Allegheny Energy customers must "opt out" soon

May 23, 2007|By TAMELA BAKER


Time's running out for Allegheny Energy residential customers to decide whether they want to be included in the company's rate stabilization plan before it kicks in this summer.

The company developed the plan to help ease customers into anticipated higher rates when state-imposed caps on Allegheny's energy charges expire at the end of 2008. It allows rates to increase gradually, beginning next month, rather than forcing customers to swallow what company officials project to be a "significant" increase in January 2009.

Customers will automatically be enrolled in the plan unless they contact Allegheny to opt out.

For some customers, the deadline to opt out is the first week of June, according to Allegheny spokesman Allen Staggers.

Customers must contact Allegheny within 20 days of their last billing date if they don't want to be included in the rate stabilization plan. Staggers said the current billing includes the second notice that customers have received. The first notified them that they had 50 days to respond.


Now, he said, "the first ultimate deadline is June 7," depending on when a customer's billing date is recorded.

The next meter reading for customers in the next billing cycle is June 7, he said, and bills will be prepared that night.

By then, it will be too late to opt out.

"To be on the safe side, so nobody misses the deadline, they should call through June 4," Staggers said. "After that is really pushing it.

"The important thing is if they miss the deadline, there's no choice," he said. "We don't want anybody to miss the deadline if they want to opt out."

Under the stabilization plan, a distribution surcharge will be added next month, which would bring an overall rate increase of about 15 percent.

The surcharge would go up another 15 percent on Jan. 1, 2008.

When the caps expire Dec. 31, 2008, and Allegheny begins charging market rates Jan. 1, 2009, the surcharge becomes a credit. The money collected from next month through 2008, plus interest, will be reflected as credits against the new market rate. The goal is to minimize the expected jump in rates in January 2009.

Customers who choose to opt out of the plan will have to pay the full increase at that time.

"It's impossible to project" what the market rate will be then, but he said Allegheny had estimated when it filed the stabilization plan that the generation portion of residential bills, now billed at 4.065 cents per kilowatt-hour, could go up to 9.25 cents per kilowatt-hour.

To opt out of the plan, you must call Allegheny at 1-800-255-3443. Follow the prompts until the directory takes you to "electric deregulation" if you have a question. If you know you want to opt out, dial *66 when your call is answered.

Customers who opt out will still see an increase in June of about $4.44 per month for typical residential customers using 1,000 kilowatt-hours of electricity. That's because a temporary credit for all customers expires next month.

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