In January, the removal of electric rate caps for PPL Electric Utilities may mean an increase in the generation charge of 30 percent or more.

Electricity consumers may opt to shop for their electricity from independent electricity suppliers, hopefully saving money.

PPL's electricity rates are 10.5 cents per kilowatt-hour. After the rate caps are removed on Dec. 31, PPL's rates will jump to about 13.8 cents per kilowatt-hour, according to George Lewis, PPL spokesman.

Because the state's electricity rates were higher than the national average, electricity rates were capped after all major utility companies in the state signed an agreement.

Under that agreement, generation, transmission and distribution rates were capped at the 1996 levels. Transmission and distribution caps already have been lifted.

"The last increase was for transmission costs. It took effect in November 2008 and totaled about 75 cents per month on the average customer's bill," Lewis said.

The increase in transmission rates supports projects to improve and modernize the transmission grid, which has been identified as a national priority since the last major blackout in August 2003, according to Lewis.

The agreement was a way to ease consumers into a fully competitive electricity market.

"The Pennsylvania Public Utility Commission has stated that without the caps, rates in Pennsylvania would have increased incrementally over the last decade to reflect those higher prices. Instead, Pennsylvania customers have saved $7 billion because of rate caps," Lewis said.

The rate caps fixed the portion of bills dealing with the charge for generation. The generation portion of the bill, or the electricity that is used, is the largest portion of the bill and makes up about 70 percent of the total electric bill for the average PPL customer.

Another 25 percent of the bill will reflect distribution charges and 5 percent for the transmission of the electricity.

But consumers will have options. They can stay with PPL and either just pay their electric bill or phase in the increase over a series of years. Or they may search for an alternative electricity provider.

"PPL customers can continue to purchase their electricity supply from PPL or they can elect to purchase their electricity supply from another electricity supplier.

Under all circumstances, PPL will continue to service its existing PPL customers and maintain their electricity distribution and transmission lines," said Stacy Richards, director of the energy resource center for SEDA-Council of Governments.

If a consumer is searching for another supplier, it is important to understand two things.

First, PPL still will be the transporter of the electricity, and the customer still will receive a bill for the delivery of the electricity.

Second, only a portion of the electric bill will change. The part of the bill that is affected is the generation portion or the amount of electricity that is used.

"The power lines that run down your street and into your home will still be operated by your local electric distribution company (PPL), and the rates for the delivery portion of your service will still be regulated by the Pennsylvania Public Utility Commission," according to the Pennsylvania Office of Consumer Advocate.