PPL Electric Utilities Corp. won approval last week from the state Public Utility Commission to begin a long-term infrastructure improvement plan.
The PUC voted unanimously Thursday to approve PPL's plan, the first to be approved under Act 11 of 2012. PPL plans "to accelerate infrastructure replacement over a period of five years," the PUC said.
PPL plan calls for $137 million in improvements this year and $705 million over five years, company spokesman Michael Wood said.
Act 11 was passed to encourage utilities to shore up their infrastructure and improve reliability. The law allows them to institute a "distribution system improvement charge" to recover the cost of the work.
The PUC must approve an infrastructure improvement plan before a utility may file for permission to implement an improvement charge, Wood said. PPL plans to file the latter application this week, he said.
Typically, about 25 percent to 35 percent of a utility bill covers distribution and customer service, with the rest going to the power supplier, Wood said. Act 11 caps improvement charges at 5 percent of the distribution charge. Thus, if 25 percent of a $100 utility bill went toward distribution, the maximum improvement charge would be $1.25.
PPL tentatively plans to institute the charge May 1, assuming no holdups in the PUC approval process, Wood said. The charge will generate enough money for PPL to cover the financing of the money it raises for the infrastructure work, he said.
Commissioner Pamela Witmer and Chairman Robert Powelson issued a joint statement praising PPL's proactive stance in submitting the plan. Commissioner James Cawley, however, expressed disappointment that PPL's plan appears geared only toward maintenance rather than enhancement and said he voted for it "begrudgingly."
In December, the PUC approved rate hikes for PPL that will bring the utility more than $70 million a year.
Based in Allentown, PPL serves about 1.4 million customers in Pennsylvania, of which a little less than one-third are in the midstate.