PPL Electric Utilities to Offer Rate Phase-In Option to Customers

PPL Electric Utilities will offer its residential and small-business customers an option that will let them adjust gradually to higher electricity prices in 2010 by stretching out the expected increase over several years.

The voluntary program will start in October. Customers will be able to enroll in this new payment option starting Aug. 27.

“Higher prices after a decade under capped rates for generation charges will not be easy for customers,” said David G. DeCampli, president of PPL Electric Utilities. “We believe it’s important to give our customers options to help them manage the transition to higher electricity supply costs that we must, by law, pass through to them without markup.

“Electricity prices have been going up throughout the United States during the period when generation supply rates for Pennsylvania utilities have been capped. These higher prices to a large degree reflect substantially higher costs for fuel and materials used in power plants,” he said.

Under the program, an average residential customer who participates would see increases in the range of 8 percent to 5 percent a year from 2008 to 2012, rather than a one-time increase when the rate cap expires in 2010.

Customers who voluntarily choose this option will make advance payments from October 2008 to December 2009 that will be used to offset a portion of their bills in 2010 and 2011. PPL Electric Utilities will pay 6 percent interest on the advance payments.

Customers may withdraw from the program at any time and get full credit, including interest, for their advance payments.

The phase-in option, filed by PPL Electric Utilities in November 2007, was approved Thursday (8/7) by the Pennsylvania Public Utility Commission.

Eligible customers will receive information in their electric bills and in the mail. Customers will have three ways to enroll:

– Use the tear-off reply and postage-paid envelope in the mailing they will receive.
– Use the link on the company’s Web site, www.pplelectric.com.
– Call the special toll-free phone number that has been established for the program: 1-866-597-2010. Representatives will be available weekdays from 8 a.m. to 7 p.m. and Saturdays from 8 a.m. to 5 p.m.

Because of changes in Pennsylvania’s electric utility industry, PPL Electric Utilities does not own power plants that generate electricity. It must buy electricity from other companies and, under state law, pass through the cost to customers with no markup or profit margin.

“We already have purchased half of the electricity we need for 2010 to replace an expiring power supply contract,” DeCampli said. “We have contracts with several suppliers at market prices, which are higher than the existing contract we have under rates that are capped by the state.”

PPL Electric Utilities has completed three of the six purchases it will make for 2010 electricity supply. The PUC has approved the results of those purchases.

If the average prices for the remaining purchases match the prices approved so far, the bill for a residential customer using 1,000 kilowatt- hours would increase by 34.4 percent in 2010, or about $36.65 per month.

Customers who enroll in the phase-in option still will be eligible to select another electric generation supplier under Pennsylvania’s Electric Choice program. Enrolling in the phase-in option will not affect their Price to Compare, which represents the generation and transmission charges for customers who do not shop for another electricity supplier. The Price to Compare helps customers evaluate offers from electricity suppliers to find out if they can save money.

Customers of PPL Electric Utilities have few competitive options for electricity supply today because the company’s generation charge for default service remains subject to a rate cap that is based on 1997 costs. Competing suppliers simply cannot sell electricity at prices below that level.

To help low-income customers, PPL Electric Utilities offers several assistance programs. The company increased funding for those programs by 38 percent this year, and expects to spend $30 million in 2008 to help low-income customers pay heating bills, make home improvements to reduce electricity use and enter into special payment plans.

For information about assistance programs, customers may call 1-800-342- 5775 weekdays from 8 a.m. to 5 p.m., or visit www.pplelectric.com.

Through the Energy Analyzer at www.pplelectric.com, customers of PPL Electric Utilities have access to information that can help them use less energy and save money. Customers who do not have Internet access may call toll-free, 1-800-342-5775, and a representative will help them through the Energy Analyzer.

PPL Electric Utilities is a subsidiary of PPL Corporation (NYSE: PPL) that delivers electricity to 1.4 million customers in Pennsylvania and has consistently ranked among the best companies for customer service in the United States. More information is available at www.pplelectric.com.