PPL Electric Utilities customers live in a topsy-turvy world.

The Allentown utility on Friday announced new quarterly supply rates for its customers, including an increase of more than 64 percent for customers who signed up for hourly time-of-use rates.

The rates of small commercial customers will increase 33 percent on June 1.

But most residential customers - nearly 900,000 of the utility's 1.4 million customers - will see a 5 percent decrease.

The rate adjustments do not affect about 38 percent of PPL customers who have switched to alternative suppliers in the utility's deregulated marketplace.

PPL Spokesman Michael O. Wood said the 21,000 customers who switched to hourly rates this year can switch back to the utility's flat default rate immediately. He said most are expected to switch.

In Pennsylvania's deregulated marketplace, utilities must adjust their supply rates quarterly to reflect fluctuations in the electric commodity markets. The utilities pass the costs along to customers without markup.

The quarterly changes don't affect the utility's distribution charge, which all customers pay no matter who supplies their power.

More than 538,000 of PPL's 1.4 million customers have switched suppliers since the market rates took hold 17 months ago, a year ahead of Peco Energy Co.'s rates.

The most severely affected customers will be those who opted for PPL's new two-tiered time-of-use rates, which charge a higher price during peak hours, between 1 p.m. and 6 p.m. on weekdays.

Customers who signed up for those rates, which were steeply discounted during the winter, were warned they would likely increase in the summer. Now comes the rate shock.

The price for on-peak hours, between 1 and 6 p.m. on weekdays, will increase 64 percent, from 7.54 cents per kilowatt hour, to 12.37 cents.

The price for off-peak hours will increase 75 percent from 6.1 cents per kilowatt hour to 10.65 cents.

The new price to compare for PPL's 900,000 residential customers who have stayed with the utility will be 8.77 cents per kilowatt-hour, a decrease from the current 9.27 cents per kWh. A typical residential customer using 1,000 kWh monthly will save about $5.

Wood said the dramatic difference in prices is the result of the different way the Public Utility Commission requires the utility to procure power.

PPL's default rate is based on a combination of long-term and shorter-term supply contracts - "a balanced portfolio that aims to secure the least costs for customers over time," he said.

The time-of-use rates are based on short-term spot markets, and so they vary more dramatically.

PPL serves customers in 29 counties in eastern and central Pennsylvania, including parts of Bucks, Montgomery and Chester Counties.

For more information: www.pplelectric.com/choice or www.papowerswitch.com

Contact staff writer Andrew Maykuth at 215-854-2947 or amaykuth@phillynews.com.