PPL Electric Utilities Aims to Increase Rates by 22 Percent

PPL Electric Utilities wants to increase distribution rates and the flat customer charge while petitioning regulators to allow it to grow its guaranteed profits from operations.

The increase could cost electricity users as much as $10 per month, according to the utility, which was requested to the Public Utility Commission. However, a close look at the rates show sizable percentage increases in components of the bills.

If approved, the increases will be paid by all PPL customers, even those who purchase power from another supplier, because the rate covers the cost and profits for PPL to deliver the power over its wires and poles and the cost to serve and bill customers.

PPL is proposing increasing the distribution rate from 2.51 cents a kilowatt hour to 3.21 cents, a 22 percent increase. How much people ultimately pay depends on electricity usage.

The company is also looking to add to the monthly customer charge, a flat rate imposed on all customers regardless to usage, from $14.13 per month to $20 per month, an increase of 41 percent.

Baked into those proposed rates is a greater return-on-equity, or shareholder profit. PPL's current return on its base rate revenue is 10.4 percent. The company requested 10.95 percent. That would be 5.3 percent jump in the profit margin.

If the entire request is approved by regulators, a residential customer using 1,000 kilowatt-hours per month (who also purchased power from PPL) would see total bills increase from $147.31 to $157.50, or about 6.9 percent. The increases would yield $167.5 million a year from the company's 1.4 million customers.

Any increase would take effect Jan 1, 2016. The last time PPL received an increase in the rate was three years ago.