The Pennsylvania Public Utility Commission on Thursday approved a $3.3 million rate  increase for Veolia Energy Philadelphia Inc. that will increase rates for Center City steam customers by 5.2 percent over the next two years.

The turbine hall of Veolia Energy’s power plant in Grays Ferry
Charles Fox / Staff Photographer
The turbine hall of Veolia Energy’s power plant in Grays Ferry

The increase, the result of a settlement between Veolia and consumer advocates, is pretty much what the energy company requested in June, though, as a compromise, the increase will be phased in via two separate 2.6 percent annual boosts. The first increase takes effect Jan. 1.

Veolia, whose steam loop serves 250 customers in Center City and University City, said it needed the rate increase just to break even in its steam operations and to maintain reliable operations. The company also makes money selling electricity from its cogeneration plant on Christian Street in Grays Ferry, though power-generation revenue is not factored into its rate request for steam customers.

In November, Angela T. Jones, a PUC administrative law judge, recommended that the commission accept the negotiated settlement. The PUC voted unanimously to approve the agreement, which also provides that steam rates will not increase again until at least April 1, 2020.