Aug. 1 Change to Decrease Rates for Businesses, Increase Rates for Residential Customers
The Pennsylvania Public Utility Commission on Wednesday (7/25) approved a settlement agreement that will decrease PPL Electric Utilities’ rates for most businesses and increase rates for residential customers beginning Aug. 1.
These revisions to the company’s rates, which result from a 2006 Commonwealth Court decision, will not increase PPL Electric Utilities’ revenue. The approval brings to a close an appeal process that resulted from a PUC decision on PPL Electric Utilities’ rates in late 2004.
Groups challenging the commission’s decision contended that rates paid by business customers were too high and, therefore, were subsidizing rates paid by residential customers. In August 2006, the Commonwealth Court agreed, and ordered that rates be further reviewed.
Bills for industrial and commercial customers will decrease about 2 percent to 5 percent per month, depending on electricity use. Monthly bills for a residential customer using 1,000 kilowatt-hours of electricity will increase 3.8 percent from $96.52 to $100.20.
“The settlement agreement we reached with representatives of all groups of customers phases in the reallocation and minimizes the immediate impact on residential customers, something we thought was very important,” said David G. DeCampli, president of PPL Electric Utilities.
“We’ve always strongly believed that the shift should be gradual and manageable for residential customers,” he said. “The differences in how costs were allocated have existed for many years, and the issue is not unique to PPL Electric Utilities.”
DeCampli said the shift began with the company’s last rate change in 2005, will continue with the Aug. 1 change, will be reflected in a rate change proposed for Jan. 1 and will be completed in the company’s next rate case. PPL Electric Utilities has no timetable for when that next rate case may be.
DeCampli said the reallocation resulting from the court’s decision also is the reason why business customers would see very little change under the 2.7 percent revenue increase requested by PPL Electric Utilities for Jan. 1, 2008, and why residential customers would see increases higher than 2.7 percent. The PUC is expected to issue a decision on that request late this year.
The rate changes include adjustments to reflect the reallocation of distribution and transmission revenue going forward, as well as temporary adjustments through Dec. 31, 2009, to address revenue that has been collected from various groups of customers since Jan. 1, 2005, when rates were last set.
The changes also reflect a $3.7 million refund to all customers, including interest, for revenue that has been collected with PUC approval since Jan. 1, 2005, to recover costs for restoring service following Hurricane Isabel. The Commonwealth Court disallowed recovery of those costs.
These changes are unrelated to the generation portion of customers’ bills. Generation prices are capped through 2009.
PPL Electric Utilities Corporation, a subsidiary of PPL Corporation that provides electricity delivery services to about 1.4 million customers in 29 counties of eastern and central Pennsylvania, has consistently ranked among the best companies for customer service in the United States. More information is available at www.pplelectric.com.