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House Appropriations Holds Hearing On Public Utility Commission Budget

The House Appropriations Committee held hearings this week on the budgets for the Attorney General, the Auditor General, the Public Utility Commission and the State Treasurer based on what these offices wanted to see in the budgets for their agencies. The Governor will release his budget request next Tuesday.
            Commission Chair James Cawley presented an outline of a 2010-11 budget request which calls for a 6 percent increase based solely on union contract-mandated salary increases.  The Commission is not funded by general tax revenue, but by assessments on utilities they regulate or oversee.
            In response to questions about the Philadelphia Gas Works, Chairman Cawley called for the passage of  House Bill 744 (Solobay-D-Washington) providing for a natural gas system distribution charge to fund infrastructure improvements to help ease financing costs for PGW and other natural gas distribution companies.
            On Alternative Energy Portfolio Standards, Chairman Cawley said he favored increasing the solar and wind energy provisions in part, because of the direct economic benefits to the state as manufacturers of these types of energy facilities locate in Pennsylvania.  He also said distributed energy generation is a trend that will continue into the future and will help reduce the need for more power lines, among other facilities.
            Commissioner Tyrone Christy said he was concerned many of the actual solar and wind projects are not being located in the state because the alternative energy law allows projects to count toward the requirement anywhere in the PJM distribution area running from New Jersey to Illinois.
            Commissioner Robert Powelson expressed a concern about making sure the cost of alternative energy sources is out in the open so the impact on rate payers is known, especially as electric rate caps come off in more service territories.
            A number of questions about electric rate caps prompted Chairman Cawley to say "retreat is not an option" in response to suggestions rate caps be reinstated.   He said he does not want to return to a situation where the risk of developing new power plants is placed on electric ratepayers like it was before electric deregulation in 1996.
            "The fact is electric ratepayers have saved billions of dollars on electricity since 1996 and now with the caps coming off everyone will be on the same page," said Chairman Cawley.  He also said he was baffled about why many residential customers, like those in the Penn Power service territory, do not shop for alternative suppliers that can result in a 10 to 15 percent immediate savings.
            Many budget hearings are being carried live online by the Pennsylvania Cable Network.  Click here to go to PCN video streaming webpage.


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