PPL’s Distribution Rate Increase and Electric Choice

Earlier this year, we put out an electricity guide for citizens and businesses explaining why electricty rates were increasing, and how Pennsylvanians can to shop for the best deal.

In 2011, PPL territory rates will most likely increase again, but it is not related to the deregulated market.

There are three parts to electricity delivery: generation, transmission, and distribution. When you shop for a supplier, they provide you with generation and transmission. Distribution, which is essentially the upkeep of power lines, is still regulated by government, and provided by one of Pennsylvania’s 11 distribution utilities.

Anyone within the PPL region must use PPL as their distributor, and PPL must appliy to the Public Utility Commission (PUC) for a distribution rate increase.

PPL is awaiting final approval by an administrative law judge and the PUC to increase its rates for an estimated revenue of $77.5 million, less than its original $114.7 million proposal, in order to recapture nearly three years ($727 million) worth of distribution investments.

If approved, a judge will decide how much of an increase will fall on residential customers, but the monthly increase is expected to be minimal, from $8.44 to $8.75.

While the distribution charge is the same, flat rate regardless of your generator, it is still a good reminder for residents to shop around and make sure they’re getting the best electricity rates available.