Duquesne Light seeks to raise rates by 7.7%

Apr. 16—Duquesne Light Co. wants to raise the electric bills for residential customers by 7.7%, an increase that would cost users another $7.73 a month on average, or about $92 a year, the Pittsburgh-based company said.

The request was filed Friday with the Pennsylvania Public Utility Commission. If approved, which is not guaranteed, Duquesne Light would get an estimated $85.8 million in new revenue each year once the increase is in effect. The rate increase would be in addition to a $29.2 million surcharge the PUC already had approved, the company said.

Duquesne Light wants the rate hike to take effect on Jan. 15, said David Fisfis, vice president of business development and general counsel for Duquesne Light.

About 600,000 residential and commercial customers in Allegheny and Beaver counties are served by the utility.

The PUC will conduct an extensive, months-long review of the request, said Nils Hagen-Frederiksen, a PUC spokesman. The utility has the burden of demonstrating the need for the increase, and the PUC seeks to strike a balance between what is in the public interest and a utility's need to provide reliable service, he said.

The utility said it has not had a rate hike since December 2018, when the average residential customer saw an increase of $4.50 a month in their bill. At that time, the company said it filed for a rate hike that would generate $133 million in annual revenue, but the PUC granted only a $40.5 million increase, plus another $50 million in previously-approved surcharges, Fisfis said.

Duquesne Light said it would use some of the extra revenue to upgrade its infrastructure — poles, wires, transformers, substations, trucks — and install new distribution infrastructure. From last year to 2022, Duquesne Light will spend about $900 million — $300 million annually — for infrastructure improvements, Fisfis said.

Tanya McCloskey, Pennsylvania's acting consumer advocate, said her office will challenge the rate request by filing a complaint with the PUC and hire a team of experts to review the filing.

In conjunction with raising rates, Duquesne Light is proposing expanded relief for customers financially impacted by the covid pandemic.

Money earmarked for covid relief options include up to $300 in forgiveness of electric bills to qualified residential customers. The utility plans to create a forgiveness program for eligible existing small "Main Street" business customers and discounts to help eligible new customers open small businesses.

It also is proposing a community development option with a discount over five years during non-summer months for large commercial and industrial customers. It plans to provide an extra incentive for businesses to locate or expand operations in the region.

Funding for those programs is dependent on the PUC approving the entire rate hike request, Fisfis said.

With pandemic-related restrictions over the past year, Duquesne Light has seen more revenue from residential customers but less from commercial customers, as fewer people are working at an office and there were business shutdowns last year, Fisfis said. The result has been an overall decrease in revenue.

Speaking of the proposed rate hike, Duquesne Light interim President Mark Kaplan said it is the utility's responsibility "to balance the need to attract investors so we can appropriately invest in our infrastructure while supporting our customers and community through economic recovery." Without the rate hike, Duquesne Light said, its "financial condition would continue to decline."

Duquesne Light said in the filing the current rate structure does not allow the utility to "adequate operate its business." It generated $960.3 million in revenue in 2020, including $585.8 million from selling its electricity to customers, according to a filing with the PUC.

The consumer advocate's office will request Duquesne Light financial records to determine the validity of the company's claims.

"We will look at their revenue and their spending levels," McCloskey said, as well as "the profits they share with the investors."

Joe Napsha is a Tribune-Review staff writer. You can contact Joe at 724-836-5252, jnapsha@triblive.com or via Twitter .