News

November 20, 2009

PPL gets PUC OK

Utility is allowed to do billing and accounting for customers who switch service after caps.

The state Public Utility Commission voted unanimously on Thursday to allow PPL Electric Utilities to continue to do the billing and accounting for customers who switch their service when rate caps expire in January.

PPL’s rates are expected to increase about 30 percent when rate caps expire on Jan. 1, making offers from retailers who entering the market more competitive. Under deregulation, customers will be able to switch among retail suppliers, but PPL will continue to maintain local electric lines and bill customers.

Under the one-year program approved on Thursday, PPL would be allowed to buy the accounts receivable from the new electric retailers at a 1.37 percent discount, essentially continuing the processes it’s already doing but under contract with the retailer.

The decision reduces the duplication of services, PUC spokeswoman Jenn Kocher said, and PPL would receive a percentage of the customers’ payments.

Under the program, PPL would also have to allow budget billing options but retains the right to terminate customers for non-payment within the usual utility regulations. Retailers agreed to not reject residential customers based on credit-related issues or require a deposit for service.

In a statement issued with the decision, PUC Vice Chairman Tyrone Christy noted concerns that the plan gives no incentive to the retailer to ensure accounts are paid, therefore saddling customers who remain with PPL’s default service with the extra expense of uncollected accounts.

He indicated several questions that he hoped PPL would address throughout the year.

The program’s discount allows 1.32 percent for uncollectible accounts and .05 percent for administrative fees.

In a statement, the Retail Energy Supply Association, which was involved in the negotiations for the program, applauded the decision.

“This program will help ensure a level playing field for new suppliers and will provide customers with the convenience of receiving a single bill from PPL. Similar programs in other states with electric competition have proven very successful in promoting a more robust competitive market,” noted Richard Hudson Jr., the association’s Pennsylvania chairman.

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