The Pennsylvania Public Utilities Commission on Thursday approved a settlement with PPL Electric Utilities that will increase the utility’s distribution rates for the first time in a decade, a move that will increase the average customer’s electricity bills by about $7 a month.
The rate hike, set to take effect July 1, is slightly less than the initial increase the utility requested in the fall, and which was criticized by consumers already feeling the squeeze from rising electricity costs.
PPL’s original rate hike proposal would have meant that, for a residential customer using 918 kilowatt-hours of electricity per month, the total monthly bill would increase from $177.01 to $189.40, or about 7%. The agreement cuts that increase to approximately $184.49, or 4.9%.
The initial proposal was projected to increase PPL’s annual revenue by $356.3 million. Under the settlement, that number drops to $275 million.
The rate hike settlement comes just days after the PUC announced new electric generation prices for all state-regulated electric utilities effective June 1. Under those new prices, separate from the rate hike, PPL’s kWh rate increased 1.5% from 12.953 cents to 13.147 cents, according to the PUC.
In a news release, PPL said the settlement reflects broad agreement among customer advocates, environmental and business interests, and other stakeholders.
“This decision reflects a thorough and rigorous review of the company’s request and past performance,” Christine Martin, president of PPL Electric Utilities, said in the statement. “This strong outcome supports our commitment to deliver safe and reliable electric service to our customers. It enables us to continue making critical investments to strengthen reliability — helping reduce outages and operate more efficiently — while expanding protections and support for the customers and communities we serve.”
The company said the increase in the base distribution rate was needed to replace aging infrastructure, expand vegetation management, advance smart grid technology and improve customer service systems.
“This proceeding reflects one of the central challenges facing utility regulation today — balancing the investments necessary to maintain a safe and reliable electric system with the affordability concerns facing households and businesses across Pennsylvania,” PUC Chair Steve DeFrank said in a statement. “The settlement significantly reduces the company’s original request while also securing meaningful commitments related to reliability, customer service, low-income assistance and accountability. At a time when the electric system is facing unprecedented change, those investments and protections matter.”
As part of the settlement, PPL will expand low-income assistance and waive reconnection fees for income-eligible customers. It also will not increase distribution rates for at least two years.
PPL also has established a new “large-load” customer rate class to ensure that increased usage from customers such as data centers aren’t passed on to other ratepayers. In 2027, those large-load customers also will be charged mandatory fees to fund $11 million a year in low-income program assistance.
“As electricity demand grows, our priority is to maintain reliability, transparency and fairness,” Martin said. “These provisions ensure customers driving new infrastructure needs pay their share and existing customers are protected while supporting continued investment and economic growth.”
Other terms of the settlement include annual reliability accountability reports and continued incentives for off-peak electric vehicle charging.
A last-minute change to the agreement regarding agricultural customer-generators means the settlement will not go into effect for five days. Should neither party withdraw from the agreement, the new rates will go into effect July 1.
