Press Release

DQE Generation Rates Established Under Provider of Last Resort Plan

Published on 8/19/2004

Filed under: Electric

HARRISBURG – Duquesne Light (DQE) residential and small commercial and industrial customers who choose to receive their generation service from the company will receive a set rate through 2007, under a plan unanimously approved by the state Public Utility Commission.

Today’s decision outlines DQE’s obligation to offer provider of last resort (POLR) service to its residential, commercial and industrial customers. The 1996 Electric Choice law requires electric distribution companies to provide generation service to customers who do not select an alternative supplier.

“In the long term, the adoption of the right policies to foster competition will enable consumers, utilities and competitive suppliers alike to benefit from the marketplace,” Commission Glen R. Thomas said. “While the Commission moves forward with developing regulations to address POLR service, I believe the decision today is a necessary step towards the long-term viability of the retail market in the Duquesne territory.”

The Commission approved the staff recommendation as modified by Commissioner Thomas’ motion (link to Motion and Statement).

Today’s order calls for generation rates to increase by 11.5 percent in 2005 for small customers, which includes residential and small commercial and industrial accounts. However, customers will pay total rates that are 15 percent lower than the ones in effect in 1996, when DQE’s rates were among the highest in the state and significantly above the national average.

Under the new rates, an average residential customer using 500 kilowatt-hours of electricity per month would see his overall bill - including generation, transmission and distribution - increase by approximately $3.65, from $50.89 to $54.54. Generation charges make up about 58 percent of a customer’s bill.

The Commission also rejected the company’s request to impose switching restrictions on customers, saying the requirements could slow the development of a competitive retail marketplace. The proposed rule would have required residential customers who chose another supplier but then returned to DQE to stay with Duquesne for a minimum one-year contract. Small commercial and industrial customers would have faced the same restriction, but would have been able to get out of the contract by paying an exit fee.

“Residential customers will now have free and direct access to the retail marketplace, absent stringent switching restrictions that serve as a barrier to choice,” said Commissioner Thomas. “Small C&I customers will also have direct access to the retail marketplace without being subjected to minimum stay periods or onerous exit fees.”

The PUC also approved Duquesne’s application to join the western region of PJM, the regional transmission organization based in Valley Forge . PJM operates the bulk transmission system and administers the wholesale power market in Delaware , Maryland , New Jersey , Ohio , Pennsylvania , Virginia , West Virginia and the District of Columbia .

To learn more about shopping for electricity in Pennsylvania , log onto www.utilitychoice.org.

The Pennsylvania Public Utility Commission ensures safe, reliable and reasonably priced electric, natural gas, water, telephone and transportation service for Pennsylvania consumers, by regulating public utilities and by serving as responsible stewards of competition.

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Docket No. P-00032071

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