

“We’re committed to delivering safe and reliable electric service and to developing programs and technologies that help customers manage their electricity use,” said William H. Spence, president of PPL Electric Utilities.

“We will make this request to ensure that we will continue to have the resources necessary to provide the exceptionally reliable service that our customers have come to expect and to expand our efforts to provide customers with the resources they need to make wise choices in how they use electricity.”

Spence said the request reflects PPL Electric Utilities’ intent to seek smaller adjustments every few years as higher operating and capital costs warrant, rather than waiting for an extended period and then seeking much more substantial increases. The last distribution rate change took effect Jan. 1, 2005, which was the first such increase in a decade.

Changes to distribution rates must be reviewed and approved by the PUC. The process typically takes nine months to complete. PPL Electric Utilities expects to file the request in late March 2007, Spence said.

“Maintaining superior reliability requires continued investment in the company’s delivery system and its people,” he said. “While we are implementing efficiency improvements, we are experiencing continuing increases in the costs of equipment, wages, health care, fuel and materials.”

In addition, he said, the company is investing in reliability initiatives that include installing a new outage management system to speed the company’s response to power outages, stepping up tree-trimming and equipment inspections to prevent problems, installing more switches and protective devices to limit the duration of outages, and hiring additional linemen.

“At the same time, we’re investing in tools that will help customers better understand and manage their energy use,” Spence said. “And we’re putting in place the technology needed to make a time-of-use rate option available to customers as early as 2010.”

That option would help customers save by shifting electricity use to off-peak hours. During off-peak hours, electricity is less expensive.

While the company has not determined exactly how much of a rate increase it will request, Spence said it will be less than the 7.1 percent increase that took effect Jan. 1, 2005. PPL Electric Utilities’ average residential customer today pays a little more than $3 a day for electricity.

He said he expects PPL Electric Utilities’ rates would remain below average in Pennsylvania, even with an increase. He also said the company would continue its commitment to helping customers who struggle to pay their electric bills due to financial hardships.

PPL Electric Utilities has been an industry leader for more than 20 years in implementing programs for customers in need. These programs provide payment assistance and home weatherization and energy conservation services. 

The company’s planned rate request would not affect generation or transmission charges on customers’ bills. Generation charges cover the cost of the electricity itself, while transmission charges cover the cost of moving power from power plants to the company’s local distribution network.

PPL Electric Utilities Corporation, a subsidiary of PPL Corporation that provides electricity delivery services to about 1.4 million customers in Pennsylvania, has consistently ranked among the best companies for customer service in the United States. Headquartered in Allentown, Pa., PPL Corporation (NYSE: PPL) controls more than 11,000 megawatts of generating capacity in the United States, sells energy in key U.S. markets and delivers electricity to more than 5 million customers in Pennsylvania, the United Kingdom and Latin America.