State House Sound Bites

Capitol reporter Mary Wilson covers Pennsylvania politics and issues at the Pennsylvania state capitol.

Electric rate spikes prompt legislation

Written by Mary Wilson, Capitol Bureau Chief | Mar 7, 2014 3:30 PM
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The Capitol is seeing a familiar spike in legislative proposals, as state lawmakers seek to address a real spike in electric rates over the past two months. Eye-popping utility bills have prompted more than 2,600 complaints to regulators since the beginning of the year.

The Pennsylvania Public Utility Commission says most of the concerns are coming from people who have variable-rate plans. Those are based on the wholesale price of electricity, in high demand this winter.

Sen. Bob Mensch (R-Montgomery) said consumers need better protections and more information - especially when it comes to variable-rate plans.

"I don't think anybody - and when I say anybody, I'm going to say the entire electric industry, the Legislature, and the PUC - none of us did a very good job at helping consumers their options," Mensch said.

Mensch is scrapping the electric service "restructuring" he proposed last year, which would get rid of the default electricity supplier option, forcing consumers to pick a competitive plan, or have their service auctioned off by the state to retail electricity providers. "I intend to start from scratch," Mensch wrote in an op-ed released Thursday. Under his new legislation, which he expects to introduce in the next two weeks, people would be able to stick with their default electricity provider.

Sen. Lisa Boscola (D-Lehigh) plans to introduce a few bills similar to what Mensch said will be in his more sweeping legislation.

"One would be a 24-hour notification requirement to alert residential customers at times when their variable rate increases by 200 percent or more from the previous hourly rate," Boscola said.

The two senators are also on parallel tracks in their push to minimize the length of time it takes to switch to a different electricity provider, something that PUC officials have also said is a priority.

"If you make a decision on a switch today and the price is six cents, you want to be assured that six cents," said Mensch. "What's been happening is it might take a month for that to work through the company and maybe because of the energy usage we've seen this winter, it becomes seven cents by the time it's implemented. Well, that's not what you chose."

Sen. John Gordner (R-Columbia) has responded to the wave of rate spikes with legislation of his own to do away with variable-rate plans altogether. In a co-sponsorship memo, he said people have been "lured" to sign up for such plans and didn't suspect their rate would jump the way it did last month.

But some say such plans can benefit some people - like business-owners and people with second homes who are able to shut off their power if the rate spikes.

"Some people might be able to benefit from variable rates, and that is a choice," Boscola said. "This whole process is about letting people choose what's best for them. I think variable rates do work in certain instances."

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