The manner in which utilities depreciate a utility’s plant investment has a direct impact on the utility’s customers.  In Pennsylvania, some utilities use the Equal Life Group (ELG) procedure, resulting in an accelerated form of depreciation recovery.  The ELG method stands in contrast to the Average Life Group (ALG) procedure, which requires utilities to apply the depreciation expense consistently each year.  For example, under the ALG method, a utility depreciating $1 million of utility plant over ten years would recover $100,000 from ratepayers annually.  When utilities use the ELG procedure, companies recoup their depreciation faster, but current customers will pay more, quicker.  Already, a supermajority of states requires utilities to use the ALG procedure, making our Commonwealth an outlier.  By requiring that utilities use the ALG method, Pennsylvania consumers will save millions of dollars.
 
I plan to introduce legislation to require utilities to use the ALG procedure.  This will provide for more consistent rates by utility companies and ultimately save ratepayers money.
 
Please join me in supporting this important legislation.  It is time that the General Assembly step in and implement this common-sense measure to protect ratepayers.