HARRISBURG - A settlement agreement filed Thursday (8/26) with the Pennsylvania Public Utility Commission would increase PPL Electric Utilities’ overall annual revenues by about $77.5 million, or 1.6 percent, beginning Jan. 1, 2011. 

The increase will allow the company to begin recovering the cost of nearly three years of distribution system improvements. In addition, it will improve the company’s ability to attract capital funding for ongoing efforts to replace aging infrastructure and to maintain excellent reliability for customers.

The increase proposed in the settlement agreement still must be approved by an administrative law judge and the commission.

“We’re pleased we’ve reached this agreement, which balances the company’s needs and our customers’ interests,” said David G. DeCampli, president of PPL Electric Utilities. “The increase will help us keep reliability strong and maintain quality service for all those who count on us every day. It’s critical as we’re increasing investment to modernize our delivery system and upgrade aging infrastructure.”

Before any formal PUC action, the administrative law judge will issue a recommended decision on all aspects of the company’s request, including the settlement agreement and the allocation of any increase among customer classes. The settlement does not address how actual rates would change for different types of customers. The judge is expected to make a recommendation on the case this fall with the commission making a final decision by the end of the year.

The settlement was reached with parties to the rate proceedings, including the state’s Office of Consumer Advocate and the PUC’s Office of Trial Staff. The company’s original rate proposal requested a total of $114.7 million in additional revenues.

The increase would only affect the distribution portion of customers’ electric bills. Distribution accounts for about one-fourth of the typical electric bill.