Press Release

PUC Approves PPL’s Rate Stabilization Plan to Mitigate Projected Rate Increases

Published on 8/7/2008

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today approved a settlement that will permit PPL Electric Utilities Corp. to begin implementing its Rate Stabilization Plan (RSP).

“The strength and the weakness of this plan is that it is entirely voluntary.  Unfortunately, there will be those who cannot afford to participate in it and there will be others who can afford to opt in to the program, but will not do so,” said Vice Chairman James H. Cawley.  “It is also unfortunate that this is one of the few beneficial options that we can provide to consumers to blunt the effects of rising global energy prices.”

In a statement Commissioner Tyrone J. Christy said, “I am disappointed that more meaningful proposals are not on the table at this time.  I believe we must continue to pursue every possible measure to protect customers from the lethal combination of a dysfunctional wholesale market and a retail framework that adds unnecessary costs to already-high wholesale prices.”

Commissioners Kim Pizzingrilli and Robert F. Powelson issued a joint statement.

The Commission voted 5-0 to approve the RSP, which is designed to allow customers to prepay in anticipation of large price increases for supply service that will occur when PPL’s generation rate caps expire on Dec. 31, 2009.  In its filing, PPL projected a 34.5 percent increase for the average residential customer using 1,000 kWh per month.  Because of its projected increase, PPL had sought approval to phase in the estimated 2010 rate increase.

As part of the plan, PPL customers can choose to make additional payments and receive corresponding credits on their electric bills through Dec. 31, 2011.  The plan is available to residential, small commercial, small industrial and certain street lighting customers.  According to the settlement, PPL may collect the RSP charge on a monthly basis from customers who voluntarily participate.  The amounts collected under the RSP, plus 6 percent interest, will then be paid back to those customers participating in the form of an RSP credit on monthly bills from Jan. 1, 2010, through Dec. 31, 2011.  As part of the settlement, the Commission directs PPL to begin its public notice campaign as soon as practicable and to submit a timeline to identify its target dates for customer notice, as well as the anticipated start date for the RSP payments.

On March 6, 2008, a Recommended Decision was issued by the PUC’s Office of Administrative Law Judge (OALJ) recommending approval of a settlement, which had been submitted on Feb. 27, 2008, by various parties, including PPL Electric Utilities Corporation, the PUC’s Office of Trial Staff, the state’s Office of Consumer Advocate, the state’s Office of Small Business Advocate and the Retail Energy Supply Association.  The settlement resolves all issues associated with the RSP, filed by PPL on Nov. 30, 2007, which is intended to mitigate the expected 2010 rate increase over a period of several years with most participating customers receiving a series of annual single digit percentage increases through December 2011. 

On March 17, 2008, the Commission reopened the record and remanded the matter to the OALJ for the purpose of holding a public input hearing on the RSP on an expedited basis.  The public input hearing was held on April 2, 2008, in Bethlehem.   On April 3, 2008, the OALJ issued an order certifying the record of this public input hearing to the Commission.

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-2008-2021776

Contact:

• Denise McCracken
  Senior Communications Specialist
  717-787-5722
  demccracken@pa.gov