Duquesne Light rate hike deal eyed
The average Duquesne Light ratepayer would be hit with rate increases of more than 11 percent under a comprise the electric company reached with state regulators and other groups.
The agreement would allow Duquesne Light to collect an extra $48 million in revenue annually from rate hikes, effective May 1, on more than 580,000 residential and business customers in Allegheny and Beaver counties.
The deal is a compromise pushed by the Public Utility Commission, consumer advocates and businesses to cut the company request to raise an extra $76.3 million in annual revenue, an increase that would have resulted in an average rate hike of 17 percent for its customers.
The money will go to help pay for costs including pensions, customer service upgrades and tree trimming around its electric grid, according to the company.
Without the hike, the company would have had a rate of return barely above the interest rate it pays to bondholders and only about 60 percent of what the commission approved for another utility in 2012, the company said in a statement attached to the settlement.
The Office of the Consumer Advocate, which had originally suggested Duquesne Light get only an $18.4 million increase, called the settlement “a reasonable compromise” and said that it “should alleviate the impact” of the rate increase on residential customers.
The PUC had opened a formal investigation of the rate increase request in September, and the administrative law judge overseeing the case still has to recommend a decision on the settlement for the commission to have a final vote, a PUC spokeswoman said.
The settlement was filed on Jan. 16 but has not been widely reported outside of trade publications.
The original request put most of the burden on residential rate payers, with rate hikes for them as high as 23.7, according to figures from the Office of the Consumer Advocate. Instead, residential customers will see rates increase by an average of just above 15 percent if the deal is approved.
Small and medium-sized businesses will face an average rate increase of about 9.4 percent. Large businesses would see an average rate increase of about 7.2 percent, under the terms of the agreement.
“The revenue increase provides the company with the reasonable opportunity to earn a fair return,” Duquesne Light said in its supporting statement. “The settlement reflects a carefully balanced compromise.”
Timothy Puko is a staff writer forTrib Total Media. Reach him at 412-320-7991 or tpuko@tribweb.com.
