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PUC Challenges Duquesne Light Rate Increase

The Pennsylvania Public Utility Commission (PA PUC) voted to investigate the request made by Duquesne Light Co. to increase its electricity distribution rates by 17.6 percent — worth about $76.3 million annually to the Pennsylvania utility.

If the request is approved, the average residential customer who does not have electric heat will pay about $8 more a month, according to the company; the average residential bill is $86 a month. The average commercial customer’s bill would increase to about $900 a month, up $47. The average large-industrial customer would pay $16,680 a month, up $500.

A complaint filed August 15, 2013 by the Office of the Consumer Advocate triggered the investigation, which must conclude by May 2, 2014.

“Companies always ask for as much as they think they can justify, but they generally don’t obtain the full amount,” said Tanya J. McCloskey, acting consumer advocate.

Duquesne Light spokesman Joey Vallarian said the utility expected the complaint, adding that investigations are “standard operating procedure” for rate increase requests.

The utility’s plan includes an 11.25 percent profit margin for its stakeholders, McCloskey said.

“Our financial experts just don’t feel that’s justified in the current economic times,” she said.

The company filed the base-rate increase request with the commission on August 2, 2013 citing plans to upgrade its grid, customer information system, vegetation management and Internet security, as well as the necessary back office technology for the state-mandated installation of smart meters, Vallarian said. Duquesne Light hasn’t updated its system since the 1990s and wants to offer customers better account access online, he said.

“These are changes that are evolving in the utility industry to make the process much more customer-friendly,” McCloskey said. “We understand that, but we want to be sure the approved amount is just and reasonable to both consumers and the company.”

The commission has nine months after the original filing to make a decision, holding hearings with testimony from Duquesne Light and consumer advocates through the winter. If the commission perceives enough interest, it could schedule public hearings in the Pittsburgh area.