Rep. Robert Godshall (R-Montgomery), Majority Chair of the House Consumer Affairs Committee, said Thursday’s public hearing to address recent electric rate spikes for customers with variable rate electric generation contracts allowed Committee members to air the concerns of consumers and set a course for fixing the problem.

Rep. Godshall called the hearing after he and other lawmakers received a flood of calls and emails from Pennsylvania ratepayers who were hit with exceedingly high electric bills following recent storms and record low temperatures.

The Committee heard testimony from the Public Utility Commission and the Pennsylvania Office of Consumer Advocate; as well as PJM, the federally-regulated transmission grid manager for Pennsylvania and 12 other states, and the Energy Association of Pennsylvania, which represents electric distribution utilities.

PUC chairman Robert Powelson said his agency has received about 9,000 consumer complaints concerning variable rates. He said variable rate electric plans work well for some customers and should not be abandoned, but variable rates are not ideal for consumers with a low risk tolerance.

Powelson said the PUC is attempting to expedite changes to some of its rules to address the kind of complaints the agency has been receiving.

While Rep. Godshall applauded the PUC’s work to expedite changes, he said it is more important to ensure that any changes are done right.

“Haste is not what we need in this situation,” said Rep. Godshall. “While I appreciate what the PUC is doing to assist customers affected by the recent rate spikes, I want to be absolutely sure that any changes we implement are carefully considered and in the best interest of Pennsylvania consumers going forward. Half measures will not work in this situation.

“We cannot rely on the industry to protect consumers. We must put caps on variable rate increases and require the industry to put language in their customer contracts that warn consumers about the nature of variable rates. I am proposing legislation that will put these changes into law.”

House Bill 2104 (Godshall-R-Montgomery would limit electric rate increases for customers with variable rate contracts and enable customers to switch companies without transfer penalties or fees-- sponsor summary.

Rep. Godshall’s bill will also require electric suppliers to provide customers with a copy of their contract, and to ensure that it contains certain language that clearly explains the contract terms.

Tanya McCloskey, acting consumer advocate in the state Office of Consumer Advocate, praised the committee for addressing the issue and said she supports Godshall’s approach to solving the matter.

McCloskey said she has fielded numerous calls from variable rate electric customers who claim to have been misled by questionable marketing practices that advertised low rates. She said for some people, the resulting high electric bills were a life-changing situation. She said greater transparency and public awareness about variable rates is needed.

Rep. Godshall said the Committee will hold another public hearing on variable electric rates in Pittsburgh on April 10.   The hearing will be held in the Gold Room, Allegheny County Courthouse, 436 Grant St., in Pittsburgh starting at 10:00.

NewsClips:

Lawmaker Promises Caps Coming On Variable Electric Rates

PUC Releases Video On Electricity Pricing

PUC Wants Speedier Process For Switching Electric Suppliers

PUC, Facing Customer Backlash, Seeks More Supplier Disclosure

Utility Regulators Move Swiftly On Rate Volatility Complaints

Op-Ed: Electric Choice Works, But Reforms Needed

Op-Ed: Electric Choice Program Is Not Working

Editorial: Ban Variable Power Rates

Related Stories:

Sen. Boscola Introduces Variable Rate Electric Pricing Legislation

PUC Seeks Comments On Accelerating Switching Times For Electricity Suppliers

Comments On New Electric Supplier Disclosure Statements Requested By PUC

New Video From PUC Responds To Consumer Outrage Over Electricity Price Spikes

3/24/2014