While fuel prices soar, electricity customers will not see a significant increase in rates this winter as a result of state-regulated price caps.

Regulation by the Pennsylvania Public Utility Commission (PUC) keeps prices low, PUC spokeswoman Jennifer Kocher said.

"In Pennsylvania, the electric costs are capped," Kocher said. "Electric companies cannot increase their profits."

Office of Physical Plant spokesman Paul Ruskin said the average electric bill paid by the university is $1 million per month.

The West Campus Steam Plant generates 6 percent of the power provided to University Park, and an additional 5 percent comes from windmills. The remaining 89 percent is provided by Allegheny Power.

Ruskin said that while the university pays a low bulk price as the largest purchaser of electricity in the county, prices will eventually increase.

"We're expecting major increases down the road," he said.

In the coming years, as deregulation is completed in 2010, Ruskin said he expects rates to increase statewide as price caps are lifted and power companies begin competing.

Allegheny Power is the primary electricity provider in the State College area, spokesman Fred Solomon said. He said price increases this winter will amount to about $4 on the average household's bill.

Currently, the average Allegheny Power customer pays 6.79 cents per kilowatt-hour for electricity, he said. In January, it will increase to 7.129 cents, about a 5 percent increase.

Solomon said area residents would be paying less than the average Pennsylvanian for electricity because their prices have been capped at a low price.

"The reality is, caps keeps prices low for customers," he said. Allegheny Power's cap allows it to charge a lower price compared with other companies in the state.

George Lewis, spokesman for PPL Electric Utilities, said that until 2010, consumers will benefit from capped prices.

"People aren't going to see the effect of fuel prices ... through 2009," he said.

Lewis added that Pennsylvanians are at an advantage over consumers of electricity in other states because of the regulations. "Increases that may affect other states aren't going to be felt by Pennsylvanians," he said. "In other states, utilities have asked for public utility prices for increases."

A process of deregulating the state's electricity providers has been taking place since the late 1990s, Kocher said.

Currently, the price consumers pay for electricity from Allentown-based PPL is 9 cents per kilowatt-hour, which Lewis said should not increase more than a couple of percentage points. "Adjustments will be minor -- nowhere near other fuel prices," Lewis said.

Kocher said many electric companies use energy generated by natural gas, which has seen a significant hike in prices, she said. This could result in an increase in operating costs, which can be passed onto the consumer. However, to date, there have been no applications for rate increases, Kocher said.

Allegheny Power primarily uses coal energy, Solomon said.

Lewis said power plants that run off of natural gas are not going to be used in favor of those that generate using cheaper electricity.

Kocher said the deregulation is intended to promote better service and prices. The PUC will continue to operate, monitoring for fair competition.

In 2010, fluctuations in fuel prices, now primarily felt by power plants, will be passed onto the customer, Lewis said. "It's very speculative," he said.