Request By Allegheny Power To Accelerate Power Purchases Approved By PUC

The Public Utility Commission this week approved an Allegheny Power Co. plan to increase the amount of electricity purchased in an upcoming procurement for use in 2011.

 

The Commission voted 4-1 to approve Allegheny's request to advance the procurement dates of six residential blocks ahead to June 2009. Commission Chairman James H. Cawley issued a dissenting statement. Commission Robert F. Powelson issues a statement.

 

The goal of accelerating the purchase of electric supply for residential customers will allow the company to take advantage of favorable pricing currently available in the wholesale energy markets where generation prices have decreased from $84.78 a megawatt hour in July 2008 to $55.19 a MWh in April 2009.

 

A March 23 Commission Order also allowed the company to accelerate the purchase of some electricity supply, moving up the purchase of five blocks of power for residential customers from 2010 to 2009, starting in April. After the April auction, the company said a typical residential customer using 1,000 kilowatt-hours a month would see their bill increase about $7.75 (8.5 percent) in 2011, if auction results remained consistent throughout the process.

 

Increases in electric generation rates for Allegheny Power have been capped since the electric industry was restructured in 1996. Those caps expire December 31, 2010. The 1996 electric competition law requires electric companies, or a Commission-approved competitive supplier, to provide default electric generation service to customers who have not selected a competitive generation supplier.

 

The procurement strategies for electric generation service are required to produce the least cost to customers over time. The prices are not set by the PUC, but rather are set by the wholesale market, over which the PUC exercises no jurisdiction.

 

The plan approved this week does not change the company's overall default service plan where the company will purchase power for residential customers using 12-, 17- and 29-month contracts and spot-market purchases, to mitigate the impact of price spikes in the competitive market.

 

The approved plan has no impact on the procurement plan for commercial and industrial customers. The initial default service plan was approved in July 2008 for service beginning January 1, 2011, and ending May 31, 2013.

 

Allegheny Power provides electric transmission and distribution service to about 703,000 customers in 23 counties in Southwestern, South Central and North Central Pennsylvania.

 

NewsClip: Allegheny Energy Gets OK To Accelerate Buys