The House Environmental Resources and Energy Committee will hold a hearing on August 5 to help seek solutions for consumers after the electric rate caps come off in 2009-10.

The Committee Majority Chair is Rep. Camille George (D-Clearfield) and the Minority Chair is Rep. Scott Hutchinson (R-Venango).

"The Committee is coming to the Lehigh Valley because PPL's 1.4 million customers are in the bull's eye for massive increases in electric rates beginning in less than 17 months," said Rep. George, "Electric generation charges already are projected to jump by 37 percent for PPL's residential ratepayers, and commercial customers could face substantially higher increases."

The hearing will be held from 1 to 3 p.m. at the Lehigh County Building, 17 S. Seventh St., Allentown.

Tentatively scheduled to testify are: David DeCampli, president, PPL Electric Utilities; David F. Ciarlone, manager, Global Energy Services, Alcoa Inc.; James Engledow, plant manager, Alcoa Lancaster Works; Stephen G. Poje, senior vice president/development, Sithe Global; and Ed Ryan, member, AARP Pennsylvania executive council.

"I encourage anyone with the opportunity to attend the hearing," Rep. George said. "While some of the utility terminology is daunting, the issue will have enormous effect on Pennsylvanians' pocketbooks."

Rep. George said PPL customers should be aware that the PPL rate cap on electric-generation charges, which make up more than half of a customer's total bill, expires on December 31, 2009. One year later, caps expire for Allegheny Energy, PECO, Met-Ed and Penelec, and their customers face projected increases of 63, 20, 50 and 54 percent, respectively.

"Together, the five electric-distribution companies represent more than 80 percent of the state's electric customers," Rep. George said. "Few are going to go unscathed if deregulation is not rewired to protect rather than punish consumers."

"This summer, the state Public Utility Commission filed a federal complaint alleging that the power grid operator's flawed pricing model has produced unjust and unreasonable prices," Rep. George said. "State regulators, consumer advocates and even utilities without generation capacity have described the wholesale power market as broken, consumer unfriendly and fatally flawed."

Rep. George noted that even the internal market monitor for PJM Interconnections, the Valley Forge-based distributor of power across the eastern United States, complained of an excessive $20 million payment to a generator.

"Utilities' generating companies are showing record profits almost across the board under a wholesale market scheme that is not fair, functional or transparent," said Rep. George, noting that Maryland is seeking $1 billion in rebates for its residential customers. "How many red flags must go up before Pennsylvanians stand up and demand better rates and treatment."

Pennsylvania's consumer advocate estimated that residential customers of the five utilities would pay about $1.55 billion more annually once the rate caps expire. Based on the PPL power auction through PJM in March, a PPL residential customer now paying $62.57 a month in generation and stranded costs would pay $105.22 monthly when PPL's rate cap expires.

Rep. George has sponsored Special Session House Bill 54 which would extend electric-generation rate caps for at least two more years.

NewsClip: PECO Rate Hikes Projected at 20 Percent

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Link: Electric Rate Increases: Generators Offer Customer Options

8/1/2008