Press Release

PUC Approves Lower Distribution Rate than Requested by PPL

Published on 12/6/2007

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today approved a settlement for a lower distribution rate than requested by PPL Electric Utilities.

The Commission voted 3-1 to approve the settlement with Chairman Wendell F. Holland dissenting on the rate allocation portion. The settlement increases the company’s distribution rates by about $55 million a year. The company’s original request was to increase rates by about $83.6 million. Changes in the law by an earlier Commonwealth Court decision in Lloyd v. PUC regarding a 2004 PPL rate case means that residential customers will pay about $47 million (87 percent) of the increase.

“The allocation of the rate increase in this proceeding shocks the fundamental principle of gradualism,” said Chairman Holland in a statement. “This is an unacceptable additional burden to place on PPL’s residential consumers and it is not one that I, unlike the court and others, feel they should have to bear. ”

Chairman Holland added "Nearly, 90 percent of the increase is placed on the residential class, I cannot support that."

Vice Chairman James A. Cawley issued a statement commending the parties in the case for increasing funding for low-income programs while maintaining the current customer charge.

Commissioner Kim Pizzingrilli also issued a statement.  Commissioner Tyrone J. Christy issued a statement as well.

The settlement was reached between the company and formal complainants such as the state’s Office of Consumer Advocate, the PPL Industrial Customers Alliance, the state’s Office of Small Business Advocate, the PUC’s Office of Trial Staff, and consumers who had filed formally before the Commission.                                

Under the settlement, the monthly bill for a residential customer using 1,000 kwh of electricity will increase by about $4 from $98 to $102 (4 percent). The original proposal called for rates to increase by about $6 from $97 to $103. The increase may become effective for service rendered on or after Jan. 1, 2008.

The increase affects about 1.2 million residential customers and about 174,700 commercial, industrial and municipal customers in Berks, Bucks, Carbon, Chester, Clinton, Columbia, Cumberland, Dauphin, Juniata, Lackawanna, Lancaster, Lebanon, Lehigh and Luzerne counties.

The settlement also includes:

• An increase to PPL’s annual contribution to its Low-Income Usage Reduction Program by an additional $500,000 to a total of $7.75 million;
• An increase in the company’s reporting requirements to interested parties on its Customer Assistance Programs for 2008 and 2009;
• A requirement for the company to solicit input from interested parties on the development of time-of-use rates;
• Funding for the Solar Scholars Program of $250,000 where the company will work with the Sustainable Energy Fund to implement projects at universities in the PPL service territory; and
• $250,000 of capital for the development of a small business loan guarantee pilot program tied to energy efficiency improvements.

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. R-00072155

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