Costs Threaten to Derail Relationship Between Amtrak and PPL

The relationship between Amtrak and PPL Electric Utilities is quickly going off the rails: On December 22, the federally subsidized nonprofit passenger railroad filed a formal complaint against the utility with the Pennsylvania Public Utility Commission (Docket No. C-2016-2580526), claiming that an annual base rate increase of about $2.3 million in distribution revenues to recover costs associated with $24 million in upgrades to the Conestoga Substation would be unjust and unfair.

The commission then voted to launch an investigation into the rate hike, setting in motion a formal hearing process.

Amtrak, which serves passengers along the Northeast Corridor, buys electricity from PPL to power its operations between Philadelphia and Harrisburg – and it is the only carrier that uses the Conestoga Substation.

According to a December 28 report by The Morning Call, the current dispute dates back to 2015, when PPL informed Amtrak that its electric bill would go up by a factor of seven in 2016 – from $37,000 to $252,647 a month.

That fixed fee for “electric propulsion service” does not include the cost of electricity, which Amtrak buys separately from a supplier, according to the local news outlet.

“The crux of it is that, under our tariff, customers pay for improvements to those parts of our system that serve them directly, and Amtrak is the sole user of this facility, PPL spokesperson Paul Wirth told the Morning Call.

However, Amtrak’s complaint opposes the new rate hike and has asked the state Public Utility Commission to refund the increased distribution charges that Amtrak paid PPL in 2016 under the settlement.

Indeed, in this filing, Amtrak notes that PPL has not explained why its estimated upgrade costs have ballooned from $15 million to $24 million over the p03ast year. Amtrak, which already owns three transformers at the Conestoga substation, says it offered to reduce costs by supplying two more transformers to replace PPL equipment.

PPL attributes the need to charge a higher rate than originally requested to cost increases engendered by the delay in the upgrades.

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