Met-Ed to hike rate 10%

About $5 more per home. PUC allows partial rate hike.

Friday, January 12, 2007

By ANTHONY SALAMONE

The Express-Times

Customers of Metropolitan Edison Co. will pay about 10 percent more on their electric bills as a result of a decision Thursday by state regulators to grant the company a partial rate hike.

In response, Met-Ed said it will have to review how it delivers electricity.

"We are going to have to look at our operations at Met-Ed and determine what effect (Thursday's) ruling might have on future spending by the company," spokesman Scott Surgeoner said, following a vote to grant Met-Ed at $58.7 million annual rate hike.

The Pennsylvania Public Utility Commission approved the increase 4-0, Met-Ed's first since 1992.

For residential customers, it means a 10 percent jump, with the bill for a typical customer rising about $5, to $55 per month. Business customers will also face rate hikes.

The PUC's decision took effect Thursday, but Surgeoner said new rates would begin appearing on customers' bills either by late January or early February.

Surgeoner did not immediately have specific costs for business customers.

Overall, Met-Ed had sought a rate increase of at least $216 million to cover increased transmission and distribution costs. That total would have meant an 18 percent hike for residential customers.

In addition, the company sought an increase of about $1.3 billion during the next four years covering generation costs.

The PUC rejected the latter amount entirely.

At least one group argues Met-Ed should repay customers.

Citizen Power, which called the PUC's decision a "mixed bag," noted the agency has denied customers any share of $73.6 million in merger savings stemming from Met-Ed's acquisition in 2001 by FirstEnergy Corp. of Akron, Ohio.

That would mean at least a $15 million overall decrease, according to David Hughes, executive director of Citizen Power.

"Basically, if you net it out customers should be getting a refund," said Hughes.

Surgeoner said the merger savings have happened, noting another FirstEnergy subsidiary has reduced Met-Ed's generation costs by millions of dollars.

Others involved in the rate case were satisfied with the PUC's decision.

"It would have been a lot worse," said Consumer Advocate Sonny Popowsky, who argued Met-Ed was not justified in seeking the $1.3 billion covering generation.

Bangor Mayor Joseph Capozzolo, who also serves as chairman of the PUC Consumer Advisory Council, a volunteer group that advises the agency, said he understands that utilities sometimes need rate hikes to provide service.

"If some of the rate goes to provide better service and reliability, I'm all for it," added Capozzolo, who also is an owner of garment manufacturer Windjammer Inc., also in Bangor

Surgeoner indicated Thursday's decision could later affect how the company delivers electricity.

"Today's ruling means we're going to have to find ways to provide the distribution services that our customers expect and deserve for less than we were collecting 15 years ago," he said.

Met-Ed has 30 days to appeal the decision.

Anthony Salamone can be reached at 610-258-7171 or by e-mail at [email protected].