Reflects Increasing Costs Over Past 19 Years, Including Necessary Electric Infrastructure Upgrade; Proposed Customer Rates Would be Below 1992 Levels PITTSBURGH, April 7 /PRNewswire-FirstCall/ -- After almost 20 years without a base rate request, Duquesne Light today filed for rate adjustments with the Pennsylvania Public Utility Commission (PUC). The proposed rates, which would be below 1992 levels, would help the company to offset increased costs to provide service, including its ongoing upgrade of the region's electric infrastructure. "We are investing more than $500 million in the region's electric infrastructure to ensure local residents -- and the businesses and communities that are so critical to this region -- are connected to a secure, safe and reliable source of energy," said Morgan O'Brien, Duquesne Light president and chief executive officer. "While our transmission and distribution system has served customers well for decades, various components are nearing the end of their useful operating lives. This upgrade of the wires, poles, transformers, substations, underground circuits and other equipment that deliver power to customers' homes and businesses is a necessary, proactive investment that also is creating several hundred new jobs for our community." Duquesne Light has implemented significant process improvements to control costs over the years but has reached the point where the company no longer is able to offset increasing operating and maintenance expenses through these types of initiatives, and significant capital expenditures are required to deliver reliable service. "We now must increase our rates to recover our current cost of service as well as the cost of new investments made to serve customers," O'Brien said. "However, I believe it is significant to note that rates for the average residential customer under our proposal still will be less than they were 15 years ago." For a residential customer using 600 kilowatt-hours per month, PUC approval of Duquesne Light's request would result in a $12 increase in the overall monthly electric bill. The proposed total new rate of approximately 12.6 cents per kilowatt-hour is about 10 percent less than what that customer was paying 15 years ago. By way of comparison, pricing for other utilities has increased significantly since 1992. Natural gas prices in Pennsylvania are up 115 percent, while, on average nationally, water and sewerage rates have increased 64 percent and the average cost of cable and satellite TV service has increased 78 percent. The proposed new rates will reflect increases in the distribution and transmission portions of customers' monthly bills. The transmission portion must be reviewed and approved by the Federal Energy Regulatory Commission (FERC). Duquesne Light's generation service, for customers who have not chosen another supplier, remains fixed through the end of 2007. As part of its filing, Duquesne Light is proposing substantial increases in funding to help verified low-income residents in the company's Customer Assistance Program (CAP), so that their overall monthly electric bills will remain essentially unchanged. CAP participants pay a percentage of their budgeted bill for current electric service, and arrearages are forgiven over time. In addition, Duquesne Light proposed to the PUC that the company continue its new Stay Warm programs, which helped restore service to low- income customers and provided other working poor customers credits to offset arrearages on their accounts this past winter. The cost of providing electric service has increased substantially over the past 20 years, O'Brien noted. "We continue to see significant cost increases in many areas of our business, including fuel, health insurance, property insurance, transportation and labor," O'Brien said. "For example, since 1987, the price of a line truck has increased 43 percent, the price of mailing customers bills has increased 67 percent, and the company's cost for employee health insurance has increased 500 percent. In addition, Duquesne Light is in the midst of a significant capital investment program, which is taking place throughout our service territory. It is designed to replace older, outdated and inefficient equipment and to ensure that the region will be able to support new business growth and other forms of economic development by meeting the changing and expanding energy demands of the new century." Infrastructure improvements that are part of this capital investment program include: - upgrading underground lines and equipment that have been in service in some suburban neighborhoods as far back as the 1960s; - improving power capacity to serve the expanding electricity needs of hospitals and universities in the Oakland area; - refurbishing and reinforcing the aging underground systems that power sections of downtown and surrounding urban and commercial areas; - upgrading transmission lines that will improve the flow of electricity in the eastern part of Duquesne Light's service territory and help to balance the power load throughout Allegheny and Beaver counties; and - converting older distribution circuits to make use of newer technology to improve reliability. To help complete these projects, Duquesne Light has added 150 full-time employees to its workforce. In addition, approximately 150 project-specific positions will be available to skilled trades people in the region over the next several years. Duquesne Light expects PUC review of its filing to take approximately nine months. The company believes new rates will go into effect in early January 2007. About Duquesne Light Company Duquesne Light Company is a leader in the transmission and distribution of electric energy, offering superior customer service and reliability to more than half a million customers in southwestern Pennsylvania. DATASOURCE: Duquesne Light Company CONTACT: Media, Joe Balaban, +1-412-232-6848, or Financial Community, Darrin Duda, CFA, +1-412-393-1158, both of Duquesne Light Company

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