PPL lowers expected rate increase

Rates for residential customers of PPL Electric Utilities will likely increase next year, but at a lower rate than initially sought by the region’s largest supplier of electric power.

Under the terms of a settlement announced Thursday, the utility agreed to hike its distribution rate by $55 million a year, down from the nearly $84 million asked for in March in a filing with Pennsylvania Public Utility Commission.

The settlement, which will increase the utility’s funding of programs for low-income customers and cover the utility’s cost of maintaining and improving 44,000 miles of distribution lines, must still be approved by the PUC.

If approved residential customers will see a “modest increase” in their monthly bills, while business customers will see “little change,” the utility said. The settlement takes into account a court ruling on allocating costs among customers. It also advances the utility’s effort to eliminate the subsidizing of residential customers by larger commercial and industrial customers.

The typical residential customer using 1,000 kilowatt hours a month will pay $4.73 or 4.7 percent more in distribution charges. The charges make up approximately one third of a residential customer’s monthly bill. Had the utility’s initial rate request been approved, the customer’s monthly bill would go up $6.60 or 6.6 percent.

After the March filing, the utility adjusted its rate increase request down to approximately $77 million, said Dan McCarthy, PPL spokesman. “We continue to think that the original amount was justified,” he said.

The utility and other parties that participated in the rate increase filing came to an agreement on the lower rate, McCarthy said. The PUC encourages parties in rate increases to get together to discuss settlements rather than get involved in lengthy and expensive trials, he added.

“We think this gives us the kind of funding we need to provide reliable service” and support ongoing efforts to allow customers to better understand and manage their energy use, McCarthy said.

Included in the increase are funds for programs to encourage efficient energy use and award grants to developers to construct “green buildings” that conserve energy and natural resources, the utility said.