PPL Electric Utilities seeks rate increase to support investments in reliability
The requested increase would allow the company to recover the costs associated with recent capital investments in its distribution system, the major 2011 storms, and its continued support of electric choice and consumer education
Allentown, Pa., April 2, 2012 — PPL Electric Utilities asked the Pennsylvania Public Utility Commission to approve an annual revenue increase of about $104.6 million, or about 2.9 percent, for distribution service.
The requested increase would allow the company to recover the costs associated with recent capital investments in its distribution system, the major 2011 storms, and its continued support of electric choice and consumer education.
If approved, the requested increase would likely take effect Jan. 1, 2013, after investigation and review by the commission. Even with the proposed increase for distribution service, the total electric bill for customers receiving generation service from PPL Electric Utilities (based on today's generation prices) is expected to be lower in 2013 than it was in January 2010. This is due to the steady decline in generation rates, which make up two-thirds of the total bill.
Between the start of 2010 and the end of this year, the utility will have invested nearly $1 billion in its local distribution system. The company is replacing aging equipment, much of which was built in the 1960s and 1970s, and making other improvements to provide more reliable service to customers in all areas of its 10,000-square-mile service territory. This work has sustained and created jobs for PPL Electric Utilities employees and hundreds of contractors.
Now, PPL Electric Utilities is asking the state for permission to begin recovering some of its costs related to those upgrades. Utility companies such as PPL Electric Utilities are not allowed to recover the costs of infrastructure investments without the PUC review and approval of the rate request.
The requested distribution rate increase would add about $7 per month to an average residential customer's bill. Because generation rates have decreased over the past two years for both customers who purchase electricity from alternative suppliers and those who purchase default supply from PPL Electric Utilities, the company projects that January 2013 monthly costs for residential customers would be lower than those paid in January 2010.
The company projects that small to medium commercial and industrial customers would be paying about 1 percent more than they were in January of 2010.