rakman t1_j49l4qg wrote on January 14, 2023 at 2:54 AM

Reply to comment by infestans in Need a sanity check on my gas bill by ancisfranderson

> They were super brazen about passing the costs of the sale 100% on to us to they didn’t even pretend otherwise it was bullshit

Can you please explain what you mean by this?

infestans t1_j4c5szd wrote on January 14, 2023 at 5:49 PM

In the hearing the AG (or the public utilities commission i can't remember which one) asked how they (PPL) were planning on financing the cost of the acquisition and they said very bluntly they planned on paying for it by recouping that cost from ratepayers.

No new sources of income or anything, just raise margin on customers and use that profit to pay off the purchase.

So even absent the increase in raw gas and electric costs we were going to get a 40% increase (IIRC) in their off-the-top add on charges just for the luxury of a name change basically

rakman t1_j4c6ajc wrote on January 14, 2023 at 5:52 PM

It doesn’t make a whole lot of sense since rates are regulated. Also, “raise margins to pay off acquisition costs” is pretty standard business practice, you don’t buy a business if it’s not accretive to profits. I’m not an expert on public records but I assume this would have been captured in the hearing minutes?

infestans t1_j4c8636 wrote on January 14, 2023 at 6:05 PM

Yep it should all be in the minutes. But then why would we approve it? Our service has not improved, efficiencies have not improved, there was no benefit for the end user except a rate hike so two companies could trade the state like a pokemon card. We could have just said no! Literally no reason to approve it. We get a rate hike (which they also approved!) and nothing else!

infestans t1_j4c8cho wrote on January 14, 2023 at 6:06 PM

It's one thing if we had no say but the public utilities commission could literally have said no! That's part of the deal for running a statewide monopoly!

rakman t1_j4xwpjg wrote on January 19, 2023 at 12:54 AM

How does change of ownership increase regulated rates above what they would have been under the previous ownership? Is there a "new owner profit premium" in the calculation? If not, then what's your theory?

infestans t1_j4y4r9x wrote on January 19, 2023 at 1:52 AM

they requested an increase in their ROE, and got it. Its up over 10% now, maybe 11% IIRC. The cost of the actual utilities, gas and electricity, are pass-throughs, PPL does no generation. The only prices they control are via their ROE which they have to request from the PUC every 3-8 years. They're locked in for the next 3 years, but it would have been not unreasonable whatsoever to tell the company to swallow some profit margin to offset current high pass-through prices but the PUC is entirely made up of former NatGrid beancounters so why would they ever do that? They're paying off their own purchase via that 11% profit margin and you bet your ass in 2025 they'll be back asking for 12 or 13.

man why weren't you at the hearing?