Judge Recommends Approval of Settlement; PUC Approval Still Required
PPL Electric Utilities moved a step closer to offering its customers an option that would ease the effect of a price increase in 2010, with a judge recommending last week that a settlement agreement be approved by the Pennsylvania Public Utility Commission.
The settlement agreement ― between the company and PUC staff, consumer and small business advocates, and other parties involved in the proceeding ― will now go to the PUC commissioners for a final vote.
“Our proposal gives residential and small business customers the opportunity to spread out the 2010 increase in their electric generation costs over several years versus having the whole increase occur on January 1, 2010,” said David G. DeCampli, president of PPL Electric Utilities. “Higher prices after a decade under capped rates for generation charges will not be easy for customers, so we are working to get them the lowest prices and offer choices to help manage electric bills.”
If the agreement is approved by the PUC, customers of PPL Electric Utilities could choose to make additional payments on their electric bills through the end of 2009 that would go into a separate account that would earn 6 percent interest paid by the company.
The additional payments would be added to customer bills each month as a fixed amount based on the customer’s average electricity use.
The additional payments plus interest would be used in 2010 and 2011 to offset a portion of the increased generation charge.
Customers would be able to leave the program at any time through the end of 2011 and get back the money in their account with interest.
PPL Electric Utilities would provide program details and enrollment information to eligible residential and small business customers by bill inserts, advertisements and customized letters after the proposal is approved by the PUC.
Under terms of the settlement, customers would have to take specific action to enroll in the program. They could enroll by phone, on the Internet or by returning an enrollment card they will receive with their customized letters.
The phase-in option gives customers a way to adjust gradually to the end of rate caps on generation charges in 2010, DeCampli said. Instead of a larger one-time increase, customers would have a series of smaller annual increases.
In the decade that the rate cap has been in effect, generation prices have risen substantially, largely due to higher costs for fuels used to generate electricity.
In 2010, state law requires PPL Electric Utilities to obtain electricity in the competitive market for customers who have not chosen an alternative supplier. The cost of the electricity purchased must be passed through to customers without markup.
Realizing the increase in generation prices, and to minimize the price risk for its customers, PPL Electric Utilities is obtaining electricity supply for 2010 in advance and in stages. Prices for electricity that has been purchased for 2010 in the first two stages of that process are significantly higher than the 2009 capped generation charge.
PPL Electric Utilities also has developed an e-power Web site, which includes the Energy Analyzer, a powerful tool that gives customers information about their daily energy use, historical usage information, and ideas to reduce their energy use. Customers can visit www.pplelectric.com to sign up for the Energy Analyzer.
PPL Electric Utilities Corporation, a subsidiary of PPL Corporation (NYSE: PPL) 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.