For the first time in 20 years, area residents could soon pay
more for electricity as part of a proposed 13.5 percent rate hike
by Penelec, company officials announced Tuesday.

The increase would fall in line with other utilities – including
natural gas and heating oil – and will be used to cover the
company’s generation costs. FirstEnergy Corp., the parent company
of Penelec and Metropolitan Edison, filed the rate request with the
Pennsylvania Utility Commission Monday.

“While our rates have remained stable for the past 20 years, the
overall price of doing business in Pennsylvania has increased
dramatically,” Scott Surgeoner, a spokesperson for FirstEnergy,
told The Era. “We would like to maintain Penelec’s financial
integrity, but at the same time lessen the impact on our
customers.”

According to Surgeoner, the average residential customer using
500 kilowatt hours a month would experience an increase in rates
from $47.62 a month to $54.04 – an increase of $6.42 or 13.5
percent.

Meanwhile, Surgeoner said commercial customers using 15,000
kilowatt hours a month would have a monthly increase from $1,265 to
$1,418 – a hike of $153 or 12.1 percent. Lastly, industrial
customers using 500,000 kilowatt hours a month would experience a
rate hike from $29,994 to $33,758 – an increase of $3,764 or 12.5
percent.

Penelec will see an overall rate increase of 15 percent – or
$157 million for 2007. Officials said combined with Met-Ed,
FirstEnergy is looking to increase electricity rates by $1.4
billion over the next four years.

Residential customers using Met-Ed will see their monthly bills
rise from $50.10 to $58.93, or 18 percent.

Surgeoner said Penelec has 588,000 customers statewide,
primarily in the northern and central portions of the state.
Bradford is in the company’s Erie region. By comparison, Met-Ed
services 526,000 customers in eastern and southeastern
Pennsylvania.

In defending the potential increase, Surgeoner said since
Penelec’s last increase home heating costs have risen by 309
percent, natural gas by 171 percent, a gallon of gasoline by 143
percent and coal by 171 percent.

“The PUC has final approval of a rate request over Penelec,”
Surgeoner said. “We’re hopeful the PUC will act as expeditiously as
possible. We could see the rate changes sometime in the first
quarter of 2007.”

Asked about the chances of being denied the increase, Surgeoner
said it was too early to speculate on that possibility.

“Hopefully, the PUC will act upon our request,” Surgeoner said.
“We are always willing to sit down and discuss our request and
issues surrounding it with them (PUC) and our other
stakeholders.”

According to The Associated Press, about $990 million of the
$1.4 billion requested by FirstEnergy would be used to cover the
generation costs. However, state law caps those costs until the end
of 2010; FirstEnergy is asking the PUC to go above that
threshold.

Surgeoner told The Associated Press the company believes it can
go over that mark, noting a rate-restructuring agreement which put
the caps in place called for 80 percent of Penelec and Met-Ed
customers to buy electricity from competing electric companies.

However, the company never approached that percentage, according
to Surgeoner.

Based in Akron, Ohio, FirstEnergy is the nation’s fifth largest
investor-owned utility.

Customers with questions about FirstEnergy’s plan to hike rates
should contact 1-866-283-8081. The call is toll-free.