LOWER POTTSGROVE PA – To soften what could be the harsh blow of electricity costs expected to skyrocket within two years, Metropolitan Edison – which serves utility customers in a northeast portion of the township – said Wednesday it had received state permission to accept advance payments on some customers’ future bills.
Money collected in advance will earn an annual interest rate of 7.5 percent, a far better return than what many banks now pay on most savings accounts.
Escrowing advance payments are one way to relieve the sticker shock utilities believe will be created when state-imposed caps on electric rates expire Jan. 1, 2011. Electricity costs then could rise as much as 20 percent. State legislators have discussed a variety of ways to deal with cap expirations, but so far haven’t agreed upon a solution.
Pennsylvania’s Public Utility Commission recently approved the Voluntary Pre-payment Plan suggested by Met-Ed and its corporate parent, FirstEnergy Corp. Under it, qualified residential and small business customers can gradually phase in future price increases by making modest pre-payments during 2009 and 2010.
The amounts in each year would be equal to about 9.6 percent of their current electric bills. The accumulated sums, and the interest they earn, would then be applied as credits to lower monthly electric bills throughout 2011 and 2012.
Customers can enroll in the plan by calling toll-free 866-283-8081 or by going online. Eligible customers can enroll any time before December 31, 2010.