HARRISBURG – The Pennsylvania Public Utility Commission approved a settlement that will permit PPL Electric Utilities Corp. to begin implementing its Rate Stabilization Plan (RSP).

“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.”

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 Dec. 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 Dec. 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 Jan. 1, 2010, through Dec. 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.

“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.

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

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.

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.