Met-Ed's residential customers could pay an extra $20 a month if the company's rate increase is approved by the Pennsylvania Utility Commission.
First Energy on Monday filed a request with the PUC to increase rates for all of its subsidiaries in the state: Met-Ed, Penelec, Penn Power and West Penn Power.
The rate plan filed for Met-Ed will increase a residential customer's average monthly bill by 18 percent — from $117 to $137 — assuming the customer uses 1,000 kilowatts of electricity per month.
Commercial customers will see monthly bills increase 7 percent, from $886 to $950.
Industrial customers will see a 2 percent increase in their monthly bills, from $444,862 to $454,141.
The reason: One of the main reasons Met-Ed is seeking a rate increase is to recoup costs incurred during hazardous weather, said company spokesman Scott Surgeoner.
"We have more than $20 million in storm costs from the last three years that have not recovered," he said.
If approved, the rate increase will give Met-Ed an extra $152 million in revenue per year, according to PUC filing.
This is Met-Ed's first rate increase filing in eight years.
While quarterly generation rates — the actual cost of electricity — have changed during that time period, they didn't fluctuate at Met-Ed's request.
The 1996 state Competition Act ensured Met-Ed has no control over generation rates. Those rates are controlled by suppliers and market demand. Met-Ed delivers electricity to its customers without making a profit on generation rates.
Distribution costs: But the company can make a profit on its distribution rate, which is the cost for Met-Ed to deliver electricity.
The distribution rate also pays for infrastructure, utility trucks, salaries and other operational costs.
"The cost of materials, wires and fuel are much higher. The cost of doing business is higher," Surgeoner said.
Met-Ed previously asked for higher base rates in 2006, when the company asked the PUC to approve a 19 percent rate increase that would have raised customer bills by $9 a month.
Following an investigation, the PUC approved a smaller rate increase for Met-Ed. The commission allowed the utility company to increase residential bills by about $5 a month — a 10 percent increase on the then-average $50 monthly bill.
What the PUC will decide this time is unclear.
The commission has two months to suspend the rate increase and launch an investigation into Met-Ed's proposal, per the standard rate-making process, said Robin Tilley, PUC spokeswoman.
The rate increase will go into effect Oct. 3 unless the PUC votes to review it.
If the commission decides to investigate the rate plan, it will have seven months to issue a decision, she said.
"It could go several ways. The commission could approve all of it or some of it, or make some amounts more or less," Tilley said.
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