PPL Electric Utilities has requested the Federal Energy Regulatory Commission for a change in the way the company's transmission rates are calculated to support continued investment in its transmission system.

The company has asked for permission to switch to formula-based rates, a switch that Federal Energy Regulatory Commission (FERC) has encouraged to foster modernization of the US’s transmission grid.

Under formula rates, a fixed earnings level is set for the utility, and the utility annually adjusts its transmission rates, subject to FERC review. The process offers an opportunity for public input. The new rate design would ensure that there is no over-recovery or under-recovery of the actual costs of providing transmission delivery service, the company said.

Transmission rates cover the company’s costs to build, operate and maintain transmission facilities. Transmission lines move bulk electricity across the regional power system to local communities.

While the costs for some transmission lines are paid for entirely by PPL Electric Utilities customers, the costs of regional transmission line projects are shared among all customers in a 13-state region that includes Pennsylvania.

The rate change request, if approved, would result in an increase of $0.74 to the monthly bill of an average PPL Electric Utilities residential customer.

David DeCampli, president of PPL Electric Utilities, said: This is a very small change to a customer’s bill that will enable PPL Electric Utilities to continue to deliver safe, reliable transmission service. All of our customers benefit from a strong transmission system, and that’s what this request is about.