December 22, 2009

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PPL customers to get refund

HARRISBURG – The Pennsylvania Public Utility Commission approved a $30.16 million refund for PPL residential customers that resulted from PPL Electric Utilities Inc. overcollecting its competitive transition charge (CTC).

The Commission voted 5-0 to approve the revised CTC rates that reflect actual collection and reconciliation data. Because of an overcollection of the CTC, PPL will refund about $30.16 million to its residential customers and $2 million to its industrial customers. These consumers will see the “transition charge” portion of their bill move from a charge to a credit.

PPL undercollected the CTC from its small commercial and industrial customers by about $17.6 million, meaning those customers will continue to pay the CTC in 2010.

PPL was permitted to collect the CTC as a result of litigated proceedings following the adoption of the 1997 Electricity Generation Choice and Competition Act. The law permitted PPL to recover “stranded costs.” Stranded costs include investments in infrastructure made before the law was passed that may have become uneconomic and unrecoverable in a competitive environment.

In exchange for the recovery of stranded costs, generation, transmission and distribution rates were capped at 1996 levels. The caps on transmission and distribution rates all have expired. PPL’s generation rate caps expire Dec. 31, 2009.

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