Oct 15 - Intelligencer Journal

Customers have flocked to enroll in a PPL Electric Utilities program that allows them to prepay future bills in an effort to offset significant rate hikes.

In fact, more than 110,000 customers chose to participate in PPL's phase-in option which was approved by the state utility commission in August.

The voluntary option essentially establishes an escrow account for customers who make advance monthly payments through the remainder of 2008 and 2009. Those payments, plus 6 percent interest paid by PPL Electric Utilities, will be used to offset a portion of their bills in 2010 and 2011.

Customers can gradually adjust to higher electricity prices ---- expected to rise by 36 percent or $460 a year for homeowners in 2010 ---- by stretching out the expected increase over several years.

"This option will help customers manage the higher costs that are expected when more than a decade of generation rate caps ends," said David G. DeCampli, president of PPL Electric Utilities.

Customers can enroll at www.pplelectric.com, by calling toll- free, (866) 597-2010, or by returning the tear-off enrollment form and postage-paid reply card they received in the mail.

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 reflect the fact that electricity use has increased faster than new generation facilities have been built.

At the same time, costs for fuel and materials have increased sharply over the past decade, PPL said.

Without the cap, generation rates would have gone up gradually over the past decade, DeCampli said.

PPL will not know how much rates will go up until it buys its power supplies, sold to utilities at auctions, for its 1.4 million customers.

Based on the completion of four of six auctions to buy power supplies for 2010, PPL is projecting that rates will go up 36 percent in 2010.

The PUC has approved the results of those purchases. The company will obtain the remaining third of the electricity it needs for 2010 next spring and fall.

By enrolling in the phase-in option, an average residential customer using 1,000 kilowatt hours a month will see increases in the range of 5 percent to 8 percent a year from 2008 to 2012, rather than a one-time increase when the rate cap expires in 2010.

Customers may withdraw from the program at any time and get full credit, including interest, for their advance payments. DeCampli stressed that participation in the phase-in program will not affect a customer's right to shop for generation supply.

"If competitive suppliers are offering lower prices, customers will be able to choose another supplier and reduce their electric bills," DeCampli said. "The electricity we are purchasing is for customers who do not have another supplier."

E-mail: pburns@lnpnews.com

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