Utility seeks rate increase - 14.5 % average hike

MILFORD — Pike County Light & Power Company (PCL&P) last Friday filed an electric base rate case with the Pennsylvania Public Utilities Commission for an increase in electric delivery rates. PCL&P is seeking an increase of approximately 9.6 percent overall in its annual electric delivery revenues, about $1.2 million. If approved, this increase would not go into effect until April 2009 and would be the first PCL&P electric base rate increase since 1993. The increase comes about two and a half years after PCL&P rates doubled when state ordered rate caps were removed. If this proposed filing is approved by the commission, the total electric bill for a typical residential electric customer using a monthly average of 660 kilowatt-hour would increase by $15.90 per month, from $109.47 to $125.37, or a 14.5 percent increase from today’s bills. Pike County government officials would not speak on the record about the increase. “I’m too angry at this point and if I say what’s on my mind — I’ve got to deal with people again,” one said privately. The utility says electric system reliability improvements and customer service enhancements are the key drivers prompting the new increase request. According to a utility statement, “The proposed rates are necessary to provide sufficient operating revenues to meet operating expenses, taxes and fixed charges and provide a reasonable rate of return on PCL&P’s investment in electric property. The proposed rates also enable PCL&P to maintain its creditworthiness at a level sufficient to raise the capital required to properly perform its obligations to provide safe, adequate and proper service to its electric customers.” PCL&P Vice President for Customer Service, James O’Brien said, “No one likes a rate increase. There’s no good time to propose one, and we recognize that fact of life. We’ve held the line on a delivery rate increase here for 15 years due in large part to our success in continuing to achieve increased productivity and greater operating efficiencies in our business. Now, we have reached the point where we require additional investments to continue to meet our customers’ needs.” The utility is also proposing an alternative three-year rate plan for its electric operations, which, if adopted, would establish rates for the three-year period ending in March 2012. While the percentage and dollar impacts for the company’s three-year proposal currently are not available, the monthly bill impacts for customers would be lower under a three-year plan than a one-year plan. The company expects that the percentage and dollar impacts associated with its three-year proposal will be fully developed through the commission’s rate case process. This rate filing only covers the cost of delivering electricity to PCL&P customers. The utility said that other two components that affect a customer’s monthly electric bill are: the cost of the electricity itself which represents approximately 72 percent of a typical residential customer’s bill and is set by unregulated market activity, and the amount of electricity the customer uses. Both of those components have grown substantially since 1993. Since PCL&P’s last rate increase in 1993, the typical residential customer’s monthly usage has increased 18 percent, from 559 kwh to 660 kwh. See related story on page 19 The improvements already implemented by PCL&P include: Upgraded the electric system and those upgrades have substantially improved PCL&P service reliability results. Shortened the tree-trimming cycles. About one-third of all our outages are tree-related. More trimming will help and that will be done every three years, beginning at the end of this year. Opened a new customer service office in Milford The improvements due to be implemented by PCL&P in the next 18 months include: Build a new supplemental circuit along Route 209 that creates a by-pass route for electricity should problems develop on the main circuit. That will help improve electric service and be ready for this summer. Begin capital-related tree-trimming project along Route 209. Implement a circuit maintenance and pole inspection program Purchase land for the proposed future Milford substation. Expand distribution automation program that would decrease the number, duration and scope of electric service outages. Another driver of the rate increase request is PCL&P’s capital investment of $7.7 million since 1993. Most of that sum was invested in the construction of a new electric substation in Matamoras that enhanced service reliability for the entire PCL&P service territory. PCL&Pt provides electric service in Pike County to approximately 4,600 customers in Westfall, Milford and the northern part of Dingman and in the boroughs of Milford and Matamoras. Pike County Light & Power Company (PCL&P) is a wholly owned subsidiary of Orange and Rockland Utilities, Inc. (O&R), which is a wholly owned subsidiary of Consolidated Edison, Inc.