PPL Electric Utilities - settlement authorizes $275 mln increase in annual base distribution revenues

PPL Electric Utilities has reached a settlement agreement in its Pennsylvania rate case, which would increase its annual base distribution revenues by $275 million, a reduction of about 23% from the $356.3 million originally requested. The proposed settlement, filed with the Pennsylvania Public Utility Commission (PUC), would raise average residential electric bills by 4.9%, bringing the monthly average to approximately $184. If approved, the rate increase would take effect on July 1, 2026, marking PPL Electric’s first distribution rate hike since 2016.

The settlement includes the creation of a new tariff for large load customers, such as data centers, with a peak electric demand of 50 MW or greater at a single facility or 75 MW or greater in aggregate among facilities within a 10-mile radius. These customers would be required to enter into long-term service agreements with minimum load guarantees and exit fees, and would contribute $11 million annually to PPL Electric’s residential low-income program.

The agreement also includes provisions to enhance customer service and universal service, such as increasing hardship fund bill credits, eliminating reconnection fees, and streamlining the return of security deposits. Additionally, the settlement would update PPL Electric’s Storm Damage Expense Rider (SDER) to align storm cost recovery with expected expense levels, setting the annual recovery at $32 million, up from $20 million.

PPL Electric’s interconnection pipeline includes approximately 20 GW of contracted large loads, which the company said could more than double its system demand in 5-6 years. The utility emphasized that without appropriate protections, this growth could lead to stranded assets, unrecovered costs, and cross-subsidization from other ratepayers.

The settlement was supported or unopposed by most parties in the rate case, with limited objections raised by two parties concerning certain provisions related to large net metering customer classification. If approved, distribution base rates would be frozen for at least two years.

The proposed rate increase is part of a broader effort to support ongoing investments in a safe, reliable, and resilient electric system while maintaining affordability and service for customers.