House Democratic Leaders Introduce Bill To Cap Expected Electric Rate Increases

House Speaker Keith McCall (D-Carbon) and Majority Leader Todd Eachus (D-Luzerne) this week announced the introduction of legislation that would protect customers of some of the state's biggest electricity generating companies from massive rate hikes when rate caps expire.

 

The legislation, House Bill 20, would cap rate hikes at no more than 15 percent per year for a three-year period, allow customers to choose to pre-pay – and earn 6 percent interest on those payments – to reduce the impact of increased rates, and prohibit power companies from putting the burden of recovering long-term rate recovery costs on the consumer.

 

"When rate caps expired in Maryland, consumers there saw their monthly bills go up 82 percent, and in Maine those monthly bills went up 100 percent – while Pennsylvania energy companies don't plan such enormous increases, we want to stand up for the consumer before their bills skyrocket," Rep. McCall said. "This measure will provide peace of mind to electric customers and give them the power to choose how best to manage these rate hikes for their families."

 

"In this difficult economy, working families have enough to worry about without having to make the choice about whether to feed their families or pay their electric bill,” Rep. Eachus said. “House Bill 20 will protect consumers from the potential sticker shock that will come when rate caps expire.”

 

Rate caps will expire for four of the state's largest power companies by the end of 2010. Rate caps for PPL will expire on December 31, 2009, and caps will expire for PECO, First Energy and Allegheny Energy on December 31, 2010.

 

According to the Pennsylvania Office of Consumer Advocate electricity rates have gone down due to increased competition, such as in the Duquesne Light coverage area in western Pennsylvania where nearly 120,000 customers who formerly had no choice of electricity providers are now getting power from other companies and sources.

 

The lawmakers said that the House Consumer Affairs Committee will hold a public hearing on the proposal on March 26 to gather testimony from consumers, state agencies and power companies.

"We've already got more than 50 co-sponsors for the legislation, and we're confident we can move quickly so the plan can be in place before the caps expire," Rep. McCall said.

 

"Considering how many rural areas will be impacted by the expiring caps, this is absolutely a bipartisan effort, and we're proud to work with some of the legislature's leading voices on energy policy, like the Chairman of our Environmental Resources and Energy Committee, Rep. Camille "Bud" George of Clearfield County. His input is absolutely vital when it comes to electricity legislation."

 

Representatives McCall and Eachus said this proposal is part of a comprehensive House Democratic Caucus energy strategy that has already created 2,500 jobs and $24 billion in investments in the last five years, including:

 

-- Investing in the research and development of green energy, including solar, wind and geothermal;

 

-- Providing funding and tax breaks for homeowners and small businesses to install alternative energy generation systems;

 

-- Promoting high-tech, high-wage jobs building alternative energy systems of all sizes;

 

-- Supporting new construction of energy-efficient "green buildings" and renovations to older buildings;

 

-- Reducing electricity demand during peak hours – the most expensive operating periods that put severe strain on the electricity grid;

 

-- Requiring energy companies to provide "smart meters" that give consumers the ability to choose to purchase energy at cheaper, non-peak production times; and

 

-- Reducing our dependence on foreign oil by setting reasonable standards for in-state production of biodiesel and cellulosic ethanol.

 

"This isn't the first piece of the plan, and it certainly isn't the last," Rep. McCall said. "Pennsylvania has always been the leader when it comes to energy innovation, and House Bill 20 is just another step on the road to energy independence and consumer choice for the Commonwealth."