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House Consumer Affairs Committee Briefed On Electric, Gas Competition
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Competition in the electric and natural gas industries were the topics of discussion this week during public hearings held by the House Consumer Affairs Committee.
"It's always good to take a periodic look at any law that was enacted with the premise of helping consumers to save money. The committee heard some interesting comments during these two days of hearings and I'm sure we will be examining if any changes to the laws are necessary," said Rep. Joseph Preston (D-Allegheny), Minority Chair of the Committee.
Electric choice in Pennsylvania began 15 years ago in 1996, when Act 138 was signed into law. At the time, statewide average electric rates were among the highest in the country, and customers were forced to purchase all services from one supplier, Rep. Preston said.
The 1996 act restructured the electric system by maintaining regulated distribution services but giving customers the ability to select power suppliers. The law was amended in 2008 by Act 129, which expanded oversight and responsibilities of the Public Utility Commission, as well as imposed new requirements on electric distribution companies. Because of this change to the law, every electric customer in Pennsylvania is receiving service through competitive generation sources, whether it is through an alternative generation supplier or through their default service provider.
As of July, more than 1.2 million (20 percent) Pennsylvania customers have switched to an alternative energy supplier. Additionally, according to the PUC, there are 271 approved electric generation suppliers offering competitive rates to Pennsylvania electric consumers.
Rep. Preston said issues discussed at Tuesday's hearing included:
-- The current status of the "electric choice" market in Pennsylvania;
-- Reliability of service to customers;
-- Default service providers and the rates they offer to customers;
-- Public awareness and public education of electric retail competition;
-- The ramifications of maintaining the "status quo";
-- The future of default service, and whether that should change;
-- The impact of "electric choice" on large, industrial customers.
Pennsylvania has had a natural gas choice program in place since the Natural Gas Choice and Competition Act became law in 1999. Still, only 7 percent of residential customers in the Commonwealth are being served by an alternate supplier, according to the latest statistics from the Office of Consumer Advocate.
The price of natural gas from a customer's Natural Gas Distribution Company is approved by the Public Utility Commission. The price may change on a quarterly basis depending on what is happening in the wholesale market, according to Rep. Preston.
He said issues discussed at Wednesday's hearing included:
-- Factors affecting the wholesale price of natural gas;
-- Residential "shopping" statistics;
-- Gas Choice Programs in other states;
-- PUC and legislative remedies to expand competition;
-- Barriers to entry for natural gas marketers;
-- Marcellus Shale and the price of wholesale natural gas.
Copies of testimony from both hearings is available on Rep. Preston's Consumer Affairs Committee website.
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8/8/2011 |
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