WESTERN PENNSYLVANIA — Local electric costs could nearly double for certain Pennsylvania Power Co. customers under a rate case expected to be approved Thursday by the Pennsylvania Public Utility Commission, said those familiar with the case.

Under the hike, the electric generation portion of residential bills could surge by more than 60 percent, local analysts said. Electric generation is about 50 percent of the total bill for a typical Penn Power residential customer, with transmission, distribution, taxes, a basic service charge and other charges accounting for the remainder.

Penn Power’s transmission costs are expected to remain unchanged, so the overall residential bill may rise an average of 30 percent.

Scott Surgeoner, a spokesman for Penn Power’s owner, FirstEnergy Corp., declined to comment on the specifics of the utility’s rate case, formally known as a request for proposal.

“We do expect the PUC to act on our request for proposal at their meeting on Thursday,’’ Surgeoner said.

He noted the company’s rates have been frozen since 1998 and the utility’s last base rate increase occurred in 1992.

Penn Power’s price hikes, to become effective Jan. 1 and run through May 2008, are part of a statewide effort to deregulate the state’s 11 electric service territories. Deregulation means Penn Power customers will have to choose a new electric generation supplier because the local utility will no longer generate electricity.

However, most analysts doubt that residential customers will have a choice on electric suppliers in the near term as serving households is expensive and requires a major commitment by suppliers.

What makes this process a little tricky is that under deregulation, Penn Power will serve as a provider of last resort. That means if no other supplier emerges, customers will have to rely on Penn Power for electricity, which it will buy from power generators. Analysts say it’s unlikely suppliers will want to service residential customers.

“Penn Power becomes the customer of last resort,’’ Surgeoner said. “We go to the open market and bid that load. Prices will be essentially what the market dictates. For Penn Power, it’s a direct pass-through cost. Penn Power makes no profit for the generation of that electricity.’’

Businesses may have a choice. Those accounts are more profitable for electricity suppliers and its more likely competition will surface for these customers.

Some businesses may actually see a sharp drop in their bill if they stay with Penn Power as the PUC is expected to approve a flat-rate system for small, medium and large commercial customers. In the past, rates for these customers could fluctuate greatly. For most businesses, though, electric brokers said they better brace for a price hike.

Penn Power is expected to get PUC approval to charge a flat 8.73 cents a kilowatt-hour for these commercial customers, according to a utility document obtained by The Herald and those following the case. In the past, the rate for those same customers ranged between 4.5 and 17 cents a kilowatt-hour. A kilowatt-hour is the equivalent of using 10 100-watt lightbulbs for one hour.

“This is what I feared,’’ said Lee McCracken, president of Premier Power Solutions LLC, an electric broker based in Pine Township. “For a guy who owns a grocery store this is going to be a 100 percent increase, but for someone who owns a sawmill, which uses electricity very inefficiently, they could see their rate almost cut in half.’’

It’s the large, electric-guzzling industrial companies that will see the lowest rates, McCracken predicted. Since these companies consume enormous amounts of electricity, they’re in a better position to negotiate with suppliers.

“All the large customers will leave Penn Power,’’ McCracken said. “There won’t be a single industrial customer left with Penn Power.’’

By going out on the open electric market for businesses, McCracken said he expects most of his commercial clients’ generating costs to rise in the 25 percent and under range.

As for the residential electric consumer, it’s not a pretty picture.

“The homeowner is going to have to pay,’’ McCracken said. “There’s a 90 percent probability or higher they won’t be able to find someone other than Penn Power. If the homeowner wants to pay less, he’ll have to use less.’’