PPL Electric Utilities president testifies in support of alternative rate mechanisms

PPL Electric Utilities President Greg Dudkin testified recently before the Pennsylvania House Consumer Affairs Committee in support of H.B. 1782, which would provide for alternative rate mechanisms that would decouple utility revenues from electricity sales.

“Decoupling will help keep the electric grid strong and secure, it will benefit the environment by embracing energy efficiency and new energy technologies, and it will help PPL continue to welcome and support customers who want to install their own solar panels,” Dudkin said.

The legislation could also enable performance-based rates, which would help hold utilities accountable for key performance measures, such as reliability, on behalf of customers, PPL said in a press release.

Under decoupling with a multi-year rate plan, the type of decoupling PPL is advocating, the public utility commission (PUC) approves utility revenues in advance. Utilities can then collect only that fixed amount over a multiple-year time period. Regular rate “true-ups” would adjust customers’ price per kilowatt-hour to account for any over- or under-collection of the utility’s approved revenues.

The average customer would not notice much difference between the current rate structure and decoupling, Dudkin said. Customers would still pay per kilowatt-hour for electricity, and customers who use less electricity would still have smaller bills. The PUC would still approve the electric delivery rates utilities could charge.

“The electric grid is evolving, from simply delivering electricity to being part of a smarter energy future,” Dudkin said. “Decoupling would help enable us to do our part to keep the grid strong and reliable, and to making sure it’s not vulnerable to cyber- or physical attack.”