Do you pull off a Band-Aid in a single quick rip, or do you use a prolonged series of small, gentle tugs?

Do you enter a chilly swimming pool with a bold flying leap, or do you ease in, one numb body part at a time?

Do you want to absorb a 34 percent hike in your electric bill in a single shock, or do you prefer a series of five smaller jolts?

PPL Electric Utilities on Monday proposed giving its residential and small commercial customers the choice of dealing with the looming rate hike in two ways.

They could pay the hike in full when it hits on Jan. 1, 2010, triggered by the expiration of state-mandated caps on prices.

Or they could spread out the hike over five years, paying 6 or 7 percent more annually, beginning next summer and lasting through January 2012.

"We understand that price increases, driven by the dramatic nationwide rise in fossil fuel prices, could be a financial burden for some of our customers," said PPL president David DeCampli in a prepared statement.

While the company can't control the energy market, he continued, PPL can "provide options for customers well ahead of the rate-cap expiration."

Driving this future increase — PPL's biggest ever — is the impending end of capped prices for electricity generation, as the state continues to deregulate the electric industry.

Capped prices currently are well below market prices.

PPL now delivers power that it obtains under a capped, long-term contract that runs out at year-end 2009. It passes that cost through to customers without markup.

So PPL needs new sources to be ready to go on Jan. 1, 2010.

Rather than wait until then to secure all of its power, and pay whatever the market price is at that time, PPL is spreading the risk by buying portions of its future needs over three years.

Based on the first rounds of those purchases, PPL projects that the Jan. 1, 2010, increase will be 34 percent.

The average PPL residential customer now pays about $100 per month, assuming he uses 1,000 kilowatt hours per month.

After the rate hike, the average residential customer will pay about $143 a month.

(Separate from the cap-related increase, PPL has another rate hike pending that stems from a settlement of an old rate dispute. This 5 percent hike is set for Jan. 1.)

How would the phase-in work?

Customers would pay a portion of that 34 percent increase ahead of time by adding to their regular monthly payments. These extra sums would earn interest.

These pre-paid extra sums, plus interest, would be credited to what they owe, starting Jan. 1, 2010 — when rates for the other customers will leap instantly by the entire 34 percent.

Customers in the phase-in program will get additional rate hikes at the start of 2010, 2011 and 2012, gradually bringing their charges up by that 34 percent as well.

PPL noted that it would not profit from this phase-in program, which is subject to state Public Utility Commission approval.

Customers who sign up for the phase-in would be able to opt out if they change their minds.

PPL also is offering a number of conservation and energy-management programs to help customers handle these future hikes.

CONTACT US: tmekeel@LNPnews.com or 481-6030