House Committee Holds Hearing On Bill To Phase In Expected Electric Rate Increases

The House Consumer Affairs Committee this week held a hearing on House Bill 20 (McCall-D-Carbon) which 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.

 

House Speaker McCall could not attend the hearing, but did enter comments for the record. The Committee has held many hearings on this topic so much that was said was not really new.

 

James Cawley, Chair of the Public Utility Commission, said thee was a lot to like in House Bill 20 saying the Commission has been working on the issues to reduce the impact of rate increase on consumers. He offer two comments, although he noted Commissioner Christy did not agree with every point made in his comments: that the trigger for the requirements in the legislation by 25 percent, not 15 percent and that the bill should provide for interest on borrowings of utilities with a 15 percent trigger.

 

Sonny Popowsky, PA Consumer Advocate, testified in support of the legislation saying it is needed because projections of rate increases, even with lower electric production costs, still range from 8 percent in the PECO service territory, to 36 percent in PPL service area and 63 percent in the Allegheny Energy areas.

 

Bill Lloyd, PA Business Advocate, pointed out phase in plans already approved by the Public Utility Commission do not meet the requirements of House Bill 20 and would have to be altered if the legislation were adopted without changes.

 

Gladys Montgomery and Emilie Sconing, volunteers with AARP Pennsylvania, and Ray Myers, of the PA Alliance for Retired Americans, outlined the concerns of seniors facing rate increases.

Several utility representatives from area where electric rate caps have expired recommended exempting those companies from the bill: David Trego, UGI Utilities, Fred Eichenmiller, Duquesne Light and Eric Winslow, Citizens' Electric Company.

 

Richard Hudson, Retail Energy Supply Association, disagreed with some presented who said there is no electric competition in Pennsylvania, he said there was and his group supported a properly structured rate mitigation plan.

 

Terry Fitzpatrick, Electric Power Generation Association, praised Rep. McCall for introducing the legislation and offered three comments: the strict limit of 15 percent is too prescriptive, the lack of specific authority for utilities to collect carrying costs on deferred amounts will increase risk in the wholesale markets and denying recovery of these costs sends the wrong message to investors who have to pay for added generating capacity.

 

The Committee also heard from individual power companies: Aldie Warnock, Allegheny Energy, Leila Vespoli, FirstEnergy, Paul Bonney, PECO and David DeCampli, PPL.

 

Paul Williams, PA Steel and Cement Manufacturers Coalition, described to the Committee how changes in electric rates will affect heavier industry.