The House Consumer Affairs Committee this week held two informational meetings on electric deregulation, rate caps, energy conservation and other issues related to public utilities in Pennsylvania.

The Committee is chaired by Rep. Joe Preston (D-Allegheny) and Rep. Bob Godshall (R-Montgomery).

Public Utility Commission Chairman Wendell Holland and other commissioners presented an overview of issues facing the PUC this year, including implementing the Alternative Energy Portfolio Standards, electric deregulation and other issues.

PECO Senior Vice President of Regulatory and External Affairs Lisa Crutchfield presented comments to the Committee on three issues: electric competition, PECO’s safety and reliability performance and PECO’s credit and collection operations and low-income programs.

Crutchfield said Pennsylvania’s electric competition law has worked to encourage companies to improve operating performance, reduce operating costs, construct new generating capacity and reduce wholesale prices. As an example, she said over the last 10 years, PECO’s parent company Exelon has doubled the effective output of its existing nuclear power plants.

Robert Geneczko, Vice President of Customer Service and President of PPL Gas Utilities Corp, PPL Electric Utilities Corp, said PPL has budgeted nearly $1 billion over the next five years to upgrade PPL’s infrastructure, much of which was installed in the 1960s and 1970s.

Allegheny Power President David Flitman said a regional approach to restructuring was needed and a balanced policy for price, reliability and environmental stewardship saying one leg of the stool cannot stand without the other.

J. Michael Love, President of the Energy Association of Pennsylvania, said there is no magic bullet for dealing with the coming end of electric rate caps, but said energy conservation and efficiency efforts can lessen the magnitude of electricity price increases. He also recommended increasing funding for the Low Income Home Energy Assistance Program to help low income Pennsylvanians.

Several other companies were also invited to talk about Pennsylvania’s deregulated electricity market. Presenting comments were: Frank Lacey, Director Government and Regulatory Affairs for Direct Energy, Richard Hudson, Regulatory Affairs Manager for Strategic Energy and Richard Rathvon, Vice President for Reliant Energy.

Sonny Popowsky, Consumer Advocate of Pennsylvania, complimented the Public Utility Commission and electric companies for the programs they have to deal with low income energy issues saying he thought they were the best in the country.

Popowsky said the best way to provide a “soft landing” for consumers when electric rate caps come off in 2010 is to require electric distribution companies to buy a portfolio that includes long and short-term electricity contracts, renewable and non-renewable resources and make investments in demand side (energy conservation) programs.

Former PUC Commissioner John Hanger, now CEO of PennFuture, said electricity rate caps have already fully ended in three electric service territories in Pennsylvania without the kind of electric rate shocks that other states have experienced. (The exception being in Pike County where initially electric rates increased 129 percent.)

“In fact, electricity restructuring in Pennsylvania has led to substantially lower rates for most consumers, with residential customers using 1,000 kilowatt-hours per month paying in constant dollars from 11 percent less to 38 percent less in 2007 than they were in 1991,” Hanger said.

Hanger promoted Gov. Rendell’s proposed Energy Independence Program as a way to diversify how electricity is made and its energy conservation policies.

Next week the House Consumer Protection Committee holds an informational meeting on issues surrounding the natural gas industry. (See Calendar of Events for details)

NewsClip: PPL Says Competition Lowers PA Power Prices

3/16/2007