The state Public Utility Commission on Thursday approved Duquesne Light Co.'s plan to supply electricity to customers at a fixed rate, but for just three years instead of the six the company proposed.
The commission said its decision means that the average residential customer's bill will rise by about 7.2 percent, or $3.65, to $54.54 a month, based on usage of 500 kilowatt-hours. The rate takes effect Jan. 1 and runs through 2007.
Duquesne Light officials said they were disappointed with initial reports of the order and may appeal. The company's proposed plan would have extended set rates through 2010, with an initial increase of about 7 percent and another hike after three years of up to 5.9 percent.
The company was required to file the plan to cover customers who don't choose an alternative supplier under the state's Electric Choice program that took effect in 1996.
The commission approved several changes proposed by Commissioner Glen R. Thomas, who called the six-year rate plan too speculative.
"He thought six years was simply too long, to make a prediction on what the market price for electricity will be," PUC spokesman Eric Levis said. The commission wants customers to shop for the best price, he said, "and we think that when they shop, then the marketplace will take care of itself and produce the prices that are meant to be."
Morgan K. O'Brien, the utility's chief executive officer, said it worked with state and other experts and won an administrative law judge's approval for a plan to provide customers with "a reliable, secure energy source at reasonable prices -- for a six-year period.
"In addition to potentially exposing our customers to an uncertain energy marketplace in 2008, limiting our supply plan to three years likely will prevent us from providing service" at the rates the commission quoted, O'Brien added.
The commission also rejected the company's request to impose switching restrictions on customers. The proposal, for example, would have required residential customers who choose another supplier, and then return, to stay with Duquesne Light for a minimum one-year contract, the commission said.
