Lawmakers failing consumers
HARRISBURG, Pa. (AP) – With the household electric bills of many Pennsylvanians expected to skyrocket by 2011, legislators last year were talking about forcing electric utilities to eat part of the cost. That talk is over.
Beginning Jan. 1, the 1.4 million electric customers of PPL Corp. can expect an average 30 percent increase in their bills if they don’t do anything.
One year later, another 3 million-plus customers of Allegheny Power, Metropolitan Edison, Peco Energy and Pennsylvania Electric are likely to see rates jump higher, too.
Legislators did nothing but talk about requiring utilities to share the higher cost that is about to result from the expiration of deregulation-era rate caps.
Those caps have, since the 1990s, protected most Pennsylvanians from paying the true cost of the electricity they use.
The Legislature’s inaction means ratepayers will have to be proactive if they want to slice anything off their bills.
For starters, that means shopping for a better price.
Pennsylvania’s 1996 deregulation law – which was supposed to usher in a competitive electricity market and bring down bills – allows electricity marketers to vie for customers.
And it will be up to individual ratepayers to switch to suppliers that can resell electricity for less than the utility can when their rate cap expires and prices increase.
A switch could look seamless since electricity marketers can have agreements with utilities – which continue billing for the cost to maintain the wires that deliver electricity – to keep sending the bill.
Information on how to switch is on the Web sites of the Public Utility Commission and the Office of Consumer Advocate.
In addition, the Legislature passed a bill last year that requires the state’s 11 utilities to reduce electricity use – meaning ratepayers will see their utilities offering rebates on energy-saving appliances or light bulbs, home energy inspections and more.
For low-income households, there is more money than ever for weatherization projects – thanks in part to the federal stimulus bill – and utilities have various programs to help people afford their electricity bill or reduce their usage.
Another source of help was unexpected, if unwanted – the recession.
“Maybe the only silver lining from the terrible economic situation that we’re in is that energy prices have gone down,” said the state’s utility consumer advocate, Irwin Popowsky.
The Pennsylvania Public Utility Commission has data that shows how far energy prices have fallen.
Had the rate caps expired on June 27, 2008, the average increase in residential bills would have been 73 percent, according to the commission.
Fifteen months later, on Sept. 30, it would have been 17 percent.
A year ago, Gov. Ed Rendell and lawmakers were warning that allowing rate caps to expire untouched would force businesses and factories to close and families to make tough decisions over how to pay all their bills.
The main discussion in the Legislature revolved around a plan to limit any annual electric rate increase over a period of a few years, preventing the utilities from immediately recouping the full cost of the electricity they resell.
Top legislators were divided over whether utilities should have been forced to swallow that loss.
However, getting utilities to help foot the bill is not without precedent: Utilities in Illinois and Maryland gave back a combined $3 billion to consumers after rate caps there expired and caused an outcry.
Pennsylvania’s debate fell by the wayside.
On Thursday, Gov. Ed Rendell said he continues to press the Legislature for action.
Although it is too late to help PPL customers, Rendell warned that electricity rates may not be weighted down by the economy for very long.
“We still need to do it. We still cannot rely on the fact that rates are low now and therefore there’s no immediacy to this serious problem,” Rendell commented.
“I believe that there’s a good possibility that prices could ramp up again,” continued Rendell
Marc Levy covers state government for The Associated Press in Harrisburg. He can be reached at mlevy@ap.org.