The Public Utility Commission this week approved a settlement that will permit PPL Electric Utilities Corp. to begin implementing its Rate Stabilization Plan to help customers deal with an expected 33 percent increase in electric rates in 2010.

“The strength and the weakness of this plan is that it is entirely voluntary. Unfortunately, there will be those who cannot afford to participate in it and there will be others who can afford to opt in to the program, but will not do so,” said Vice Chairman James H. Cawley. “It is also unfortunate that this is one of the few beneficial options that we can provide to consumers to blunt the effects of rising global energy prices.”

In a statement Commissioner Tyrone J. Christy said, “I am disappointed that more meaningful proposals are not on the table at this time. I believe we must continue to pursue every possible measure to protect customers from the lethal combination of a dysfunctional wholesale market and a retail framework that adds unnecessary costs to already-high wholesale prices.”

Commissioners Kim Pizzingrilli and Robert F. Powelson issued a joint statement.

The Commission voted 5-0 to approve the RSP, which is designed to allow customers to prepay in anticipation of large price increases for supply service that will occur when PPL’s generation rate caps expire on December 31, 2009.

In its filing, PPL projected a 34.5 percent increase for the average residential customer using 1,000 kWh per month. Because of its projected increase, PPL had sought approval to phase in the estimated 2010 rate increase.

As part of the plan, PPL customers can choose to make additional payments and receive corresponding credits on their electric bills through December 31, 2011. The plan is available to residential, small commercial, small industrial and certain street lighting customers. According to the settlement, PPL may collect the RSP charge on a monthly basis from customers who voluntarily participate.

The amounts collected under the RSP, plus 6 percent interest, will then be paid back to those customers participating in the form of an RSP credit on monthly bills from January 1, 2010, through December 31, 2011.

As part of the settlement, the Commission directs PPL to begin its public notice campaign as soon as practicable and to submit a timeline to identify its target dates for customer notice, as well as the anticipated start date for the RSP payments.

On March 6, 2008, a Recommended Decision was issued by the PUC’s Office of Administrative Law Judge recommending approval of a settlement, which had been submitted on February 27, 2008, by various parties, including PPL Electric Utilities Corporation, the PUC’s Office of Trial Staff, the state’s Office of Consumer Advocate, the state’s Office of Small Business Advocate and the Retail Energy Supply Association.

The settlement resolves all issues associated with the RSP, filed by PPL on Nov. 30, 2007, which is intended to mitigate the expected 2010 rate increase over a period of several years with most participating customers receiving a series of annual single digit percentage increases through December 2011.

Visit the PUC’s Electric Choice webpage for more information.

NewsClips: PPL Customers Can Disperse Rate Increase Over Time

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8/8/2008