SEN. WASHINGTON URGES ACTION TO COMBAT ELECTRIC BILL HIKES 

HARRISBURG, July 1 – At today’s Senate Democratic Caucus press conference, state Sen. LeAnna Washington (D-Montgomery/Philadelphia) called on the legislature to take immediate action to phase in electric deregulation and protect consumers from unfair profiteering.

            “The legislature needs to step up and address the problem of increasing utility shut-offs across the state,” Washington said.  “If we do not act soon, electric generating companies will begin reap obscene profits on the backs of consumers.”

            A PPL financial statement from July 2007 predicted that its corporate earnings would nearly double to $3.3 billion by 2010 (PPL is an electric utility company in eastern Pennsylvania).  The report added that the company would produce electricity at a cost of $16 per megawatt-hour and sell it to their customers at up to $91.42 per megawatt-hour.

            Washington said the Senate Democratic Caucus recommends the following reforms:

• gradually phasing in the higher electric rates over a five-year period; or permitting  the utilities to hike rates annually by no more than 5 percent or the rate of inflation - whichever is less. The proposal would not permit deferral or cost recovery for utilities;

• requiring portfolio-type contracts where electric companies can enter into long term contracts and purchase at “least cost.” Currently, companies can charge higher rates by purchasing electricity at “prevailing market rates;”

• requiring the PUC to make sure utility companies are not manipulating the market to charge consumers higher rates;

• requiring utility companies to more actively work and share the cost with consumers on items like smart meters that could help save money by cutting consumption. Since items like smart meters benefit only certain customers, the Democrats said they would make participation in such programs optional rather than mandatory;

• banning winter terminations in nearly all cases, providing more low-income assistance and requiring tougher notification requirements before a utility can shut off a resident’s power. The Public Utility Commission reported that statewide shut-offs have risen 55,366 this year -- 37 percent higher than for the same period last year. Metropolitan Edison Company shut-offs are up 97 percent, while PPL shut-offs are up by 124 percent; and

• potentially creating a “state power purchase agency” to buy energy generation below the PJM market costs, reducing peak pricing, and removing inefficient plants from the market. The agency would be funded through a generation assessment on electric generating companies.