Peco on Thursday filed for a 2.2 percent rate electric increase amounting to $82 million that would go into effect on Jan. 1. A monthly bill for a residential customer using 700 kilowatt hours would increase by $3.28 to $105.93, or 3.2 percent. Bills for commercial and industrial customers would increase by about 1 percent.
The Philadelphia utility, which serves 1.6 million electric customers in Southeastern Pennsylvania, said the request filed with the Pennsylvania Public Utility Commission includes about a $71 million in savings from the 2017 Tax Cuts and Jobs Act.
Peco last filed for a rate increase in 2015.
Complicating the filing, the company said the impact of the rate increase would be initially reduced because it plans to refund $68 million it already collected from ratepayers for federal taxes that decreased on Jan. 1. The credit would be applied in the form of “reconcilable surcharge.”
Peco said it needed the higher rates to cover its higher costs and to pay for enhancements to the utility’s distribution system.
The filing represents a continuation of Peco’s long-term effort to shift more of the burden from per-kilowatt hour charges to its fixed monthly fee, making the utility less dependent upon volume sales of electricity, which are generally flat.
The company proposes to increase the fixed customer charge from $8.45 to $12.50 a month while reducing its distribution charge from 6.359 cents per kWh to 6.267 cents.
Bills for a typical small business customer would increase by about $11.06 per month, or 1.3 percent, and bills for a large business customer would increase by about $168.99, or about 1 percent. Those increases would be offset initially with the tax reduction.
Rate requests undergo an extensive review by the PUC staff and by advocates for different customer classes that typically results in a negotiated settlement, which is subject to approval by the commission.