PECO Requests Gas Delivery Service Rate Increase to Fund Critical Infrastructure...

PECO Requests Gas Delivery Service Rate Increase to Fund Critical Infrastructure Improvement and Expansion Projects

Major Energy Efficiency and Low Income Programs also Part of
Filing to PUC
PHILADELPHIA--(Business Wire)--
PECO today filed a petition before the Pennsylvania Public Utility
Commission (PUC) for a $98.3 million increase to its delivery service
revenue to fund critical infrastructure improvement projects that will
ensure the safety and reliability of the natural gas delivery system.
The increase will also fund additional programs for low-income
customers as well as energy efficiency enhancements. If approved, the
average monthly residential bill of $118 would increase by about
$12.79, or 10.8 percent.

"We know there is never a good time for a rate increase, but we
are taking many additional steps to help customers adjust," said Mark
Alden, vice president of Gas for PECO. "A delivery rate increase is
necessary, however, to meet our obligation to provide safe, reliable
service at a reasonable cost and meet the future demands of an
increasing customer base."

In the filing, PECO has proposed significant enhancements to its
low income programs, specifically its Customer Assistance Program
(CAP) and Low Income Usage Reduction Program (LIURP). Under the plan,
CAP would be expanded from two income-adjusted rates to four
income-adjusted rates and funding would be increased from $4.3 million
annually to $14.1 million annually, allowing PECO to help even more
low-income customers. Funding for LIURP, which provides free
weatherization measures to low-income customers, would be increased
from almost $900,000 to $1.75 million.

PECO is planning $280 million worth of investments to the system
during the next five years. Among the critical reliability projects
are increasing flow to portions of the service territory experiencing
growth, repairing and replacing aging equipment and distribution
pipes, and increasing system efficiencies with new technologies.

The rate filing is also needed because of the rising costs of
materials and expenses. For example, steel pipe has risen 30 percent
over the last five years. Copper and brass fittings are up 35 percent.
Health care and other employee-related expenses have also risen
sharply since the last delivery service rate increase in 1988.

PECO's natural gas bill is made up of two parts. The delivery
charge - the subject of this filing - is the cost of moving the
natural gas to customers and is up about a quarter of the average
residential bill. This charge provides the funds PECO needs to
maintain the gas distribution system, buy equipment and materials and
to pay salaries. The gas commodity charge, about three-quarters of an
average bill, reflects the cost PECO pays to buy gas on the wholesale
market. PECO does not make any money on this portion of the bill. PECO
does not propose any increase to the commodity charge in this filing.

While the commodity charge has fluctuated with the price of
wholesale natural gas, PECO's delivery rate has stayed the same for 20
years and is now the lowest in the state. No other natural gas
delivery company in Pennsylvania has gone as long without an increase
to its delivery rate.

In the filing, PECO also has proposed significant new, high energy
efficiency programs to help customers manage their energy usage,
including new appliance rebate programs that would provide customers
with a $300 rebate to replace old furnaces or boilers with new
efficiency-certified models and a $50 rebate to replace old water
heaters.

The PUC will conduct a review of PECO's rate request. Any approved
rate adjustment would likely be effective no later than Jan. 1, 2009.
Customers with questions about the filing may call PECO at
1-800-494-4000.

Based in Philadelphia, PECO (NYSE:EXC) serves 1.6 million electric
and 480,000 natural gas customers in southeastern Pennsylvania and
employs about 2,500 people in the region. PECO delivered 78.5 billion
cubic feet of natural gas and 39.9 billion kilowatt-hours-hours of
electricity in 2007. Founded in 1881, PECO is one of the Greater
Philadelphia Region's most active corporate citizens, providing
leadership, volunteer and financial support to numerous arts and
culture, education, environmental, economic development and community
programs and organizations.

PECO
Cameron Kline, 215-841-5555

Copyright Business Wire 2008