West Penn Power electric service rates will increase again in June to cover the cost of a state-mandated program aimed at conserving energy.
Typical residential customers using 1,000 kilowatt hours a month will begin paying an additional $1.90 a month. Different rate increases will apply to all West Penn customers, including businesses, industries, schools and government.
West Penn and the other subsidiaries of FristEnergy Corp. of Akron, Ohio, received approval from the state Public Utility Commission to recoup the cost of their Energy, Efficiency and Conservation (EE&C) plans last week.
The EE&C program, which is mandated by Act 129 of 2008, provides rebates and discounts for purchasing energy efficient appliances, air conditioners, heat pumps, solar thermal water heaters, TVs and lights, and energy audits designed to help customers reduce power consumption.
“People save energy so that’s a good thing, but the cost of the rebates and all the other programs... we recover that from rate bearers,” said FirstEnergy spokesman Todd Meyers.
Previous EE&C surcharges were approved to allow West Penn to recover the $94 million it spent on rebates, discounts and audits in the program’s first four-year phase, which ended this year.
West Penn received approval to impose a $1.77 monthly surcharge in June 2012, but didn’t spend as much money as it projected and lowered the surcharge to $1.71, Meyers said.
The money not spent and the 6 cents not charged were added to the $71 million program budget for the second three-year phase. The surcharge taking effect June 1 initially was $1.84, but the added 6 cents raised the surcharge to $1.90 a month, he said.
The amount of money people can save using the rebates and discounts is greater than the surcharge added to their bills, he said.
“The programs are designed to allow people to save money. If they (participate), they will save money and it will be more than the surcharge,” Meyers said.
A cost-benefit analysis determined that West Penn’s EE&C program savings exceed the amount of the surcharge, PUC spokeswoman Jennifer Kocher.
“The benefits of the program out weigh the cost so we allowed them to continue with the second phase,” Kocher said.
Any future surcharges must be approved by the PUC, she said.