Atlantic City Electric customers will see their rates rise by an estimated 5.5 percent on Saturday as a result of state approval to pass through increases in related program costs.

The company announced Thursday that the state Board of Public Utilities has authorized it to charge more to cover the cost of power it is required to purchase from non-utility generators. The extra funds will cover social programs such as aid to low-income customers and clean energy, as well as fund credits to customers who help reduce peak electric demand. None of the rate increase will add to Atlantic City Electric profits.

The typical residential customer using 1,000 kilowatts per month will pay $188.62 monthly, an increase of $9.88, the utility said. That will erase most of the break consumers got the last time these charges were adjusted, dropping 7.8 percent in 2008.

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The adjustment to the Non-Utility Generation Charge alone will allow the company to recover $123 million through May 2012.

Spokeswoman Sandra May said Thursday that the state requires Atlantic City Electric to buy power from outside companies at contracted rates.

"When power prices are high, the contracts are competitive," she said. "But when energy prices are lower, as now, customers must make up for the shortfall between what the utility pays for power and what it receives when it sells the power in the PJM market," the regional power grid.

Part of that increase also results from the end of a four-year billing credit to return to customers an excess of money collected for non-utility generation in the past.

Another increase, in the Societal Benefits Charge, includes components affected by the recession such as help for low-income residents and reserves for uncollectible accounts, May said. The utility will recover $32 million for that over 18 months.

The Universal Service Fund provides year-round help with electric bills for low-income residents (call 866-240-1347), while the N.J. Lifeline Credit Program helps low-income seniors and disabled residents (800-792-9745). Both are funded by the Societal Benefits Charge.

The third significant component of the rate increase for the new year is funding for the utility's Peak Savers Program, through which it reduces peak demand for power.

"The program allows Atlantic City Electric to remotely turn off customers' central air conditioning or hot-water heaters during periods of peak demand in summer, resulting in a credit to participating customers' bills," May said.

The Peak Savers Program is scheduled to end early in 2014. The utility has replaced it with the similar Energy Wise Rewards Program, which is described at energywiserewards.atlanticcityelectric.com.

Atlantic City Electric applied for BPU approval for the adjustments in May 2009.

The charges are separate from the utility's delivery rate, which covers the cost of distributing electricity to customers. Atlantic City Electric was granted a delivery-rate increase of about 1 percent in May, its first increase in that rate since 1992.

Contact Kevin Post:

609-272-7250

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