PPL Electric Utilities Files Default Service Electricity Purchase Plan for Two Years Starting in June 2013
PPL Electric Utilities

PPL Electric Utilities on Tuesday (5/1) filed a plan with the Pennsylvania Public Utility Commission to purchase its electric supply for default customers from June 1, 2013, through May 31, 2015. Default customers are those who do not choose to buy generation service from a competitive supplier.

All electricity customers in Pennsylvania have the right to choose the company that provides their generation supply. State law requires PPL Electric Utilities to provide electric supply at the least cost over time to customers who do not choose an alternative supplier.

In its plan, PPL Electric Utilities proposes to buy this electricity for June 2013 through May 2015 twice a year, beginning in April 2013.

Under the plan, the company would solicit supply contracts for nine- and 12-month increments as well as for hourly purchases in the open market during the contract years. The sole exception will be the last procurement in the series, which would be for three- and six-month contracts.

PPL Electric Utilities does not own power plants or produce electricity. By law, the company must buy power in the competitive electric market for customers who don’t choose another supplier and pass these costs directly to customers without profit. These charges appear on customers’ bills as the Generation Charge. Generation and transmission charges together represent the “Price to Compare” for shopping purposes and account for about two-thirds of the total electric bill.

The proposed default service purchase plan differs from PPL Electric Utilities’ current purchase plan in the following regards:

  • The utility currently buys generation supply four times a year. Under the proposed plan, it would do so twice a year.
  • About 10 percent of supply for residential customers is currently bought in hourly purchases on the open market. Under the proposed plan, residential customers would receive essentially all of their power through nine- to 12-month contracts. Energy bought in hourly purchases would continue to be used for large commercial and industrial customers.
  • PPL Electric Utilities currently adjusts its Price to Compare four times a year – on March 1, June 1, Sept. 1 and Dec. 1. Under the proposed default service purchase plan, the utility would adjust its Price to Compare twice a year.

Dennis Urban, senior director of Rates and Regulatory Affairs for PPL Electric Utilities, said the utility’s new purchase plan is intended to simplify the power acquisition process, while also complying with PUC recommendations as part of its efforts to expand consumer participation in the competitive electric market.

To encourage greater consumer participation in the competitive electric market, PPL Electric Utilities is proposing additional customer education initiatives. It also is proposing a retail opt-in auction and a standard offer program. Under these proposals, customers will have an opportunity to purchase their electricity from competitive suppliers at a discount from PPL Electric Utilities’ Price to Compare.

Under the company’s proposal, an independent third party would administer the competitive bidding process of securing power supply contracts and, with PUC oversight, select the winning bidders that will provide generation supply at the lowest available cost to PPL Electric Utilities’ customers. PPL Electric Utilities also will seek bids from other companies to manage its hourly purchases in the competitive electricity market.

For more information about licensed suppliers serving PPL Electric Utilities’ service area and their offers, visit PAPowerSwitch.com, a website operated by the PUC. More than 30 licensed suppliers provide generation service to roughly 580,000 PPL Electric Utilities customers, representing nearly 74 percent of all electricity delivered.

“We encourage all customers to learn about the supply alternatives open to them and choose the option that best suits their needs,” Urban said.

The company’s plan must be reviewed and approved by the PUC. That review is expected to take up to nine months.

Currently, PPL Electric Utilities has contracts with 15 electric generation suppliers for supply for default customers. The supply portfolio is a mix of short and mid-range contracts and spot market purchases.

PPL Electric Utilities Corporation, a subsidiary of PPL Corporation (NYSE: PPL) that provides electricity delivery services to about 1.4 million customers in Pennsylvania, has consistently ranked among the best companies for customer service in the United States. More information is available at http://www.pplelectric.com/.

For further information: Kurt Blumenau, 610-774-5997, PPL Electric Utilities
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