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Residential electricity prices averaged $88.60 a megawatt hour in an auction to supply customers of PPL Corp. (PPL) for part of 2011, the company said Thursday.

PPL's utility business in Pennsylvania is buying power to supply its customers once rate caps expire at the end of year. The auction held this week was the first for 2011 supply, with PPL already having bought most of the power needed for 2010. PPL reported an average price of $86.74/MWh in its latest 2010 auction held in April.

As Pennsylvania moves toward market-based rates, PPL as well as utilities owned by Exelon Corp. (EXC) and Allegheny Energy Inc. (AYE) are holding auctions to buy supply for customers who don't shop for an energy supplier.

In this week's auction, PPL bought a portion of the power needed to supply customers for the first five months of 2011. The company reported an average price of $90.31/MWh for power to supply small and mid-size business customers. Both the residential and commercial supply contracts were for full requirement service, which includes a variety of factors besides energy, such as variations in customer demand. PPL also bought block power and renewable energy credits.

PPL said 14 suppliers bid in the auction, but didn't disclose the winners. The company will hold its final auction for 2010 supply in October. Additional auctions will be held to buy supply for 2011, 2012 and part of 2013.

The company said in a press release that it is too early to estimate the impact of the auction's results on customer bills.

-By Mark Peters, Dow Jones Newswires; 212-416-2457; mark.peters@dowjones.com