Expect an increase in electric bills this month

(7/5) Though Allegheny Power's electric rates are locked in until the end of 2008, residents who get their electricity from Allegheny Power will still see their electric bills increase about 15 percent beginning this year.

"Allegheny Power has already raised them on the residential customer base," said Emmitsburg Mayor James Hoover.

Because of the expected dramatic increases in the electric rates that Allegheny Power expects when the price caps end at the end of 2008, the Maryland Public Service Commission approved rate stabilization plan that allows Allegheny Power to begin phasing in the expected power increase. The first phase of the increase will show on July bills.

"The rates may or may not increase depending on which plan the customer chooses," said Allegheny Power spokesman Allan Staggers. "We have enacted a series of rate increases that works out to about 15 percent annually for about four years."

The rate stabilization plan was approved at the end of March. The company then notified customers for two billing cycles that they could opt out of the program and accept the full electric increase at the beginning of 2009. If customers did not opt out, they were automatically enrolled in the program of phased-in increases.

Currently, the cost of electricity from Allegheny Power is $74.15 for 1,000 kilowatt hours. When the rate caps come off, residents under the rate stabilization plan will be paying about $106.16 for 1,000 kilowatt hours while residents who opted out of the program will be paying $123.98 for 1,000 kilowatt hours.

Staggers said that under the program, "In 2007 and 2008, you will pay a little more, but in 2009, you will pay a little less and at the end of 2010, things should level out."

The additional costs will show as a surcharge on the electric bill. The money collected will go into an interest-earning fund. Once the caps come off Allegheny Power's rates, the surcharge will then become a credit to the customers in the program to reduce their rates to lower than the market rate.