PUC sets Duquesne Light review

By Kim Leonard

Friday, May 5, 2006

State utility regulators soon will start their dissection of Duquesne Light Co.'s request for an electricity rate increase, a lengthy process that could trim the hike and keep customers' bills from rising as sharply in January as anticipated.

The Public Utility Commission voted 5-0 Thursday in Harrisburg to assign the $143.7-million-a-year increase in base distribution rates to one of its administrative law judges, a routine step.

From there, a review process could take about seven months and will include one or more hearings in Duquesne Light's service territory, primarily Allegheny and Beaver counties, PUC spokeswoman Jennifer Kocher said.

"We do a full accounting of the company," she said. "We look at improvements they have made, or that are in their plans. We look at profit levels and capital needed to do additional work and determine from there what rate is reasonable. Many times, companies don't get what they request. Sometimes, they do."

The judge's recommendation and any responses from the company, consumer activists and others interested in the case will be considered when the commission takes its final vote. The Downtown-based utility wants to begin charging the new rate -- 5.67 cents per kilowatt hour, up from 4.13 cents -- in January.

Duquesne Light also will seek an increase in its power transmission rate from 0.25 cents to 0.67 cents per kilowatt hour in an October filing with the Federal Energy Regulatory Commission, spokesman Joe Balaban said. That hike would raise $19 million and also would take effect in January.

If approved, the two base rate hikes would raise the average residential customer's monthly bill from $63.87 to $75.86. The figures are for customers using 600 kilowatt hours a month.

The utility said it needs to increase revenue as it continues its $500 million upgrade to wires, poles, transformers, substations and other infrastructure in its service area, with 587,227 customers.

Squirrel Hill-based Citizen Power and the environmental advocate group Citizens for Pennsylvania's Future plan to participate in the PUC's review.

"This is a big jump in rates at one time," Citizen Power Executive Director David Hughes said, adding Duquesne Light will get some increase in January, then probably another one in January 2008 after the current generation rate -- the third part of a customer's bill -- expires late in 2007.

Penn Future wants Duquesne Light to install modern meters that gauge each customer's usage, hour by hour, and can lead to incentives for them to use less electricity during peak times, President and CEO John Hanger said. The group also likely will press for the company to invest more in sources of clean energy, such as wind farms.

Kim Leonard can be reached at kleonard@tribweb.com or (412) 380-5606.


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