LEWISBURG — The Pennsylvania Public Utility Commission has approved a request by Citizens’ Electric Co. to increase its generation supply service rate for the fourth quarter of 2009.

The new generation rate of 9.5399 cents per kilowatt-hour (kWh) reflects an increase of 2.1169 cents per kWh when compared with the third-quarter 2009 generation charge of 7.423 cents per kWh. The new rate will be reflected on all bills rendered Oct. 1 through Dec. 31.

As a result of the rate adjustment, the total monthly bill of a residential customer using 500 kWh of electricity will increase by $10.53 or 20.4 percent, from $51.53 to $62.06. The total bill includes generation and distribution charges, as well as state taxes.

The increase is primarily due to lower-than-expected electric sales in the second quarter of 2009 coupled with a change in PJM Interconnection capacity charge calculations that resulted in an under collection of power costs in the third quarter. PJM Interconnection is the regional transmission organization that coordinates the movement of wholesale electricity in Pennsylvania and surrounding states.

Pennsylvania law requires electric utilities to separate electric service on customer bills into two components: generation and distribution. Distribution rates pay for costs associated with owning and maintaining the local wires and other equipment used to deliver electricity to customers.

The generation supply service rate, also known as the energy charge, covers the utility’s costs associated with purchasing power for its customers. The generation rate is adjusted quarterly and is a straight pass-through charge; as such, Citizens’ Electric is not permitted to make a profit on it.

Designated as a “provider of last resort” under the Pennsylvania’s Customer Choice Law, Citizens’ Electric is required to purchase generation supply on the wholesale market for customers who do not choose a competitive supplier. There are currently no competitive generation suppliers serving the Citizens’ Electric customer base.

Citizens’ Electric Co., with headquarters in Lewisburg, serves approximately 6,800 residential, commercial and industrial customers in Lewisburg Borough, and East Buffalo, Buffalo and Kelly townships in Union County, as well as West Chillisquaque Township in Northumberland County. It is a wholly owned subsidiary of C&T Enterprises.

C&T Enterprises is jointly owned by Claverack Rural Electric Cooperative, based in Wysox, and Tri-County Rural Electric Cooperative, headquartered in Mansfield. The parent cooperatives provide electricity to approximately 36,000 consumers in north-central and northeastern Pennsylvania.