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PPL says electric rate for businesses to drop 12 percent; residential rate flat

By: Jim Lockwood |

The summer electricity price for a small-business customer of PPL Electric Utilities that doesn’t shop for a better price will drop 12 percent, for a $9.25 decrease in an average monthly bill.

The residential customer price will fall less than a penny per kilowatt hour, shaving 14 cents off an average monthly bill.

PPL on Tuesday announced its “price to compare” for small business and residential customers who don’t shop around for better deals. The prices, which take effect June 1, include:

n Small businesses: a decline from 7.701 cents per kilowatt hour to 6.776, or a 12 percent decrease. That will translate to $9.25 drop in average monthly electric bills for small businesses, or down to $114.43 per month.

n Residential: a decrease from 7.463 cents per kilowatt hour to 7.449, or a drop of less than 1 percent. This will cut 14 cents off an average monthly residential bill, or down to $135.37 per month.

A kilowatt-hour is the amount of energy consumed when 1,000 watts are used for one hour.

Customers can shop around for different generators using the Public Utility Commission’s website, www.papowerswitch.com or by calling the commission at 800-692-7380 for more information.

Utilities buy electricity wholesale on six- and 12-month contracts, with separate contracts for business and residential customers.

Utilities profit from distribution charges, but the cost of electricity is passed through from the generator to customers unchanged.

As prices derive from a variety of factors, including energy contracts and transmission charges, it’s not unusual for residential and small-business prices to move in different ways, independently of each other, said PPL spokesman Kurt Blumenau.

On the residential side, energy contracts rose slightly but were offset by a drop in the transmission charge, leading to essentially a flat price, he said.

The 12-percent decrease in small-business price stems from a combination of new, lower energy contracts and a reduction in the transmission charge, he said.

“This 12 percent decrease, while notable, is not a record,” Blumenau said.

For example, prices for the six-month period of June 1, 2015, to Dec. 1, 2015, fell 14 percent (8.982 cents to 7.731). Prices for the period of Dec. 1, 2015, to June 1, 2016, dropped another 14 percent (7.731 cents to 6.664 cents).