Dark future foreseen for cost of keeping region’s lights on
By ANNA TELATOVICH - atelatovich@sungazette.comArticle Photos
“I wish I had good news,” Donald E. Stringfellow, regional community relations director with PPL, told a group of local Kiwanians.
The average cost per kilowatt-hour for PPL customers is about 11 cents now.
The rate increase is predicted to raise that cost 14.05 cents.
A kilowatt hour is equal to 1,000 watts of energy for one full hour — the equivalent of running a 100 watt light bulb for 100 hours.
A monthly bill, which covers the cost of the electricity and “cost to deliver it” could increase 35 percent, Stringfellow said.
He explained why the rate caps are being removed across the utility industry. “The primary driver for the price increase is the cost of the fuel to produce the electricity,” Stringfellow said. “Coal and natural gas have doubled in price in the past 10 years. Oil has more than doubled.”
About 50 percent of electric generation is by coal, about 4 percent by nuclear power and “the rest by (hydro-electricity) and gas.”
He added other factors, like the rising costs of materials and equipment and costs to comply with environmental regulations have effected companies too. “In this PPL area in the past 10 years we spent around $1.6 billion to comply with environmental regulations,” he said.
In the past 10 years, electricity consumption has increased 20 percent or better, Stringfellow added.
Electric deregulation began in the mid 1990s in the state and rate caps have shielded customers from price increases since then. “The caps have been in place now for a decade and will expire the end of 2009,” he said.
Rate caps have stifled consumer choice, because other companies could not exist and keep prices below the rate cap, and wind and solar energy costs cannot compete with a capped utility rate.
In other parts of the state, caps have been removed and competing utility companies have entered the market, Stringfellow said.
Because more utility companies will be able to enter the market, customers will have the opportunity to “shop around” for a new provider.
For the customers who don’t look toward other companies, Stringfellow said PPL has taken bids and purchased electricity for years to come. “Thus far, we’ve signed contracts for half of the power that we’ll need for those of you who don’t shop when the option comes around. We’ve done this to give customers greater control over their bills.”
The most important thing for customers to know about the rate cap removal, Stringfellow said, is how they use their energy. “They need to start now to look at is if they are using energy wisely and do they need to do some things to increase their energy efficiency .”
On PPL’s Web site, www.pplelectric.com, an energy analyzer allows customers to see their daily electric use. “By the time 2010 rolls around, we expect to have that available hourly and people can really plan and take advantage of time-of-use options.”
On the site, customers can break down their electricity usage and receive personalized energy saving tips.
For those concerned about paying an increased bill customers may be able to pre-pay their bill. The plan, proposed to the Public Utility Commission, will “allow customers to pay in advance, or prepay, into their accounts and that money plus six percent interest will be used to offset the increases so instead of seeing a double-digit increases, they’ll see single-digit percentage increases.”
