Peco makes an offer on 2011 rate increase

Ten days before the start of a special session of the Pennsylvania legislature to address concerns about rising energy prices, Peco Energy offered a set of initiatives yesterday that it said would help "ease the transition to competitive energy markets."

The state's largest utility, a subsidiary of Chicago-based Exelon Corp., said it planned to phase in a 15 percent to 20 percent rate increase that it now anticipates when price caps expire at the end of 2010.

The company also said that it would expand assistance to low-income customers, offer "aggressive conservation and load-management programs," and begin a phased installation of high-tech "smart meters" and time-of-use billing.

But the company stopped short of agreeing to key elements of Gov. Rendell's energy program scheduled for consideration when the legislature returns Sept. 17, including a proposal that would require the state's utilities to install advanced meters within the next six years.

Rendell says the meters, coupled with real-time pricing that reflects the actual cost of power during peak and off-peak periods, are crucial to averting the sort of double- and triple-digit rate increases that have occurred as price caps have expired in other states.

Peco president Denis O'Brien said the company would soon file a plan with the Public Utility Commission to begin such a program, and to install the meters "within the next six to 10 years."

"We believe this kind of program can help our customers reduce their bills, reduce the demand for energy, and thereby reduce energy prices overall," O'Brien said in a statement.

O'Brien said Peco officials "are prepared to work around the clock to negotiate with the Rendell administration, the General Assembly, and other interested parties to finalize the details of the programs and the cost-recovery mechanisms."

A Peco spokeswoman, Mary Rucci, said the statement was intended to clarify the company's positions before the start of the special session.

Rucci said the promise to phase in a 2011 rate increase was unrelated to the recent controversy in Illinois over post-cap rate increases by Commonwealth Edison, the Chicago-area utility also owned by Exelon.

Under pressure from Illinois lawmakers, ComEd recently agreed to roll back $1 billion in rate increases over a four-year period. The company said it had agreed to the rollback as "a one-time contribution to help customers transition to market rates."