Questioning the profit levels
Storm repairs generally are part of a utility's cost of doing business and, as such, are reflected in the rates that consumers pay for services.
Now that the Public Utility Commission yet again has betrayed consumers by allowing PPL Electric Utilities Corp. to add a separate rider to bills to cover storm damages, the question is how much of a rate reduction consumers will receive.
No drum roll is necessary. The answer is zero.
Under the ruling, PPL will be able to charge customers for net annual storm damage costs exceeding $14.7 million - the amount of its current rate structure that the utility allocates to storm damage repair - beginning in January.
The utility told the PUC that the rate is necessary to carry the utility between rate cases, but there is no indication that the fees will mitigate future rate increases.
According to the utility, the fees will be good for consumers because it will help ensure reliability - which most consumers probably thought was included in the base rates.
So, beginning in January, rates only partially will dictate what consumers will pay PPL; the final bill will depend on the weather.
After Superstorm Sandy in 2012, PPL reported restoration costs of $81 million. After January, such an event would add $66.5 million to consumers' power bills.
In effect, the fee places 100 percent of the risk on PPL customers, eliminating any storm-related risk for utility investors.
"If the risk is being shifted to ratepayers, we have to question the profit levels in their base rate-making cases," said acting Consumer Advocate Tanya McCloskey.
Consumers will question that. The less certain matter is whether the Public Utility Commission will question it.