The House Environmental Resources and Energy Committee will hold a hearing on Special Session House Bill 54 (George-D-Clearfield) that would extend the existing rate caps on electricity prices from 2010 to 2013.

"No one wants to use a stick to protect citizens and businesses from dangerous electric-rate increases," said Rep. George. "However, sometimes a stick is needed to move people off self-centered obstinacy."

"The priority remains enactment of a comprehensive energy policy that would put Pennsylvania on the road to energy independence," Rep. George said. "However, the threat of rate increases of 60, 70 percent or more affecting more than 4 million electric customers makes development of stopgap legislation imperative."

Those tentatively scheduled to testify include: Tyrone Christy, Commissioner, Public Utility Commission; State Sen. Lisa Boscola (D-Lehigh); Sonny Popowsky, consumer advocate of Pennsylvania; Carl Wood, regulatory affairs director, Utility Workers Union of America; and Morgan O'Brien, president, Duquesne Light Company.

"Responsible energy proposals have been on the table for many months," Rep. George said. "Progress has been stonewalled, and pleas for cooperation for the common good have so far proved futile."

"Pennsylvania's economic vitality is at stake, and the question is whether the time for pushing and prodding shareholders is over and it's time to start shoving. I reluctantly suggest that time has come."

PPL's 1.4 million customers in 29 counties already face rate increases projected at 35 percent when its rate cap expires after December 31, 2009. More than 2.7 million customers of PECO and FirstEnergy's Penelec and Met-Ed subsidiaries face double-digit rate increases when their rate caps expire after December 31, 2010.

Rep. George said other states' responses to expiring rate caps suggest that further inflexibility may not be in the best interests of utilities.

Illinois responded last year to sharply higher electric rates with $1 billion in rate relief and creation of a state agency to buy electricity and build generators. Virginia and at least five other states abandoned or indefinitely delayed deregulation after realizing the broken promises of deregulation.

"The lobbyists and their pleadings of poverty or bankruptcy will not win the day when faced with the wrath of citizens staring at massive increases in their monthly electric bills and news reports of record profits by utilities," Rep. George said.

Under Special Session House Bill 54, utilities could seek annual rate-cap relief when they show significant changes in their costs. During the rate-cap extension, energy would be secured to ensure reliable service at the lowest, reasonable rates through a portfolio of long-term, short-term and spot market purchases and meeting alternative-energy requirements.

"Average electricity prices jumped by 36 percent in deregulated states where rate caps expired -- much higher than rates in states still regulating generation costs, " Rep. George said. "Extending the rate caps is not the preferred manner of muting the damage but it may be the necessary one. "

Rep. George said he plans to hold more hearings on the legislation.

Rep. Bud George (D-Clearfield) serves as Majority Chairman of the Committee and Rep. Scott Hutchinson (R-Venango) serves as Minority Chair.

2/8/2008